Originally posted by KazetNagorraMargaret Thatcher rescued us from from the economic mire in which the OldLabour regime (1964-1979) left the UK, with inflation running at 27% and in debt to the IMF for a loan which averted bankruptcy.
And yet Norway, with much more generous benefits, has almost zero unemployment. Perhaps you need to look somewhere else for an explanation for the problem of unemployment, gangs and chavs. Perhaps at someone named Thatcher.
For some reason, I thought you did tax and estate law. Yeah, there are some places at the low end of the income distribution where a household with specific characteristics and that uses programs optimally faces a very high (even over 100😵 net marginal income tax rate due to the ineligibility for transfers like food stamps.
There's a paper by Larry Kotlikoff and Jagadesh Gokhale have a paper from 2002 called "Does it pay to work?" that explores this.
Originally posted by sh76A higher minimum wage would solve this problem, surely?
The exact words from a client of mine.
He's making $12/hr. His employer would raise him to $20, but the increase in salary would be more than offset by a loss in programs eligibility.
He didn't tell this to me, but reading between the lines, his employer probably slips him a few bucks under the table.
This idea of basing government programs solely on income tests need a re-thinking.
Originally posted by retiariusAs long as the minimum wage is high enough to ensure that it's more advantageous to be in than out of work, most people will find jobs if they can. Of course, Thatcher pursued the opposite course, deliberately accepting a fairly high level of unemployment since that would depress wages!
A drastic reform of the 'benefit' scam is the only solution.
Originally posted by TeinosukeConversely, a higher minimum wage also makes it harder for businesses to hire low-paid workers. That's why you need a negative income tax in the lowest bracket, combined with an adequately high minimum wage. A simple and effective way to guarantee full employment while also providing an acceptable standard of living for the "poor".
As long as the minimum wage is high enough to ensure that it's more advantageous to be in than out of work, most people will find jobs if they can. Of course, Thatcher pursued the opposite course, deliberately accepting a fairly high level of unemployment since that would depress wages!
Originally posted by KazetNagorraIs there a negative income tax in the lowest bracket in the Netherlands?
Conversely, a higher minimum wage also makes it harder for businesses to hire low-paid workers. That's why you need a negative income tax in the lowest bracket, combined with an adequately high minimum wage. A simple and effective way to guarantee full employment while also providing an acceptable standard of living for the "poor".
Originally posted by KazetNagorraA negative income tax bracket exists in the United States.
Conversely, a higher minimum wage also makes it harder for businesses to hire low-paid workers. That's why you need a negative income tax in the lowest bracket, combined with an adequately high minimum wage. A simple and effective way to guarantee full employment while also providing an acceptable standard of living for the "poor".
Look up the earned income credit.
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Originally posted by telerionI do, but I also do trusts (which go hand in hand) and it's common for low income people to want to set up trusts to hold property for their children (or whatever) in a manner that doesn't affect their benefits eligibility.
For some reason, I thought you did tax and estate law.
Originally posted by sh76If it's going to work as an incentive, then I suppose it depends how generous benefits are...
Just how high? Surely not more than $12/hour?
It's nine euros in France and only slightly less in the Netherlands, Belgium and Germany. That's around 12 dollars, isn't it?