Minimum Income

Summary:
Ensure that every citizen or permanent resident of a country maintains a minimum level of income, in place of the current welfare system.  The overall competing welfare systems and bureaucracy will be completely eliminated and instead replaced with a tax-based system where everyone is guaranteed a level of income.

Long Description:
In many countries the welfare system is a bureaucratic department where one must prove themselves destitute in some way via paperwork and background checks to then qualify for certain types of income assistance.  In Canada, this would mean income assistance cheques and subsidised housing.  In the United States this could mean food stamps or healthcare insurance subsidies.

However, the process for acquiring welfare assistance is usually tedious, involving a high amount of paper work and bureaucracy.  This, by itself, is also costly to the government when each dollar spent in welfare-type assistance has a reduced effect because of the bureaucratic cost. 

Minimum income seeks to avoid the bureaucracy by integrating income assistance with income tax processing.  This may require changes in a country, for instance in the United States if you do not file a tax return the government actually does not process anything at all whereas with this welfare system the government must always process the tax for every person in the country automatically.  When income tax is processed, you then receive a flat amount of money from the government.

For example, if your income for the year is $23 000, as is typical for someone working in the service industry, you then may also receive $5000 from the government, for a total income of $28 000.  Then you pay taxes on $28 000.  This would mean that those with high incomes would receive less benefit since the marginal tax rate on the additional income is higher.  We may wish to introduce a surtax on the $5000 for people at the highest tax brackets but that may not be strictly necessary.  We could also add income deduction of $5000, on top of whatever we is already in place, in order to cancel out the income tax on the income at the lowest tax bracket.

[Edit] For any income tax calculation that attempts to "claw back" the minimum income assistance there are two key considerations.  First, for every extra dollar earned that is not through government assistance, the amount of assistance that is reduced should be less than a dollar, therefore making no negative incentive for working more hours.  Second, the marginal tax rate at any income level should not be perverted to become regressive (for instance, if you immediately clawed back one dollar for every two dollars earned, then the tax rate at the lowest bracket would be 50% + state/provincial tax rate + federal tax rate, meaning that you'd be taxed at a rate that is so high even the highest tax bracket doesn't even compare)

Rationale:
The real cost of bureaucracy dampens the desired effect of welfare in a country.  If only 70% of the money spent on welfare goes to the actual workforce that seriously hampers efforts in combating poverty.  Additionally, from recent studies in Europe, it would appear that minimum income arrangements do not have a major effect on productivity, in fact the only groups to have reportedly worked less in experimental minimum income policy areas were pregnant mothers and teenagers.

We want the youth to focus on obtaining skills for future jobs, whether that be apprenticeship or university, having them work in low-wage jobs is not helpful for increasing human capital.  For parents, allowing a temporary decrease in productivity during a pregnancy would likely have a net positive result due to improved parenting.

Lastly, by giving individuals cash rather than restricted assistance (such as strict food stamps), it allows them the freedom to climb their way out of poverty in a way that suits their individual situations.  It's generally less helpful to give restricted income.  However, some structured assistance, such as housing, is still necessary because giving a minimum income to individuals may not help with that issue (if for instance the problem is that housing is simply too expensive).

Tools:
Generally, the tools used to implement this policy revolves around a robust income tax system.  A computer system is necessary to calculate the income return for all permanent residents and citizens.  This is necessary to determine who is eligible to receive minimum income assistance.

Statistics agencies usually already keep data on worker productivity, split by age or occupation, which would be helpful in ensuring that there are no significant negative side effects.  Data on absolute poverty levels would also be helpful.

In trying to determine whether poverty is being effectively fought, there should be statistics to look at the level of poverty of the next generation (child poverty rate), employment rate among those who have a higher proportion of their income composed of income assistance, income movement amongst the poor (whether the poor are able to find better job opportunities over time).


What I'd like to talk about later:
Corporate Tax Revisions and Business/R&D Grants
Healthcare - Preventative Care
Nursing Home Funding
Carbon and Toxins Tax
Incubator Program
Criminal Justice Lawyers