Federal Government too large/powerful

Technically here welfare is taxable, however most don't reach the threshold.

An example would be if an aged pensioner received $15,000 in a year's pension but also received $30,000 in capital gains (not counted by welfare here but counted by the tax people). Total income $45,000, take off senior citizen's tax threshold of $23,000 leaves $23,000 thus $3450 tax at 15%.

Daryl wrote:Technically here welfare is taxable, however most don't reach the threshold.

An example would be if an aged pensioner received $15,000 in a year's pension but also received $30,000 in capital gains (not counted by welfare here but counted by the tax people). Total income $45,000, take off senior citizen's tax threshold of $23,000 leaves $23,000 thus $3450 tax at 15%.

Wow! That's a serious loophole! Someone could be worth a fortune and still collect welfare.

The biggest part of the welfare income isn't the theoretically taxable cash payments but the non-cash assistance. When you add up housing assistance, heating assistance, free health care etc etc it adds up to a lot. When all that is added together welfare pays better than a minimum wage job in 34 states. (FYI for non-US, welfare is a state program, the Feds give the states money for it and have strings attached to the money but the states administer it and other than the strings, they make the rules. As a result it can vary considerably state by state, which is why only 34 states pay better instead of all 50.) In the most generous states welfare pays better than a $20/hr job!

Now there is a significant variance among recipients, but the ones we're concerned about here are the real hard cases - those who have been on welfare for an extended period of time and excel at gaming the system. Let's be honest, those guys aren't likely to be the best employees at first. They don't have work experience and worse they don't have the soft skills associated with successful employment. You know, all the skills we learned from our parents: being on time, working hard, proper attitude etc. They can learn all of these things over time but they won't have them at the point when we are trying to get them off welfare. So it's going to be difficult to find them a job and have them keep it long enough to learn those skills. Right now what employer would want to bother with them?? The employment situation is still lousy, employers have their pick of employees with great skills that are willing to take even low paying jobs because that's all that is available. Why would they want to deal with ex-welfare hard cases? A huge part of the reason the Clinton era reforms worked was that the economy was booming. Employers didn't have droves of great employees willing to work for peanuts, so they had the motivation to hire ex-welfare hard cases and to take the time and energy to train them to be great employees.

The idea that making welfare worse instead of minimum wage better helps the economy has always been utterly incomprehensible to me.

The E wrote:The idea that making welfare worse instead of minimum wage better helps the economy has always been utterly incomprehensible to me.

The number one problem that I have with raising the minimum wage is that it just results in more and more jobs being outsourced to India/China. Sure the service jobs McDonalds etc stay here but clothing manufacture, call centers etc just keep moving offshore. We used to have decent jobs (not great jobs but decent ones) at the low end of the economy, those are all in Asia now. If you want to raise the minimum wage, FIRST we need to fix outsourcing by addressing the 100s of laws/regulations that make it so easy.

Incidentally fixing the low end of the economy will help large numbers of people voluntarily leave welfare programs. But welfare recipients aren't a monolithic group. There is a subgroup of hard cases. No amount of fixing the economy will persuade them to leave welfare. Many/most of them are multi-generational welfare recipients and while our parents were teaching us important soft skills/values for the workforce, their parents were teaching them how to game the system in the most maximally effective manner. Getting that subgroup off welfare will require coercion.

So your problem, like ours, is that fuck knuckle companies would rather chase a dollar than help the country that they are based in. That fuck knuckle managers would rather chase BS bonuses than look after other people in their own country. The needs of the one outweigh the needs of the few or the many. The Liberty principle that is fucking tje world over.

biochem wrote:Incidentally fixing the low end of the economy will help large numbers of people voluntarily leave welfare programs. But welfare recipients aren't a monolithic group. There is a subgroup of hard cases. No amount of fixing the economy will persuade them to leave welfare. Many/most of them are multi-generational welfare recipients and while our parents were teaching us important soft skills/values for the workforce, their parents were teaching them how to game the system in the most maximally effective manner. Getting that subgroup off welfare will require coercion.

The thing is, any proposal designed to make this group leave welfare seems to make welfare worse for everyone, which is not exactly something I am sympathetic to.

Of course, there are also any number of red flags being raised in my brain whenever someone who is not on welfare speculates about the reasons why someone is unable to get off welfare. It's very easy to say that these people are just lazy, or look down on them for doing things you think are wrong, and even more easy to be patronizing by saying things that begin with "I am not paying their welfare so they can <do a thing I find to be frivolous/a luxury/unnecessary>".

Another set of red flags go up whenever someone goes on the "something must be done about these welfare moochers" path. Just going off of my experience with the german welfare system, the number of people who are actually and openly abusing the system is enormously inflated by the way the tabloid media are reporting on them. I am not doubting that these people exist. I am doubting that the combined damage they do comes close to the damage done to the public good by the biggest recipients of public welfare (i. e. banks and other companies being bailed out for the stupid shit they do, military-industrial complex fuckups like that 45-billion-USD hole in the US DOD).
But, of course, those are Good American Businesses Which Must Not Fail, not some dude in a suburb somewhere who gets a couple hundred dollars in welfare that he shouldn't be getting, according to the court of public opinion.

The E wrote:

biochem wrote:Incidentally fixing the low end of the economy will help large numbers of people voluntarily leave welfare programs. But welfare recipients aren't a monolithic group. There is a subgroup of hard cases. No amount of fixing the economy will persuade them to leave welfare. Many/most of them are multi-generational welfare recipients and while our parents were teaching us important soft skills/values for the workforce, their parents were teaching them how to game the system in the most maximally effective manner. Getting that subgroup off welfare will require coercion.

The thing is, any proposal designed to make this group leave welfare seems to make welfare worse for everyone, which is not exactly something I am sympathetic to.

Of course, there are also any number of red flags being raised in my brain whenever someone who is not on welfare speculates about the reasons why someone is unable to get off welfare. It's very easy to say that these people are just lazy, or look down on them for doing things you think are wrong, and even more easy to be patronizing by saying things that begin with "I am not paying their welfare so they can <do a thing I find to be frivolous/a luxury/unnecessary>".

Another set of red flags go up whenever someone goes on the "something must be done about these welfare moochers" path. Just going off of my experience with the german welfare system, the number of people who are actually and openly abusing the system is enormously inflated by the way the tabloid media are reporting on them. I am not doubting that these people exist. I am doubting that the combined damage they do comes close to the damage done to the public good by the biggest recipients of public welfare (i. e. banks and other companies being bailed out for the stupid shit they do, military-industrial complex fuckups like that 45-billion-USD hole in the US DOD).
But, of course, those are Good American Businesses Which Must Not Fail, not some dude in a suburb somewhere who gets a couple hundred dollars in welfare that he shouldn't be getting, according to the court of public opinion.

One of the problematic issues around welfare is that both the liberals and the conservatives use stereotypical narratives. Both conservative AND liberal stereotypes are true because in actuality welfare recipients are not a monolithic group and there are subgroups which fit the liberal stereotypes and other subgroups which fit the conservative ones! One of the biggest failures BOTH liberal and conservative politicians have in addressing the situation is that typically BOTH assume a population of clones that fits their particular preconceptions and thus propose the usual one size fits all government solutions.

Reducing the numbers on welfare won't be easy and will take multiple solutions. Fixing the low end of the economy will help. Waiting until the economy is booming and then forcing others off will help (doing that now won't work, that solution only works when the economy is doing very well). The situation of the semi-disabled (people with genuine health issues that reduce their employability but who are not disabled enough to be eligible for disability) still needs to be addressed. I haven't seen any solutions to this particular subgroup's employment challenges. Probably the best solution would be some small scale experiments of a variety of different ideas and see what works. Etc Etc.

Welfare fraud, gaming the system etc is detrimental in more ways than just the $$$. It's similar to the income inequality problem. It triggers that same feeling of the government is unfair. They are taking money that people worked hard for and are giving it to someone else. Think of how the ant in Aesop's ant/grasshopper fable would feel if forced to give up what they have worked hard for to the feckless grasshopper and you capture the feeling of injustice. When people feel (whether that feeling is accurate or not) that the recipients resemble the grasshoppers, they resent it AND they resent the government.

Corporate welfare is a whole different problem. And is is a BIG problem. But it's not an either or situation. BOTH types of welfare are problematic. On the $$$ side and on the destruction of trust in government side.

In the case of corporate welfare, there are big issues with politically favored companies getting bailouts or sweetheart deals (banks, Solyndra etc), which also triggers huge resentment. But the biggest impact is regulatory. Connected companies lean on regulators/lawmakers to slip in small changes to the regulations/laws that for the most part aren't noticed by the general public but which give that company a competitive advantage over the less well connected. The more complex and encompassing the regulations, the easier it is for companies to get away with it.

To keep a government from growing too large, you need to set financial limits of some sort.
To keep people from seeing welfare as a lifestyle choice, you need to remove some of the rewards.
So... the answer is simple.

Cancel all current taxes. Set a new tax that is (x) amount per year or (y)% of income (not above 25%). Make the tax voluntary (and payable by spouses, parents or employers) with two important caveats.
1) If you claim anything from the government (non-frontline service* paychecks, welfare etc), you are not allowed to pay tax for that year.
2) If you want to vote, you must have paid tax (or had it paid for you) for four sequential years at the time of voting.

This way, any attempt to bribe the electorate via expanding welfare will backfire as it will remove large numbers of potential votes.
Civil servants will not be able to vote for their political bosses, thus political parties will try to encourage those of opposing political leanings in in order to reduce the votes their opponents get.
Politicians will want to encourage private enterprise as people who work can pay tax and can thus vote.
Anyone who doesn't want to pay tax doesn't have to, but it means that they are voluntarily giving up their vote.
Anyone who wants to vote will first have to take responsibility for their own income rather than relying on the efforts of those in work and paying tax.

For companies, set a simple flat-rate profit tax. If the profit is below a million pounds, no tax paid. For anything above a million profit per annum, say- 5% tax if the company is headquartered in the country in question, 7.5% if headquartered abroad.
This will encourage companies to move their HQ's to take advantage of the lower tax rates, thus increasing employment, people being able to pay taxes and thus people being able to vote.

While the above is admittedly simplistic and cannot be used as is, it should hopefully spark ideas about how things could work better.

*This means that people in the NHS, police, army, fire service etc will still be able to vote.

Michael, the one thing I agree with you is that your approach is simplistic. Why should there be a difference between "front line" civil (public) servants and those whose work supports them?

As an example my daughter works for a government technical training arm (TAFE). She is not an instructor training motor mechanics, but an accountant ensuring that all get paid and have their resources available. She works ten hour days (officially eight hours) and is eternally stressed trying to make both ends of the string fit. I wasn't a military pilot but worked long hours to get weapon system availability from abysmal to excellent. Should we both have been disenfranchised?


I'm a self funded retiree who has paid tax for about 50 years and am still paying it, but I don't regard my opinion as being more valuable than someone who has had a disability and never had the ability to earn enough money to have to pay tax.

Many societies that have had comprehensive welfare nets for generations have relatively low unemployment rates. The Haven dolist scenario is not inevitable. As I have mentioned before the multigenerational welfare families may be highly visible and irritating, but they generally don't impact significantly on a society's financial viability.

When large multinational companies arrange their affairs so that they pay under one percent tax on their incomes, while still using the infrastructure (roads, ports, telecommunications, etc) that the society's middle income earners tax has paid for I get a little upset. That's why I don't have an iPhone or use Amazon, among others.

As to voluntary tax, good luck.