indifferente indifferente - privo di interesse o di cura o sentire l'americano medio. È indifferente che la sua situazione è il risultato di un complesso di azioni personali ed economiche e governative. al di là della normale cittadini comprensione e controllo allegramente indifferente dei suoi amici situazione distratto - segnato dalla mancanza di attenzione o considerazione o premeditazione o completezza non attento incurante dei suoi vestiti dimenticati da qualche persona negligente un distratto governante correzione di bozze disattento è stato un errore di distrazione ferito da un osservazione incurante sereno - non afflitta da problemi o disturbo o disagio sembrava turbata dai dubbi di alcun sonno tranquillo genere un volto sereno sorta interessato - sentimento o mostrando preoccupazione o sollecitudine i genitori interessati di delinquenti giovanili era preoccupato per il futuro ci sentiamo preoccupati realizzazione del compito a portata di mano molto preoccupato di non deludere un bambino piccolo indifferenti - facile in mente non preoccupato il prigioniero sembra del tutto indifferente per quanto riguarda il risultato dell'esame sereno - non afflitta da problemi o disturbo o disagio sembrava turbata dai dubbi di qualsiasi tipo sonno tranquillo un genere volto sereno indifferente - non occupato o impegnato con i lettori indifferenti con stile non coinvolto - non coinvolti essendo coinvolto rimase obiettivo indifferente (unworried) x2192 unbekmmert (indifferente) x2192 gleichgltig di essere indifferente a qualcosa x2192 sich nicht um etw kmmern come poteva essere così indifferente di lei safetythe problema x2192 wie konnte ihm ihre Sicherheit das problema in modo Egal o gleichgltig sein io non ero indifferente per la vostra sicurezza x2192 ich habe mir Sorgen um deine Sicherheit gemacht di essere indifferente da qualcosa, di essere indifferente a qualcosa x2192 von Sein etw unberhrt indifferente x2ccx28cnkx259nx2c8sx25cx2d0nd ADJ (unworried) x2192 tranquilloa di essere disattento x2192 non darsi pensiero di, non preoccuparsi di o per mancanza di interesse o di ansia. Ha ricevuto la notizia del suo fallimento con disinteresse apparente. kalmte desconcertante nezjem morire Gleichgltigkeit ligegladhed. indiferencia kskiksus, Marc-Antoine Muret vlinpitmttmyys indiffrence, bezbrinost kzny ketidakpedulian afskiptaleysi, hugaleysi indifferenza abejingumas vienaldzba TDK mengambil berat onbezorgdheid likesle. ubekymrethet beztroska desinteresse indiferen nezujem brezbrinost ravnodunost likgiltighet, ointresse ilgisizlik. kaygszlk s v Tnh onverskillig indiferente lhostejn gleichgltig ligeglad indiferente kskikne vlinpitmtn indiffrent, gondtalan bezbrian, kznys Tidak Peduli hugalaus indifferente abejingas vienaldzgs terabai onbezorgd uengasjert. ubekymret beztroski desinteressado indiferent ahostajn brezbrien ravnoduan likgiltig, ointresserad, ilgisiz obekymrad, kaytsz v Tnh indifferenza (-nid-) avverbio onverskillig, Kalm indiferentemente lhostejn gleichgltig ligeglad con indiferencia kskikselt vlinpitmttmsti dun aria indiffrent bezbrino kzmbsen Secara Tidak Peduli af hugaleysi con indifferenza abejingai vienaldzgi terabai likeslt onbezorgd. ubekymret beztrosko desinteressadamente (cu un aer) indiferent ahostajne brezbrino ravnoduno likgiltigt, ointresserat, ilgisizce obekymrat, kaytszca v Tnh link a questa pagina: Si è seduto sul retro di un carro espressa ed erano sul sedile come indifferente come qualsiasi cosa. Durante tutti questi movimenti, e in mezzo alla confusione generale, Magua aveva mantenuto non solo il suo posto, ma il molto atteggiamento che aveva inizialmente preso, contro il lato della loggia, dove ha continuato come immobile, e, a quanto pare, come indifferente . come se non avesse alcun interesse nel risultato. Ogni pochi momenti, quando l'uomo ha parlato, o spostati, o sorridevano, avrebbe iniziato e fissare gli occhi su di lui, e poi improvvisamente ritirarle, come i brillanti, occhi scuri incontrarono i suoi con tanta freddezza indifferente. Emma non rispose, e ha cercato di guardare allegramente indifferente. ma è stato davvero sentirsi a disagio e volendo lui molto di essere andato. Lui, il padre, un ben significato, ma non un uomo rapido lungimirante, potrebbe davvero, credo, dare alcuna informazione per gli era stato generalmente limitato alla casa, mentre le ragazze sono stati che occupano la città e fare ciò conoscente che ha scelto e ha cercato di convincermi, come accuratamente come lui stesso era convinto, delle sue figlie di essere del tutto indifferente nel business. ha detto che la matrona, mettendo via il suo libro con le dimissioni indifferente di una persona esperta che prevede una tempesta in un bicchier d'acqua. Quando ho tentato di prendere uno di questi uccelli, che avrebbero coraggiosamente girare contro di me, cercando di beccare le mie dita, che io non osavano avventurarsi alla loro portata e poi si sarebbero saltare indietro indifferente. a caccia di vermi o le lumache, come hanno fatto prima. Ho assunto atteggiamenti più indifferenti e attesi con impazienza loro di parlare prima. Le esclamazioni, gli insulti rivolti a Benedetto, che rimase perfettamente indifferente. i gesti energici, il movimento delle gendarmi, gli sberleffi della feccia della folla sempre sicuri di salire in superficie in caso di qualsiasi disturbo - tutto questo è durato cinque minuti, prima che i portieri e magistrati sono stati in grado di ripristinare il silenzio . Bennet, guardando come indifferente, come può essere, e la cura non più per noi che se fossimo a York, a condizione che può avere la sua propria strada. Ho paura ora, la madre, si sta pensando di Betts Shoreham, ha detto Julia, arrossendo, anche se lei ha lottato con forza per apparire indifferente. Si tratta di uno spettacolo in movimento questo, di tanti uomini della terra, terroso, che non ha mai curato nulla per una nave, calpestando indifferente. brutale e chiodati sulla sua impotente body. Improving sicurezza sociale in Canada reddito garantito annuo: un governo di carta supplementare del Canada 1994 NOTA: Questo documento è stato recuperato dal SICUREZZA Canada RIFORME SOCIALI (SSR) sito web sviluppo delle risorse umane e copiato qui per informazioni scopi. Il sito SSR non è più attivo. Social Security Reform Discussion Paper uscito nel Quebec City il 18 settembre 1994, il primo ministro ha delineato quattro componenti chiave dei posti di lavoro governi e agenda per la crescita: - riformare la sicurezza sociale - garantire un sano clima fiscale - revisione dei programmi di governo e le priorità e - rafforzare le prestazioni dell'economia canadese in investimenti, l'innovazione e il commercio. Il documento di lavoro, migliorando la sicurezza sociale in Canada. rilasciato al pubblico il 5 ottobre del 1994, fornisce i canadesi con un quadro per la partecipazione alla riforma del nostro sistema di sicurezza sociale. Il documento prende uno sguardo da vicino il motivo per cui il sistema di sicurezza sociale, non funziona per molti canadesi e per il paese nel suo complesso. Esso definisce una direzione di cambiamento e offre una serie di opzioni per ridisegnare i programmi federali in materia di lavoro, l'apprendimento e la sicurezza. Questi programmi includono assicurazione contro la disoccupazione, servizi di sviluppo di occupazione, l'assistenza all'infanzia e il sostegno federale per l'istruzione post-secondaria e di assistenza sociale. Documenti supplementari consentano di dettaglio analitico Questo documento è parte di una serie di documenti supplementari, che vengono rilasciate per fornire i canadesi con informazioni più dettagliate sul sistema attuale e le opzioni delineate nel documento di discussione. Questo materiale è destinato a fornire una più profonda comprensione dei problemi e per incoraggiare la partecipazione più consapevole al dibattito. Tutti i contributi alla discussione sono accolti e incoraggiati. E 'solo con la partecipazione di tutti i canadesi che siamo in grado di progettare un sistema efficace, equo, flessibile e conveniente, che risponderà alle esigenze dei canadesi di oggi e in futuro. Sommario Il primo GAI - Speenhamland Il contesto canadese - minimo sociale Senza GAI La rinascita dei concetti reddito garantito nel 1960 primi anni settanta - mancata attuazione di un GAI fine degli anni Settanta e primi anni Ottanta - il Shift per incrementalismo metà degli anni ottanta a il presente - la conclusione Revived GAI relative misure di adeguatezza basso reddito Misura Misure CCSD povertà soglie assolute di adeguatezza USA povertà Linee la Sarlo povertà Linee Confrontando misure di adeguatezza 1: Che cosa è un annuale di reddito (GAI) un reddito annuo garantito garantito (GAI) è un centro perenne in ogni discussione di riforma della sicurezza sociale. Le versioni moderne di L'idea è nata circa 30 anni fa e ancora comando molto interesse e attenzione oggi. E 'stato un tema dominante nei dibattiti di politica sociale in Canada da allora. Diverse persone significano cose diverse quando si parla di un GAI. Comune a tutti i concetti è un reddito piano fornite su base continuativa, che può variare in base alla configurazione della famiglia, l'età e le altre fonti di reddito. Oltre a questo, tuttavia, un GAI dipende dai fini è destinato a servire. Per alcuni, lo scopo di una GAI è quello di aumentare gli incentivi a lavorare riducendo il costo e la complessità del sistema attuale. Per gli altri, l'obiettivo è quello di stabilire un diritto non stigmatizzante ad un livello adeguato piano di reddito, a prescindere dalla sforzo di lavoro, per tutti i membri della società. Come verrà dimostrato, tali obiettivi diversi e contrastanti non possono essere soddisfatte con lo stesso sistema di garanzia di reddito. Nel documento di discussione federale, migliorando la sicurezza sociale in Canada, il punto è stato fatto che la conversione di programmi di sicurezza di reddito di Canadas in un unico GAI non è un'idea pratica. Questo documento fornisce una analisi per la comprensione delle difficoltà in cui versa l'attuazione di un GAI. proposte moderno per un GAI hanno di solito assunto due forme di base che riflettono questi molto diversi scopi e un numero infinito di variazioni. La forma di solito favorita da persone che pongono un alto valore di semplificazione e di lavoro incentivi è l'imposta negativa sul reddito (NIT). Si tratta di un pagamento da parte dei governi a persone o famiglie al di sotto certo livello di reddito in contrasto con le imposte sul reddito positive che sono pagati ai governi da parte di persone con un reddito al di sopra di un certo livello. Il NIT è stato inizialmente concepito dall'economista americano George Stigler, nel 1946 (George Stigler, The Economics of normativa sul salario minimo, American Economic Review (1946), pp. 358-365.), Come un altro modo di raggiungere gli obiettivi della legislazione sul salario minimo e raffinato da un altro economista americano, Milton Friedman, nel 1962 (Milton Friedman, capitalismo e Libertà (Chicago:. University of Chicago Press, 1962)), in un vero e alternativa a tutti i programmi di assistenza e di sostegno al reddito sociale. La seconda forma di GAI è il demogrant universale (UD). Si tratta di un pagamento a tutte le persone indipendentemente dal reddito. Di solito è favorita da coloro che vedono il GAI come un diritto di cittadinanza e il cui scopo è quello di eliminare la povertà e portare a più equa condivisione dei benefici economici della società. Questo approccio ad un GAI ha ricevuto la sua descrizione classica da un altro economista americano, Robert Theobald, nel suo libro 1965, uomini liberi e del libero mercato. (Robert Theobald, uomini liberi e del libero mercato (New York: Anchor Books, 1965).) La negativa sul reddito (NIT) Un NIT si compone di tre elementi: la garanzia, il tasso di riduzione e il break even a livello di reddito. NIT Elementi per una famiglia di quattro riduzione del tasso: il 27 per cento break even livello di reddito: 55.555 La garanzia è il livello massimo beneficio per ogni famiglia. Esso varia in base alle dimensioni della famiglia e della configurazione. In questo esempio, il livello di beneficio per una famiglia di quattro con nessuna fonte di reddito le NIT, è pari alla garanzia di 15.000. (Questo è solo a scopo illustrativo. Una descrizione del ragionamento alla base dei parametri è fornito nelle sezioni 2 e 3 in cui le opzioni sono sviluppati più pienamente.) Il tasso di riduzione entra in gioco quando una famiglia ha fonti di reddito diverso dal NIT. Il tasso di riduzione del 27 per cento significa che per ogni dollaro di reddito diverso dal NIT, il beneficio NIT è ridotta di 27 centesimi. Ad esempio, se una famiglia di quattro guadagna reddito di 5,000, il suo livello vantaggio è diminuito di 0,27 volte 5.000 o 1.350. Il suo vantaggio totale sarebbe quindi 13.650 (cioè 15.000 meno 1.350). Come risultato del reddito lavoro supplementare di 5.000, i familys totale reddito aumenta di 3.650 (cioè da 15.000 a 18.650). Il 18.650 è costituito da 13.650 di NIT e 5.000 dei guadagni. Il livello di pareggio di reddito è il livello di reddito massima a cui benefici NIT possono essere ricevuti. Anche Esso varia in base alle dimensioni della famiglia e della configurazione. In altre parole, per le famiglie con fonti non NIT di reddito superiore al pareggio livello di reddito, il vantaggio NIT è pari a zero. In questa illustrazione il pareggio livello di reddito è 55.555. (Nei disegni NIT in cui la riduzione si applica a tutti i redditi da fonti diverse la garanzia, il pareggio sarà sempre uguale alla garanzia diviso per il tasso di riduzione (cioè 55.555 15.000 diviso per 0,27). Se un livello di soglia di altri redditi è esentata . dal tasso di riduzione, non si applica questa formula) In base a questo sistema, è possibile individuare tre gruppi: quelli che ricevono i benefici completi, coloro che ricevono i benefici parziali e coloro che ricevono alcun beneficio. Le famiglie senza fonti di reddito diverso dal NIT ricevono il beneficio completo di 15.000 (vale a dire la garanzia). All'altro estremo, le famiglie con reddito non-NIT oltre 55.555 ricevono alcun beneficio. Tra questi due estremi, le famiglie con reddito non-NIT compreso tra 1 e 55.554 ricevono un beneficio pari alla garanzia ridotta di 27 centesimi per ogni dollaro di reddito non-NIT. (La formula è: benefici uguale garanzia di meno (proventi non NIT moltiplicato per tasso di riduzione).) Nel sistema NIT, c'è sempre un incentivo per i beneficiari di guadagnare di più o acquistare da fonti diverse dal beneficio NIT. Tuttavia, a meno che la garanzia è fissato alla soglia di povertà, il NIT non può eliminare la povertà da sola. Tipicamente, la garanzia NIT sarà inferiore alla soglia di povertà di progettazione, in modo da mantenere un incentivo per ottenere altri redditi. Il NIT può, tuttavia, ridurre il tasso di povertà e la profondità della povertà se la garanzia di base è al di sopra del livello minimo degli attuali programmi di assistenza sociale di ultima istanza. Fondamentale per la strategia di lotta contro la povertà NIT è la convinzione che ha migliorato incentivi al lavoro porterà ad una maggiore offerta di lavoro, subordinata alla disponibilità di posti di lavoro, e portare a livelli più bassi di povertà e livelli più bassi di spesa pubblica. Un elemento importante della strategia è quello di garantire l'integrazione del NIT con il sistema di imposta sul reddito personale. Questo per garantire che i beneficiari NIT non pagano le tasse così l'effetto combinato del tasso di riduzione e il tasso di imposta sul reddito non crea un disincentivo lavoro. Tuttavia, questo obiettivo è estremamente difficile da realizzare, poiché il beneficio NIT si basa sul nucleo familiare, e le imposte sul reddito personale e le imposte sui salari sono basati sul singolo. Tuttavia, anche se l'integrazione perfetta è un obiettivo irraggiungibile, mantenendo la somma del tasso di riduzione NIT e il tasso marginale Irpef, vale a dire l'aliquota fiscale marginale effettiva, il più basso possibile è un fattore importante per il NIT. Il demogrant Universale (UD) Nell'ambito di un approccio UD, tutti i cittadini adulti avrebbe ricevuto un assegno esentasse da parte del governo adeguato per le loro esigenze e quelle della loro famiglia. Reddito da tutte le altre fonti sarebbe tassato (le tariffe dovrebbero essere fissate a livelli sufficienti a pagare per l'UD). reddito disponibile totale sarebbe pari al UD più reddito netto da altre fonti. Le imposte sul reddito altra potrebbe o essere applicate in modo forfettario o scalati ad aumentare con l'aumentare del reddito come sotto attuale sistema fiscale progressivo Canadas. Ad esempio, un UD potrebbe fornire un beneficio non imponibile di 20.000 a una famiglia di quattro e sarebbe tassare redditi da altre fonti ad un tasso flat tax del 50 per cento. (L'opzione UD nella sezione 3 ha una struttura fiscale progressiva con tre tariffe. Questa struttura di tasso unico è scelto qui per semplificare l'illustrazione). In base a tale proposta, una famiglia con un utile di 30.000 avrebbe ricevuto un reddito disponibile pari alla garanzia più metà del loro reddito da altre fonti o 35.000 (cioè 20.000 più 15.000). In contrasto con l'approccio NIT, che fornirebbe benefici netti solo per le famiglie fino al pareggio livello di reddito, l'UD offre vantaggi alle famiglie tutta la strada fino alla scala del reddito. L'UD non ha tasso di riduzione o pareggio livello di reddito. Una conseguenza è che le spese UD sono molto superiori a spese NIT. Un'altra conseguenza è che il livello di tassazione deve essere aumentato per pagare il più alto livello di spesa. Dal punto di vista di alcuni economisti, un GAI fissato a soglie di povertà e con un tax rate al 100 per cento su altri redditi fino a tali soglie sarebbe il modo più economico per eliminare la povertà. (Ad esempio J. E. Meade, la struttura e la riforma delle imposte dirette (London:. Istituto di studi fiscali, George Allen e Urwin, 1978)), tuttavia, eliminerebbe qualsiasi incentivo finanziario ad accettare un lavoro pagato meno le soglie di povertà. Inoltre, maggiore è il tasso di imposta agli altri redditi, meno l'incentivo a fare un lavoro di pagamento al di sopra ma vicino ai livelli di soglia. Al netto delle imposte dei redditi non sarebbero significativamente più alto, rispetto alla garanzia, fino a quando i guadagni erano notevolmente al di sopra dei livelli di soglia. In sintesi Ci sono due principali orientamenti filosofici attorno al concetto di GAI. Un orientamento si concentra su GAI come un meccanismo per facilitare l'adeguamento ai cambiamenti economici. Si occupa di una struttura di programma semplificato e coerente, gli incentivi al lavoro e il controllo della spesa. Il secondo orientamento si concentra su obiettivi anti-povertà. Si occupa per lo più con la redistribuzione del reddito e la creazione di diritti basati sulla cittadinanza. Con due concetti fondamentalmente diversi, molti degli obiettivi commerciali uni contro gli altri. Tuttavia, ciò non significa che i modelli non possono essere combinati. Infatti, le proposte GAI che sono state fatte in Canada differiscono nella loro enfasi sull'importanza dei diversi obiettivi. La rassegna storica (Appendice A) illustra l'equilibrio ha colpito più di obiettivi contrastanti in diverse proposte e si conclude individuando il gran numero di obiettivi spesso contrastanti che fanno parte del dibattito GAI. Sezione 2 fornisce il contesto per pensare a un GAI nel 1990 e pone le basi per il GAI disegni sviluppato nella sezione 3. Questi approcci non sono destinate ad essere opzioni nel senso comune del termine, ma piuttosto generici illustrazioni dei due principali concetti del GAI di cui sopra. Lo scopo è quello di dimostrare chiaramente i punti di forza e di debolezza di ogni approccio. La sezione 4 conclude il documento, esaminando il ruolo GAI si avvicina potrebbe giocare in riforma della sicurezza sociale. 2: Contesto per una GAI nel 1990 un mondo che cambia significa diverse sfide negli anni successivi al periodo di massimo splendore di proposte globali GAI nei primi anni 1970 (vedi Appendice A), l'ambiente per considerare un GAI è cambiata notevolmente. Tra il 1943 e il 1971, programmi e servizi governativi proliferavano a fornire gran parte delle infrastrutture che Leonard Marsh proiettata come necessario per raggiungere il suo 1943 visione di un minimo sociale. i programmi di disoccupazione e di assicurazione sanitaria sono stati messi in atto. programmi di assistenza sociale sono stati messi a disposizione di tutte le persone in stato di bisogno, e benefici per bambini sono state introdotte per aiutare i genitori con i costi di crescere i loro figli. Un reddito minimo garantito per gli anziani è stato creato attraverso una combinazione di pensioni (Old Age Security e CanadaQuebec piani pensionistici) e assistenza di reddito-testato (il supplemento di reddito garantito e supplementi provinciali per gli anziani). Un altro cambiamento è stato l'importanza calo di reddito impiego come mezzo di supporto paradossalmente, allo stesso tempo la percentuale impiegato della popolazione aumentava. Dal 1945 ai primi anni 1970, i tassi di disoccupazione erano generalmente bassi, e guadagni reali sono in aumento. La maggior parte delle famiglie a basso reddito guidati da persone di età inferiore ai 65 hanno ricevuto la maggior parte del loro reddito da guadagni. La povertà è più diffusa di quanto oggi, ma la dipendenza dai trasferimenti statali è stato inferiore. Da quel momento, più alti tassi di disoccupazione, la più ampia disponibilità di, e diminuendo stigmatizzazione di ricezione, i trasferimenti statali e la crescita di gruppi che devono affrontare notevoli difficoltà a guadagnare redditi adeguati lavoro retribuito, come le famiglie monoparentali, hanno cambiato immagine. In un mondo del genere, le preoccupazioni circa fornendo ulteriori disincentivi a lavorare con l'introduzione di un reddito garantito non stigmatizzante, in particolare se si fornisce un reddito più adeguata rispetto agli attuali prestazioni di assistenza sociale, sono diventati sempre più diffusa. Allo stesso tempo, la situazione fiscale dei governi è peggiorata. Fino a metà degli anni 1970, il bilancio federale era di solito equilibrata nell'arco del ciclo economico, e il debito in rapporto al PIL è stato in costante calo dai livelli molto elevati raggiunti durante la seconda guerra mondiale. E 'stato possibile, a causa della elevata, e solo brevemente interrotto la crescita, economica, di introdurre nuovi programmi costosi, equilibrare il bilancio e credo che le risorse per introdurre e arricchire i programmi di governo avrebbe continuato ad aumentare. Anche questo, non può più essere assunto. Misure di Adeguatezza Il concetto di adeguatezza è cambiato nel corso del tempo. Quello che oggi è considerato adeguato deve soddisfare uno standard più generosa di quanto non sarebbe stata applicata in passato. Questo perché, per lunghi periodi di tempo, il concetto di adeguatezza è relativo piuttosto che assoluto. (Per esempio, guardiamo indietro nel 1967 come un anno di prosperità e praticamente la piena occupazione (il tasso di disoccupazione era del 3,8 per cento). Tuttavia, in quello stesso anno, (utilizzando del 1978 a basso reddito cut-off come una misura della povertà), la povertà infantile tasso è stato di oltre il 40 per cento - più del doppio del tasso nel 1992, quando il tasso di disoccupazione era 11,3 per cento e, come tabella 1 indica il livello di adeguatezza era un po 'più generoso Vedi: MC Wolfson e JM Evans, Statistiche Canadas basso reddito Cutoffs:. Le preoccupazioni e le possibilità metodologiche. (Ottawa: dicembre 1989) p 59.) Questa relatività si riflette in Statistica Canadas basso reddito cut-off (LICOS). I LICOS non sono linee ufficiali di povertà, ma sono spesso utilizzati come tali da organizzazioni come il Consiglio Nazionale del Welfare. I LICOS si basano su una rivalutazione periodica della percentuale complessiva di reddito speso per il cibo, riparo e vestiti dalla famiglia media. Questa percentuale è diminuita nel corso del tempo dal 50 per cento nel 1959-34,7 per cento nel 1992, e il risultato è una linea di povertà che è aumentato del 62 per cento in termini reali nel corso degli ultimi 30 anni. Il basso reddito cut-off sono indicizzati all'inflazione annua. TABELLA 1: Percentuale di famiglia media reddito spesa in cibo, riparo e abbigliamento LICO livello è per una famiglia di quattro persone nel 1993 dollari, i centri urbani di 500.000, più 1959 Proporzione - 50 per cento LICO Livello - 19.123 1.969 Proporzione - 42 per cento LICO Livello - 24.870 1978 Proporzione - 38,5 per cento LICO Livello - 28.243 1.986 Proporzione - 36,2 per cento LICO Livello - 30.645 1.992 Proporzione - 34,7 per cento LICO Livello - 31.007 Fonte: (Cat. 13-207 varie questioni) Statistics Canada, redditi distribuiti per dimensione in Canada, altre misure della povertà, sia relativa e assoluta, sono disponibili per il Canada anche. Alcune di queste misure sono riassunte in Appendice B. Considerazioni per un GAI design universalità, targeting e di risposte Un GAI fornito come UD avrebbe diritto di ogni individuo e la famiglia per un beneficio indipendentemente dal reddito. Il beneficio potrebbe variare in base all'età, la dimensione della famiglia, di tipo familiare o ad altri criteri demografici. Sarebbe non imponibili. Il costo aggiuntivo netto di introdurre un GAI (oltre l'offset forniti dal costo dei programmi andrebbe a sostituire) sarebbe stata recuperata attraverso il sistema di imposta sul reddito personale. (Questo è assunto per semplicità di analisi. I costi potrebbero essere compensati aumentando altre imposte o riducendo altre spese). Il più progressiva che il sistema, il più mirato il risultato netto. In effetti, la demogrant offre vantaggi universalmente, e poi cerca di indirizzare i bisognosi regolando aliquote Irpef. I vantaggi sono l'eliminazione dello stigma e la semplificazione del sistema (se altri crediti di sostegno al reddito e fiscali sono eliminati) in termini di amministrazione. Tuttavia, gli svantaggi sono un livello molto più elevato di tassazione del governo, lavoro negativo, il risparmio e gli effetti di incentivazione degli investimenti, e l'inopportunità di inviare un gran numero di controlli per le famiglie a reddito medio e superiore che poi rimborsare i benefici attraverso tasse più alte. Dal momento che il sistema di assistenza sociale sarebbe stata eliminata o significativamente ridotta sia sotto l'UD e il NIT (ulteriori discussioni in basso), è fondamentale che il design GAI essere sensibile alle variazioni del reddito e della famiglia la struttura. Il demogrant è nella posizione ideale per raggiungere questo obiettivo dal momento che il massimo beneficio viene sempre consegnato a tutta la popolazione, ed il disegno può essere fatto invariante di tipo familiare (ulteriori discussioni in basso). Il risultato sarebbe un notevole risparmio amministrative. Perché un GAI espresso attraverso un meccanismo NIT offre vantaggi solo a quelli con reddito al di sotto del livello di pareggio di reddito, si paga meno di un UD di parità di generosità e recupera meno da aumenti fiscali o riduzioni di spesa. Tuttavia, questo significa che, per essere sensibili alle fluttuazioni dei redditi disponibili durante l'anno, un sistema di imposta negativa sul reddito deve essere in grado di tenere traccia delle fluttuazioni del reddito su base famiglia così benefici sono consegnati in caso di necessità, e pagamenti in eccesso e in difetto ridotti al minimo. (Il supplemento di reddito garantito per la pensione di vecchiaia affronta il problema della capacità di risposta, consentendo persone la possibilità di applicare per i benefici sulla base del loro reddito previsto per l'anno in corso piuttosto che il loro reddito effettivo nel corso dell'anno precedente, come riportato sul loro imposta sul reddito tornare. Tuttavia, il reddito atteso degli anziani è in genere molto più prevedibile rispetto al reddito atteso della popolazione in età lavorativa. di conseguenza, il rischio di pagamenti in eccesso e in difetto è molto più piccolo.) Inoltre, dal momento che viene applicato un test di reddito familiare, l'amministrazione struttura deve essere sensibile ai cambiamenti nella struttura familiare. Per fare questo, gli alti costi amministrativi dovrebbero essere sostenute. L'alternativa è quella di pagare la prestazione in un tasso mensile uniforme basato sul anni precedenti reddito familiare netto come riportato sulla dichiarazione dei redditi, un metodo ora utilizzato con il Child Tax Benefit. Questo sistema, tuttavia, è possibile solo quando i pagamenti assistenziali altamente reattivi continuano a funzionare. Se l'assistenza sociale deve essere eliminato, il GAI deve essere reattivo. Come gran parte del sistema attuale potrebbe essere ReplacedReformed proposte GAI avanzate da vari sostenitori in tempi diversi in Canada dovrebbe sostituire tutto o in parte, dei seguenti tipi di programmi. pagamenti di assistenza sociale, come ad esempio i sistemi di assistenza sociale provincialterritorial e comunali esistenti, sono attualmente forniti a persone e famiglie sottoposte a una verifica della necessità del loro reddito e patrimonio. La maggior parte delle proposte GAI canadesi hanno suggerito ritirare i finanziamenti federali per questi programmi nell'ambito del piano di assistenza in Canada. 1971 Senato comitato speciale per la povertà ha anche proposto un rimborso alle province e territori per i costi totali dei pagamenti di assistenza sociale a coloro che non sono coperti dal suo GAI. (Vedi Appendice A.) Assicurazione contro la disoccupazione prevede benefici per le persone assicurate ammissibili. proposte GAI, come quelli del Senato comitato speciale per la povertà, la Commissione Macdonald e la tassa IncomeSimplified Wolfson garantito hanno incluso cambiamenti disoccupazione per renderlo più di un programma di assicurazione aumentando requisiti di ammissione, riducendo i livelli di prestazioni durate Andor, e la rimozione caratteristiche non assicurative quali le prestazioni a livello regionale estesi. (Vedi Appendice A.) pagamenti demogrant sono fatti per i membri di un gruppo di popolazione come i genitori di bambini o gli anziani (ad esempio, assegni familiari prima del 1993 e Old Age Security). Negativo benefici fiscali sul reddito sono previste per le persone e le famiglie soggette a una prova di reddito come con il Child Tax Benefit, il supplemento di reddito garantito, i coniugi benefici Allowance e la Goods and Services Tax Credit. crediti d'imposta sul reddito e le deduzioni si basano sulle caratteristiche demografiche, quali i crediti personali e sposati, l'equivalente al credito sposato, il credito di età e l'ex di credito bambino. Federale - Considerazioni provinciali Qualsiasi GAI richiederebbe modifiche fondamentali federali - regime fiscale provinciali. ruoli federali e provincialterritorial di base per quanto riguarda il finanziamento e la consegna del programma dovrebbero essere accuratamente riesaminato, e nuove disposizioni negoziata. Il raggiungimento di un consenso sarebbe molto difficile. In questa sezione, due opzioni GAI illustrative sono sviluppati e analizzati: - Opzione 1: Un adeguato demogrant universale (UD) - Opzione 2: una imposta negativa sul reddito (NIT). Entrambe le opzioni GAI sono diretti alla popolazione in età lavorativa. Non cambiano il sistema di benefici diretti alle persone 65 e oltre, dal momento che il sistema fa parte di una revisione politica separata di questioni anziani annunciate nel bilancio 1994 e da un GAI per gli anziani esiste già. Tuttavia, i crediti rimborsabili e non rimborsabili nel sistema fiscale sul reddito personale federale sulla base di caratteristiche demografiche avrebbero cambiato sotto il GAI approcci qui presentata. Anziani sarebbero interessate da questi cambiamenti al sistema di imposte sul reddito personale. Ma ai fini di illustrazione, gli anziani si presume di continuare ad essere soggetti al sistema fiscale esistente in entrambi gli scenari, anche se tale regime non potrebbe essere attuata in pratica. Federale di condivisione dei costi delle prestazioni di sostegno al reddito offerte dai programmi di assistenza sociale provincialterritorial e comunali nell'ambito del Piano di Assistenza Canada cesserebbe in entrambi i modelli GAI. Nell'opzione UD, il GAI inoltre sostituire provinciale assistenza territoriale e comunali sociale nella maggior parte dei casi (assistenza solo in contanti). Nell'opzione NIT, provincialterritorial e comunali di assistenza sociale avrebbe continuato a funzionare, ma un programma molto più piccolo sarebbe stato necessario. In entrambi i casi, la condivisione dei costi dei servizi sociali nell'ambito della PAC sarebbe continuata. Dal momento che entrambe le opzioni eliminano alcuni crediti personali, le entrate fiscali provinciali sono aumentati. Nell'opzione UD, dove il GAI sostituisce assistenza sociale interamente i ricavi provincialterritorial vengono messi verso il costo del GAI. In opzione NIT, i ricavi provincialterritorial aggiuntivi vengono restituiti ai contribuenti attraverso aliquote dell'imposta sul reddito personale inferiore. Entrambi i modelli GAI conserverebbero il programma di assicurazione contro la disoccupazione, ma i requisiti di ammissione passerebbe da 12-20 settimane di lavoro nel corso dell'anno precedente a 26 settimane. La durata massima dei benefici sarebbe anche 26 settimane. Benefit rates would decline 15 percentage points to 40 percent of insurable earnings for persons earning more than one half of the maximum insurable earnings or persons without dependents, and decline to 45 percent for persons earning less than half the maximum insurable earnings and with dependents. Special benefits, such as those for sickness, adoption, maternity and parental purposes, would continue under current parameters as would Unemployment Insurance Developmental Uses programs. With respect to fiscal implications, the UD requires higher expenditure levels than provided for in the fiscal parameters laid out in the February 1994 Budget and in Improving Social Security in Canada. Personal income tax rates are increased to pay the additional costs so the result is deficit neutral (i. e. there is no increase to the combined federal and provincialterritorial deficits). This tax increase enables a better illustration of the essential trade offs between cost, adequacy and work incentives under a design based on redistributing income and providing an adequate floor level of income support to all persons, regardless of their work pattern. However, since proposals based on an NIT design traditionally have a greater concern for fiscal implications and work incentives than for adequacy, the second design is constrained to be more consistent with the fiscal parameters established in the February 1994 Budget and in Improving Social Security in Canada. The NIT does not result in a higher deficit level than the framework outlined in those documents and, to the extent possible, respects the expenditure and tax level in that framework. In short, the first design will illustrate the cost of an adequate GAI while the second will illustrate what kind of GAI can be provided within the governments current fiscal framework. Both of the following GAI designs are illustrative and are put forward to provide information on the trade offs and issues involved. They are not intended as specific proposals. Option 1 - An Adequate Universal Demogrant (UD) The UD would provide the following income guarantees: All adults 18 to 64 - 7,000 First dependent child less than 18 in a lone-parent family - 7,000 All other dependent children less than 18 - 3,000 For example, a household consisting of a lone parent and one child under age 18 would receive 14,000, while a married or common-law couple with two children under age 18 would receive 20,000. Benefits would not be taxable. As described previously, the Unemployment Insurance system would be significantly returned, the basic personal credit and married and equivalent to married credits in the personal income tax system would be abolished, as would the refundable Child Tax Benefit and the GST Credit. While falling short of the standard of adequacy represented by the LICOs this design would provide an income for all families with children headed by persons under age 65. It would be above current social assistance levels in all provinces and territories except Ontario and would be over 70 percent of the commonly used measures of adequacy for such families. (It falls short, however, of the adequacy levels provided by social assistance for single disabled persons in all provinces and territories.) Because it falls short of full adequacy, some or all provinces and territories might want to top-up benefits through an income or needs-tested program similar to those now provided to top-up the OASGIS system for seniors. Aside from such small residual programs, provinces and territories would cease to make cash social assistance payments, and the federal government would cease its contributions to such programs under the Canada Assistance Plan. Provincialterritorial social assistance savings are used to pay for the UD. Option 2 - A Negative Income Tax (NIT) The NIT design would provide the following income guarantees: Negative Income Tax All adults 18 to 64 - 4,500 First dependent child less than 18 in a lone-parent family - 4,500 All other dependent children less than 18 - 3,000 For example, a household consisting of a lone parent and one child under age 18 would receive 9,000, while a married or common-law couple with two children under age 18 would receive 15,000. These guarantees represent less than one third of LICOs for a single adult and between 50 and 56 percent of the cut offs for families of two or more persons. They are also below current social assistance incomes in almost every province and territory. (See Appendix C.) Benefits would be reduced at a rate of 15 percent for the first adult in the family, by six percent for the second adult or first dependent child under age 18 in a lone-parent family and by three percent for each of the first two children under age 18 in all other families. These reduction rates would be stacked. That is, a household consisting of a lone parent and one child under age 18 would have its benefits taxed back at a rate of 21 percent on the parents income, (i. e. 15 percent plus 6 percent) while a married or common-law couple with two children under age 18 would have their benefits taxed back at a rate of 27 percent (i. e. 15 plus 6 plus 3 plus 3 equals 27 percent). The reduction rate would not exceed 27 percent, even if there were more than two dependent children in the family. Under this design, the break even levels of income, i. e. the level of other income where no GAI benefit would be received, would be as follows for common household configurations: One adult Benefit Level - 4,500 Reduction Rate - 15 percent Break even Income Levels - 30,000 One adult-one child Benefit Level - 9,000 Reduction Rate - 21 percent Break even Income Levels - 42,857 Two adults Benefit Level - 9,000 Reduction Rate - 21 percent Break even Income Levels - 42,857 Two adult-one child Benefit Level - 12,000 Reduction Rate - 24 percent Break even Income Levels - 50,000 One adult-two children Benefit Level - 12,000 Reduction Rate - 24 percent Break even Income Levels - 50,000 Two adults-two children Benefit Level - 15,000 Reduction Rate - 27 percent Break even Income Levels - 55,555 The benefits would be offset by all the program and tax changes outlined for the UD. The only exception is provincialterritorial social assistance. Since the NIT provides lower guarantee levels than the UD, a second income support tier is needed to enhance the adequacy of the benefits provided. In other words, a significantly reduced social assistance system would continue to exist, wholly framed and delivered by provinces and territories without federal cost-sharing, although the social assistance benefits provided would be much lower than they are currently and the number of people needing the system would be much smaller. This design does not add to the deficit presented in the February 1994 Budget. It focuses on enhancing financial incentives to work, facilitating economic adjustment and simplifying the income security system for those under age 65. Options Results (Source: HRDC analysis using Statistics Canadas Social Policy Simulation Database and Model (SPSDM). These results do not account for behavioural effects (such as changes in work effort) or macroeconomic impacts. The analysis of the impact of both options on the incidence of low income is based on Statistics Canadas after-tax LICOs in order to capture properly the effects of changes to personal income tax. (The abolition of the basic personal credit, the married credit and the equivalent to married credit will increase taxes paid by all taxpayers, while enabling the level of the income guarantees to be higher than they would otherwise have been. Analyzing the effect of these changes on the basis of pre-tax LICOs would significantly overstate the benefits accruing to individuals and families in terms of disposable (i. e. post-income-tax) income.) On this basis, before the implementation of a GAI, 12.8 percent of families and unattached individuals had after-tax incomes below the Statistics Canada after-tax LICOs. After the implementation of the UD, the incidence of low income would decline to 9.7 percent. The implementation of the NIT would reduce the incidence of low income to 11.4 percent. (See Table 2.) TABLE 2: Distributional Impact on Low Income Rate of low income Pre-GAI - 12.8 percent Universal Demogrant - 9.7 percent Negative Income Tax - 11.4 percent Depth of low income Pre-GAI - 6.3 billion Universal Demogrant - 3.5 billion Negative Income Tax - 4.2 billion Source: HRDC Analysis using SPSDM. Because of the large reductions in Unemployment Insurance benefits in both models and because, in some cases, the provided guarantee levels fall short of those benefits now available through refundable income tax credits and provincialterritorial and municipal social assistance programs, both designs result in some households moving into poverty on an after-income-tax basis, and others climbing above the after-tax low income thresholds. In both cases, however, the latter group outnumbers the former, so the incidence of low income is reduced. Some or all of those who fall below the low-income thresholds might be raised back above them by provincialterritorial and municipal income or means-tested top-up programs which would supplement the GAI benefit. (No attempt has been made to estimate the effect of such top-ups on the rate or depth of low income.) The depth of low income measures the difference between the low-income thresholds and the incomes of low-income families and unattached individuals. Before the implementation of the GAI options, the aggregate depth of low income was 6.3 billion. The UD reduces the depth of low income by 45 percent to 3.5 billion. The NIT reduces it by 33 percent to 4.2 billion. (See Table 2.) In this section, winners, losers and neutrals are analyzed according to disposable income, provinceterritory and economic family type for each design. (For the purposes of this paper, families and unattached individuals are designated as winners as a result of the implementation of a GAI design if their annual post-income-tax income increases by 250 or more. They are designated as losers if, as a result of the implementation of a GAI design, their post-income-tax income declines by 250 or more. If, as a result of the implementation of a GAI design, post-income-tax income increases or declines by less than 250, the change is designated as neutral.) Under the NIT, 42 percent of families and unattached individuals are winners, 51 percent are losers and 7 percent are neutral. Under the UD design, 59 percent of families and unattached individuals are winners, 37 percent are losers and four percent are neutral. (See Table 3.) TABLE 3: Distribution of WinnersLosers By Income Category Disposable Family Income of 0 to 20,000 Universal Demogrant Winners - 77 percent Losers - 20 percent Neutral - 3 percent Negative Income Winners - 70 percent Losers - 20 percent Neutral - 10 percent Disposable Family Income of 20,000 - 50,000 Universal Demogrant Winners - 65 percent Losers - 30 percent Neutral - 5 percent Winners - 41 percent Losers - 52 percent Neutral - 7 percent Disposable Family Income of 50,000 and higher Universal Demogrant Winners - 32 percent Losers - 65 percent Neutral - 3 percent Negative Income Winners - 19 percent Losers - 77 percent Neutral - 4 percent Total Disposable Family Income Universal Demogrant Winners - 59 percent Losers - 37 percent Neutral - 4 percent Negative Income Winners - 42 percent Losers - 51 percent Neutral - 7 percent Source: HRDC Analysis using SPSDM. Under the NIT design, winners outnumber losers in the 0 to 20,000 disposable income group. (Disposable income is defined as all sources of income (except the GAI) less the payment of federal and provincialterritorial income taxes and payroll taxes such as Unemployment Insurance premiums and CanadaQuebec Pension Plan contributions.) Losers outnumber winners in the middle and upper income groups. (See Table 3.) Under the UD design, winners outnumber losers for both the low and middle disposable income groups. In either option, there are a significant number of losers with family incomes below 20,000 because, for many, the GAI does not offset UI losses. In the middle income range, i. e. 20,000 to 50,000, there are large numbers of losers because the tax increases (through rate increases or losses of the personal credits) necessary to finance the GAI are larger than any GAI benefits they might receive. Under the NIT, families and unattached individuals who are winners gain an average of 2,500 in additional income. Families and unattached individuals who are losers lose smaller amounts than winners gain. Under the UD design, the biggest winners are in the middle income range with large gains occurring also in the high income range (mostly large families with children who do not currently use UI). Losses for families and unattached individuals depend on income with average losses exceeding 14,000 in the upper category. TABLE 4: Size of Gain and Loss by Income Category Disposable Family Income: Family here refers to economic family which may be either an unattached individual or a unit of two or more related persons. Disposable Family Income of 0 to 20,000 Universal Demogrant Winners - plus 4,490 Losers - minus 3,340 Negative Income Tax Winners - plus 2,680 Losers - minus 2,130 Disposable Family Income of 20,000 to 50,000 Universal Demogrant Winners - plus 5,710 Losers - minus 4,380 Negative Income Tax Winners - plus 2,870 Losers - minus 2,030 Disposable Family Income of 50,000 and higher Universal Demogrant Winners - plus 4,990 Losers - minus 14,050 Negative Income Tax Winners - plus 2,390 Losers - minus 2,640 Source: HRDC Analysis using SPSDM. Under the NIT, winners outnumber losers for all economic family types except unattached individuals and couples with no children under 18. On average, couples with children under 18 have the largest gains followed by lone parents with children under 18. Under the UD design, winners outnumber losers among all economic family types except unattached individuals. In both designs, families with children fare better than families without children under 18. (See Table 5.) TABLE 5: Distribution of WinnersLosers By Family Type Family Type: Family here refers to economic family which may be either an unattached individual or a family of two or more persons. Family Type: Families without children Universal Demogrant Winners - 50 percent Losers - 45 percent Neutral - 5 percent Winners - 37 percent Losers - 55 percent Neutral - 8 percent Family Type: Families with children Universal Demogrant Winners - 73 percent Losers - 25 percent Neutral - 2 percent Negative Income Winners - 50 percent Losers - 45 percent Neutral - 5 percent Source: HRDC Analysis using SPSDM. Work Incentives The effects of either of the two GAI models on the amount of work supplied cannot be predicted with any precision. While experiments have been conducted in the United States and Canada, those participating knew that their benefits were not permanent and, consequently, they were not likely to change their behaviour as much or in the same manner had the GAI been ongoing. As a result, total hours worked fell by about five percent on average. The work reduction was largest for second earners in two-earner households and weakest for the main earner. Further, the negative work effect was higher the more generous the benefit level. The GAIs discussed here are very different from those of the experiments because of the inclusion of a UI reform based on a purer social insurance model. This would improve the overall impact on work incentives (other than for part-year work). Whether this is enough to offset the negative effect of the GAI itself is not known. The main aspect of the NIT and UD design that would help improve work incentives is the removal of high reduction rates for social assistance. Generally effective marginal tax rates for the social assistance population would drop from about 75 to 80 percent to around 50 percent for the NIT and 40 percent for the UD. In the case of the NIT, the lower rates would only occur if the provincialterritorial social assistance program top-up does not add yet another level of reduction rates to the system. (Since there is no family income testing in the UD option, work incentives could be significantly improved for a low income spouse or common-law partner since incomes are not added together for the purposes of calculating the benefit or for taxation.) For the NIT, this improvement to incentives would be offset by three features. One is the higher benefits available to working poor and low income families at their current level of work effort. The second is the higher reduction rate on the NIT than on the Child Tax Benefit and the GST Credit for the middle income group (up to 27 percent compared to about 10 percent), and the third is a lower personal income tax threshold for all levels. For the UD, the improvement of work incentives for social assistance recipients is offset by higher benefit levels at current levels of work effort, a lower personal income tax threshold and the sharp increase in the marginal rates of the personal income tax system (e. g. from 25 percent to 40 percent in the low bracket, 39 percent to 64 percent in the middle bracket and 45 percent to 72 percent in the highest bracket). Horizontal Equity With horizontal equity, the benefits received by families in different circumstances, but at similar levels of income, should reflect those different circumstances. Both proposals have major horizontal impacts. The UD provides more benefits to families with children at every level of income, an effect similar to the Family Allowance program before the clawback, but at a much higher benefit level. The NIT on the other hand, reduces the income level at which families with children can receive benefits by about 10,000 (e. g. for a family with two children, the maximum income level under the Child Tax Benefit is about 65,000 and under the NIT, about 55,000). Generally, except in the case of children, the UD benefits do not vary by family type. Since all adults receive the same benefit level and since children over 18 who are living with their parents receive adult benefits and the personal credits are eliminated, there is no difference in benefit levels for different family configurations. For example, single - and dual-earner families receive the same benefits at the same income level (unlike the current system where single earners claim a personal and a married income tax credit, and dual earners get more by claiming two personal income tax credits). However, since the net impact of the UD depends on the combined effect of the transfer plus the increase in personal income taxes and since personal income taxes are individually based, the net benefits to any family will depend on the distribution of income between spouses. Whether this is desirable or not depends on ones point of view. (For example one consequence of family type neutrality is the equity issue known as The Bankers Wife problem, where a non-working spouse of a high income individual receives a maximum benefit.) With respect to the NIT, there is also more neutrality to family type (for example single - and dual-earner families are treated the same) but, unlike the UD, there is a family-based income test. This means that two people reporting as a couple must add their incomes together to claim their benefits while two people reporting as singles do not, resulting in more favourable treatment. Costs The cost of the UD program is 146 billion. The reallocation of existing expenditures and refundable tax credits (30.2 billion including the provincialterritorial expenditure on social assistance) and the elimination of the personal credits (22.8 billion, including both federal and provincialterritorial effects) fall far short of financing the program. As a result, an additional 93 billion is required in personal income tax revenue through increased rates. (See Table 6.) The cost of the NIT is more modest (i. e. 37.3 billion) and is financed entirely from the reallocation of expenditures and refundable credits (21.1 billion, which does not include provincialterritorial social assistance as does the UD) and the elimination of the basic, married and equivalent to married credits (not including the increases in provincialterritorial tax revenues which are assumed to be returned to taxpayers through lower tax rates). TABLE 6: Fiscal Impact ( Billion) GAI program cost Universal Demogrant - 146.1 billion Negative Income Tax - 37.3 billion UI, CTB, CAP, GST tax credit reallocation Universal Demogrant - 30.2 billion Negative Income Tax - 21.1 billion Elimination of personal credits Universal Demogrant - 22.8 billion Negative Income Tax - 16.2 billion Increased tax rate Universal Demogrant - 93.1 billion Negative Income Tax - 0 billion Source: HRDC Analysis using SPSDM. While the UD design yields favourable results in terms of winners and losers and substantially reduces poverty, it requires enormous increases in federal and provincialterritorial income taxes and in overall expenditure levels. The NIT design produces far more losers than winners, particularly among families without children, and only slightly reduces the incidence of low income. However, it is affordable without additional tax rate increases and significantly reduces the depth of poverty. Both options would probably have net negative effects on labour supply except for current social assistance recipients. The results seem disappointing. The significant disruption associated with implementing any of these designs would make it difficult to advance the GAI as the centrepiece of social security reform. The bottom line is that both these models are too expensive. In the UD approach, the additional cost is clear: 93 billion in additional personal income taxes is required. In the NIT, the expense is less clear because the option was designed to fit existing fiscal parameters. The result was a large number of losing families, many at low income levels. Fixing this problem would require billions of dollars, although not on the scale required for the UD. For example, an increase to the adult benefit of 500 would cost an additional 6 billion under the NIT. Why then are GAIs so expensive A GAI, by its very nature, and in the context of the current Canadian income distribution, provides more benefits to more people than existing systems of social support. To provide a reasonable level of income support, i. e. an adequate guarantee, and a low reduction rate to ensure an incentive to work, most working poor and middle income families become eligible to receive the benefits. The lower the reduction rate on the GAI benefit, the higher up the income scale the benefit goes and the more people are included. At the limit, the reduction rate falls to zero, the entire population benefits and costs soar, which is what happens under the UD model. Moreover, unlike the programs it replaces, a GAI is non-stigmatizing and easier to understand. Families who are eligible for existing benefits but either do not realize it or do not want to apply, are assumed to benefit from the GAI. A final reason is that the GAI provides coverage to groups currently not covered by many social programs such as adult children living with their parents and the self-employed. The question is how to pay for these additional benefits. The NIT tried shuffling income among different parts of the population. The UD resorted to large tax increases. The consequences of both approaches have been documented. The trade-offs are very strict: no surplus funds arise as the result of the consolidation and simplification of programs that could be used to improve the system. What could the sources of this surplus be Any excessively high benefits that some may have in the existing system from dipping into several programs at the same time are eliminated and this does not provide a significant source of new funds. Administrative savings could be possible in the UD design due to the elimination of social assistance but this would be very small compared to the cost of the program. As for the NIT, running a responsive benefit for a much larger population could actually result in increased administrative costs. The main potential source of surplus would be an increase in labour supply, leading to both lower poverty levels and lower benefit payouts. But, as discussed in the previous section, even if labour supply might increase for particular groups, the overall effect on labour supply is more likely to be negative than positive. These results must also be viewed in the context of what a GAI does not do and what it could prevent if it absorbs the financial resources and overextends the capacity of the population to accept major change, i. e. measures to expand economic growth and employment, to increase the employability of persons with inadequate earnings, to provide required supports for persons with disabilities to function in society and in the labour force, to promote a better balance between work and family responsibilities or to fund preventive measures in areas such as child development and school-to-work transitions. However, this does not mean that for more limited purposes, GAI mechanisms may not have value. The final section of the paper examines recent initiatives and proposals that merit further attention. If a GAI, whether based on an anti-poverty or an economic adjustment vision, appears to offer too much disruption and insufficient benefits, is there still a useful role for GAI mechanisms in social security reform Before examining this issue, it is important to remember that some of the ideas underlying a GAI and the mechanisms for implementing it have already had a major impact on Canadian income security programs. As noted earlier, the level of benefits and the taxback structure of the current Ontario social assistance system are remarkably similar to those in the 1971 Special Senate Committee on Poverty proposal. The Child Tax Benefit and the GST Credit are significant negative income tax programs - the first restricted to families with dependent children and the second available to all adult tax filers. And, of course, the combination of the Old Age Pension, the Guaranteed Income Supplement and provincial territorial supplements for seniors provide a GAI for Canadians over age 65. Provincialterritorial and municipal social assistance programs, combined with the GST Credit, the Child Tax Benefit and certain provincialterritorial benefits available to low income persons do provide minimum last resort incomes to persons under age 65. However, benefit levels vary widely, work disincentives remain substantial, a stigma is still attached to the receipt of social assistance, and there is a lack of coherence between social assistance and programs such as Unemployment Insurance. Further, the depth and incidence of poverty in Canada remains too high whatever the definition used. Making Work Pay A central dilemma facing a GAI continues to be the old principle of lesser eligibility. How generous a guaranteed income can the state provide compared to what is available for doing low wage work The stronger the demand for labour at wages adequate for the needs of individuals and families, the less the risk of providing more generous income guarantees. However, even in tight labour markets, as in Ontario in the late 1980s, higher real social assistance benefits helped keep caseload levels from falling as those benefits approached or exceeded entry-level wages available to such groups as lone parents with young children. Lower reduction rates on earned income, often advanced as a way to reduce work disincentives for people on social assistance, can instead lead some people into a situation where they supplement social assistance with part-time or part-year work or vice versa instead of moving off dependence on social assistance into year-round full-time employment and progressing up the job and wage ladder from that position. Further, lower reduction rates can lead to rising caseloads as the program covers a greater proportion of the population. There appears to be a need for some mechanism to encourage people now unemployed andor on social assistance to take entry-level, low-paying jobs. Encouraging this first step on the wage ladder by providing a living standard at least equal to what people would have been receiving on social assistance, is considered a major objective of policy. This has led to the development of strategies to provide support and supplementation to people in low-wage jobs relative to their needs and those of their families, i. e. to make work pay. As with the two visions of a GAI outlined in this paper, fighting poverty while reducing the work disincentives embodied in public programs remain important goals. But to these goals has been added a concern to improve the conditions surrounding low-wage work in order to make working more attractive, i. e. making work pay. Recent strategies to achieve this goal vary widely. Some are not yet off the drawing board, others are in the experimental phase and still others are operating on a provincialterritorial and national scale in Canada and the United States. While those discussed below involve various forms of income support based on NIT-type mechanisms, one important strategy to make work pay is the provision of ample opportunities for learning, education and training. Increasing the human capital of persons stuck in low wage jobs has a double effect. It enables them to compete for more skilled and better-paying jobs and it opens up their former positions to persons who previously were unemployed or working on only a sporadic basis. Replacing Parts of Social Assistance Short of replacing social assistance with a comprehensive GAI, some policy makers have proposed replacing social assistance benefits for specific groups with NIT-type programs which would also be available to low income working persons not receiving social assistance. In 1988, the Ontario Social Assistance Reform Commission (SARC) recommended that national income-tested programs be created for persons with disabilities and parents of dependent children which would replace social assistance benefits for these groups. In 1993, as part of a general reform of Ontario social assistance, that provinces Ministry of Community, Family and Childrens Services proposed to replace the childrens component of social assistance benefits with an income-tested benefit for all low income parents of dependent children, not just those receiving social assistance. (Government of Ontario, Ministry of Community, Family and Childrens Services, Turning Point, 1993, pp. 16-18.) This would enable the province to link adult social assistance benefits to what could be earned at a full-time, year-round minimum wage job, avoiding the current situation where total adult and child social assistance benefits significantly exceed this level of earnings. Because many more families would qualify for benefits under this proposed Ontario Child Income Program (OCIP) and since it was not eligible for federal cost-sharing under current Canada Assistance Plan rules, (it was an income-tested rather than needs-tested benefit) the additional cost of OCIP made it impossible for the Ontario government to implement the proposal. However, it would have had a significant positive impact on making work pay. Earnings would exceed social assistance benefits at much lower wage levels for families with children and, instead of being taxed back at a rate of 75 percent on net earnings, childrens benefits would be reduced at a much lower rate and be received over a broader income range, substantially reducing the financial disincentive to earn. The means of achieving this two-pronged attack would be a provincial income supplement for families with children designed, like the federal Child Tax Benefit, as a form of NIT. The idea of replacing social assistance benefits paid on behalf of children by an integrated federal - provincial child benefit is discussed further in the background paper, Income Security for Children. Earnings Supplementation The Government of Canada, the federal government in the United States and the Quebec government have taken a more direct approach to making work pay by directly supplementing the earnings of the low income working population. In Canada, a Work Income Supplement of up to 500 is added to the Child Tax Benefit for families earning between 3,750 and 25,921 annually. This supplement is designed as a modest step toward making work pay. About 700,000 families qualify for the supplement. In the United States, such supplements are paid through the mechanism of an Earned Income Tax Credit delivered through the personal income tax system. It is the goal of the U. S. government to enrich the credits to the point where, added to year-round full-time work paying the federal minimum wage, they would exceed the official American poverty lines for families of four or fewer persons. The credit is available to single adults and childless couples as well as to parents with dependent children and represents varying percentages of family earned income (up to a maximum) depending on the presence and number of children up to two. It is taxed back based on family income. Quebec has a somewhat different version of earnings supplementation under its Parental Wage Assistance (PWA) program which is available only to low income workers with children. This program not only supplements the earnings of low income parents (once a minimum monthly earnings threshold is exceeded), but also partly reimburses actual child care and provides a special shelter benefit up to levels where earnings, combined with the supplements, provide an income which is at least comparable to social assistance. Moreover, the Quebec personal income tax system has been adjusted so that all households with incomes below what they could receive on social assistance pay no provincial income taxes. Thus, the PWA program is a true NIT - at least so far as Quebec provincial income taxes are concerned. However, in an attempt to make the program responsive to income and earning fluctuations during the year, PWA benefits are not paid automatically and must be applied for directly. Consequently, many parents whose earning levels would qualify them for benefits do not apply and the program reaches only a fraction of the intended target group. Newfoundland ISP Proposal An even more ambitious program, combining NIT features with an earnings supplement, was proposed in 1993 by the Newfoundland Economic Recovery Commission with the support of the Government of Newfoundland and Labrador. The Income Supplementation Program (ISP) is designed to provide a minimum level of income security and improved incentives to earn income. At the same time, the Unemployment Insurance system in Newfoundland and Labrador would be substantially scaled back by increasing the number of weeks of work needed to qualify for benefits and reducing the maximum number of weeks that benefits could be collected. The intent is to change radically the incentive structure of the income security system from one which encourages working just long enough at the highest wages possible to maximize UI benefits, to one which rewards maximizing ones weeks of employment even at low wages. The ISP would provide a base income guarantee, scaled by family size and composition, at levels roughly equal to those of current social assistance benefits. In addition, earnings would be supplemented up to a maximum. For higher family incomes, both the base income guarantee and the supplement would be reduced. As stated earlier, since the scheme is designed to maximize self-sufficiency through earnings, the guarantee level provided falls short of commonly used measures of adequacy. The hope is that by putting a floor under incomes and supplementing earnings in addition to that floor, Newfoundlanders will seek out opportunities to earn while having a non-stigmatizing, secure source of income. Implementing an ISP would be quite a challenge, and many practical aspects would have to be worked out to see if it could be feasible. Because of the high current levels of UI expenditure in Newfoundland and Labrador, the Economic Recovery Commission believes that this modest comprehensive GAI with a second tier of income-tested earnings supplementation can be paid for out of UI savings and by replacing the provincial social assistance system without taxation or deficit increases. It is unlikely that this would be the case elsewhere in Canada as the analysis of the NIT design in this paper indicates. Conclusion All three of these targeted GAI-type programs - an integrated income-tested federal - provincialterritorial child benefit, earnings supplementation and a combination of a base income GAI with earnings supplementation - merit further consideration. Each addresses the largely unmet income security needs of the working poor in a much more direct and targeted way than the current system. Each can be designed to reduce the incidence and depth of poverty among this group in a manner that is more acceptable than comprehensive GAI designs such as those analyzed in the previous section. These approaches are not without flaws. An enriched integrated income-tested child benefit could be costly. Earnings supplementation, unless carefully designed, could lead to an increase in the proportion of jobs paying low wages. The Newfoundland ISP proposal would require major tax increases andor many middle income losers to finance in other provinces and territories. It also faces considerable delivery and administrative challenges. However, while the arithmetic of current Canadian income distribution makes achievement of a comprehensive GAI appear either politically or fiscally out of the question, the problems inherent in these more targeted approaches can seemingly be resolved through practical, acceptable remedies. Moreover, while directly improving the standard of living of their target populations, they would do so while encouraging rather than dampening incentives to become more self-sufficient through earnings. Appendix A - Historical Background The First GAI - Speenhamland A precursor of a guaranteed annual income can actually be traced back to late 18th century England. The first known GAI was the Speenhamland system implemented from 1795 to 1834 in parts of England where wages had fallen below subsistence levels. The Elizabethan Poor Law had provided relief only to those who were unable to work or could not find work. The Speenhamland system provided a subsidy, in addition to wages, that was scaled according to the price of bread and family size. This income floor was provided regardless of work effort. But the subsidy was reduced at a 100 percent rate once earnings exceeded the income floor. Since the system was financed by poor rates levied in the village parishes, it gave manufacturers in nearby towns not subject to those rates, an incentive to hire workers only for periods when they were most needed. At the same time, by meeting the subsistence needs of families, regardless of whether they worked or not, and offering no incentive for able-bodied workers to take work paying wages less than the Speenhamland rates, the system came to be seen as undermining the work-ethic. The Poor Law Commission, which reported in 1832, concluded that the only way to correct these abuses was to ensure that public relief should not pay those able to work benefits that were higher than the worst jobs society had to offer. This became known as the principle of less eligibility. This principle was quickly transferred to Canada and remained the key assumption behind social assistance policy in Canada well into the 20th century. While social assistance rates are now tied to an assessment of basic need rather than to the lowest wage rates in society, the principle of less eligibility is still reflected in the widespread view that people should not be better off on social assistance than they would be working full time at a minimum wage job. The Speenhamland experiment is also a lesson in the unintended effects of government policy. By enabling employers to hold down wages and still retain a supply of reasonably healthy workers, and allowing them to evade the costs of providing for those workers and their families, a humane attempt to help the working poor resulted in drawing an increasing number of workers and their families into that situation. At the same time, by taxing back assistance at a rate of 100 percent on the earnings of workers who became employed, it provided no financial incentive to work at wages less than the subsistence level. The attempt to put a floor under the incomes of the poor did maintain a subsistence standard of living, but increased the numbers of those applying for assistance and living at the subsistence level. The Canadian Context - Social Minimum without a GAI In 1943, Leonard Marsh, a Canadian public servant inspired by the plan for a postwar welfare state advanced by Lord Beveridge in the United Kingdom, introduced the notion of a comprehensive, integrated social security system to protect Canadians against the economic insecurities of work and raising a family. Like the Beveridge Plan, this approach was based on the idea of a social minimum. The income security aspect of this social minimum was to consist of the following three tiers: - social insurance programs for such target groups as the unemployed, the sick, the disabled and those retired from work on scales adequate to meet the minimum needs of a single individual or a married couple - universal family allowances payable to the parents of all children, regardless of parental income, to meet the minimum maintenance costs of a child and - means-tested social assistance for those exceptional cases not covered by social insurance. Marshs concept of a comprehensive social minimum assumed policies to ensure high levels of employment. He emphasized that the first positive measure in providing social security. is a program which will make work available, or in other words, which will offer wages rather than subsistence maintenance to the furthest extent to which it is possible. (Cited in Social Planning Council of Metropolitan Toronto, A Guaranteed Income: A New Look at an Old Idea (Toronto, 1986), p. 17.) Marshs proposed social minimum was never fully realized, but it provided the framework for much of Canadas current social security system. In such a system there was assumed to be no need for a GAI. Income security was to be provided largely through insurance programs. Employment was to be widely available and wages from work, with a floor provided by minimum wage laws in combination with family allowances, would ensure adequacy for working families. While social assistance would provide a minimum income floor, it was to be only for cases of exceptional need, primarily those not expected or able to work because of age, child-rearing responsibilities or severe physical or mental disabilities. The Revival of Guaranteed Income Concepts in the 1960s The ability of a low-unemployment economy, supplemented by social insurance, to eradicate poverty began to be challenged in the early 1960s. This was a time of high economic growth and low unemployment in most western countries. Books, such as Michael Harringtons The Other America in the United States and Richard Titmusss Income Distribution and Social Change in the United Kingdom, (Michael Harrington, The Other America Poverty in the United States (New York: Macmillan, 1962) and Richard M. Titmuss, Income Distribution and Social Change (London: George Allen and Unwin, 1962)), were pointing out that postwar prosperity and existing social insurance and social assistance programs had left large portions of society still in poverty. In part, this reflected inadequate provision for the income needs of groups not able or expected to work such as the elderly and persons with disabilities. However, the population in poverty also included large numbers of households whose head was working for wages at least part-time or for part of the year. Despite low unemployment and high economic growth, social assistance caseloads also began to rise in major cities in the United States at this time. Canada shared in this rediscovery of poverty. In fact, the first attempts to define statistically and measure the incidence and depth of low income in Canada through Statistics Canadas low income cut-offs (LICOs) date from this period. Poverty came to be seen primarily as inadequate income. Anti-poverty strategies began to focus on income maintenance and support programs while the redress of macroeconomic causes of poverty such as inadequate levels of full-time, year-round employment, assumed less importance. With this new perspective, a low debt and rising tax revenues generated by rapid economic growth and rising income levels, a guaranteed income began to seem, to many Canadians, an attractive and simple mechanism to deal with the problem of poverty. The initial response, however, was not an attempt to design a GAI, but efforts to finish the agenda established by Marsh. This led to the introduction of the earnings-related Canada and Quebec pension plans in the mid 1960s, the gradual reduction of the age of eligibility for the Old Age Pension from 70 to 65 in the late 1960s, the creation of the Canada Assistance Plan in 1966 to encourage a rationalization of provincialterritorial social assistance systems and the major expansion of the Unemployment Insurance program in 1971. But it was recognized that enriching social insurance and demogrant programs alone could not provide all Canadians with incomes above low income thresholds. Many people were poor because they did not have sufficient attachment to the labour force to benefit from social insurance, their labour force earnings were insufficient or they had not been able to save enough or establish pension entitlements large enough during their working years to provide for an adequate income in retirement. Many Canadian policy analysts conceived of the GAI as a reform to the third tier of Leonard Marshs integrated approach. Social assistance at the provincialterritorial level by the 1960s had become a maze of categorical programs for lone parents, the blind, the long term unemployed and the disabled that carried considerable stigma. Some were cost-shared by the federal government. Others were not. There was also a growing recognition of the social assistance systems tendency to trap people in dependency due to its asset tests and punitive tax rates on earned income. The way forward seemed to be to maintain the social insurance programs and the universal demogrants for children and seniors while providing a new income-tested income support tier to replace social assistance and provide incentives to work and save for retirement. The negative income tax appeared to be a workable model for putting these ideas into effect. This agenda proceeded for seniors. The Guaranteed Income Supplement was added to the Old Age Pension to create a GAI for seniors. The result, combined with the expansion of eligibility for the Old Age Pension and the creation of the Canada and Quebec pension plans virtually removed seniors from social assistance and led to a marked reduction in poverty among those over age 65. There was little resistance to a GAI for seniors because it was built on top of universal social insurance programs (rather than replacing them) and, for this group, there were few concerns about work-disincentives. In fact, with the baby boom generation just beginning to enter the labour force in large numbers there seemed good reason to encourage people to leave the paid work force at age 65 and open up opportunities for younger workers. Some have proposed that a GAI for persons with disabilities could proceed on the same basis, although there is much concern that such an approach could result in the marginalization of persons with disabilities rather than their inclusion into the social and economic mainstream. The same agenda, however, did not proceed in the same way for the rest of the population. Nonetheless, an important step was taken. The creation of the Canada Assistance Plan in 1966 provided federal cost-sharing to encourage the provinces and territories to establish comprehensive social assistance programs available to all simply on the basis of need that were national in scope since residency tests were prohibited. The federal government reimbursed the provinces and territories for 50 percent of the cost of establishing and maintaining social assistance programs that met these requirements. Wide interprovincial variations remained in the level of income guaranteed under provincialterritorial social assistance programs, and guarantee levels also varied within provinces depending on household type and the presence of physical or mental disabilities. Moreover, as social assistance was still subject to an intrusive means test which included assets as well as income, it continued to carry a stigma not attached to social insurance programs such as Unemployment Insurance or income-tested programs such as the Guaranteed Income Supplement for the elderly. Nevertheless, the Canada Assistance Plan was a watershed in Canadas Unique Social Historyboth in terms of federal - provincial territorial cooperation and the impact it had on building a modem and comprehensive last-resort safety net. By including all Canadians in the safety net, the stage was set for what many hoped would be the next step - a comprehensive GAI. Serious consideration of a GAI quickly followed in the early 1970s. The Early Seventies - Failure to Implement a GAI Not only in Canada, but internationally, the late 1960s and the early 1970s were the glory years for comprehensive guaranteed income proposals, particularly those based on mechanisms inspired by the negative income tax. In the five years following President Nixons 1969 proposal for a guaranteed income for families with children in the United States, the so-called Family Assistance Plan, no fewer than 10 other countries, from Norway to New Zealand, seriously considered comprehensive reform of their income support programs based on guaranteed income principles. Except for highly targeted categories of individuals, none of these schemes were implemented. (See Leslie Lenkowsky, Politics, Economics and Welfare Reform: The Failure of the Negative Income Tax in Britain and the United States (Lanham, Md: University Press of America, 1986) pp. 3-6.) Canada followed this pattern but in three separate initiatives. The Quebec Commission of Inquiry on Health and Social Welfare The first official proposal for a comprehensive GAI in Canada was made in 1971, by a Quebec provincial commission (the Castonguay-Nepveu Commission) which proposed a three-tiered income security program for Quebec. A basic negative income tax would comprise the first tier, social insurance programs the second, with income-tested family allowances providing the third. The negative income tax program, called the General Social Allowances Plan (GSAP), would replace Quebec social assistance with two tiers of benefits: one for persons deemed to be employable and a second for those deemed not to be employable. The benefit levels for the first tier would be set at 60 percent those of the second, under the assumption that these would be supplemented by earnings from employment. This design was intended to provide an incentive to work that was consistent with the principle of less eligibility. A Comprehensive GAI - The Special Senate Committee on Poverty Later in the same year, the Special Senate Committee on Poverty, under the leadership of Senator David Croll, took a different approach, with a proposal for a uniform guaranteed income through a federal negative income tax program to cover most Canadian families living in need. No distinction in benefit or reduction levels was to be made between persons deemed to be employable and those unable or not expected to work. The main elements of the Senate Committees proposal were: - benefit levels would be set at 70 percent of poverty levels defined by the Senate Committee and would be reduced at a rate of 70 percent against other income - non-Canadians and single unattached Canadians under 40 years of age would not initially qualify for GAI benefits because the appropriate solution for this group. lies not in income maintenance but in opportunity programs - education, training, counselling and job placement (Special Senate Committee on Poverty, Poverty iii Canada (Ottawa: Queens Printer, 197 1 ) p. 187.) - family allowances, youth allowances and Old Age Security would be abolished (in effect, these programs would be converted from universal demogrant programs to selective income-tested programs.) - the federal government would assume the full cost of all social assistance payments made under the Canada Assistance Plan by the provinces and territories, to provide for those not covered by the GAI - social insurance programs, such as UI and CPP, would continue but be reconstructed as true insurance schemes and withdrawn from the welfare field entirely ( Ibid. p. 184.) and - the GAI would be integrated with the tax system by a mechanism to offset any income taxes payable by a household with an income below the poverty lines with a tax credit of an equal amount. The personal income tax system would be reformed to place the payment of taxes on an economic family rather than on an individual basis. Every couple with children and every person over 40 years of age would be guaranteed an income level equal to at least 70 percent of the poverty level in the first year of implementation. A social assistance system wholly funded by the federal government would provide for the needs of non-citizens and singles under 40 years of age. The estimated cost for the year 1967 was 645 million or about one percent of GNP more than existing program outlays. The guaranteed income provided was 3,500 for a family of four or the equivalent of 15,200 in 1993, adjusting for inflation. The Senate Committees poverty line, however, was designed to be indexed, not to inflation, but to average living standards. In addition to the large incremental cost, equivalent to over 7 billion in 1993, other objections were raised to this proposal. It did not provide strong incentives to work. For every dollar of earnings by poor families and older individuals, GAI benefits would be reduced at a rate of 70 cents. (In the most generous provinces current reduction rates for social assistance are 75 percent - slightly above the Senate proposal.) The cumulative effect would be that employable recipients could not increase their disposable incomes significantly through work until their earnings were well above the guarantee level. It was no simpler than the system in place. By eliminating two benefit programs for sub-populations and replacing them with a much larger guarantee payment for a broader category of households, a larger number of cheques would have to be delivered than before. Moreover, more people would have to file income tax returns to indicate their entitlement to benefits. The expansion of the Canada Assistance Plan to cover those persons who would be excluded from the GAI would complicate matters even further. While the Croll proposal set a framework for a made-in-Canada GAI and remains the classic expression of a GAI aimed at guaranteeing an adequate income level, the problems associated with it prevented serious consideration by governments at the time. The Social Security Review of the 1970s In 1973, the federal government published its Working Paper on Social Security in Canada (the Orange Paper), which became the basis for the federal - provincial social security review of the 1970s. The review was established in part to develop a social security program to combat poverty by ensuring an acceptable minimum income for all Canadians. After consideration of a number of options by federal - provincial working groups, the federal government proposed, in February 1976, a form of GAI inspired by the two-tiered system of Castonguay-Nepveu. The provinces and territories would administer both an income support program for those without income from employment and an income supplementation program for the working poor. The federal government would pay two thirds of the cost of income supplementation, two thirds of that part of support payments equivalent to the maximum provincialterritorial supplementation benefit eligible for federal cost-sharing and half of the remainder. The levels of the support and supplementation guarantees were to be established by the provinces and territories. However, the maximum level of income supplementation benefits eligible for federal cost-sharing was set at 80 a month or 960 a year for a family of four in 1975 dollars (2,830 in 1993 dollars). Eligibility for income supplementation would be restricted to families with dependent children and to individuals and childless couples aged 55 to 64. Both of these components were designed to motivate persons to work, with a 70 percent benefit reduction rate for income support and a 35 percent reduction rate for income supplementation. The income security system for those over age 65 was to be left unchanged. (National Council of Welfare, Guide to the Guaranteed Income (Ottawa: March 1976) pp. 37-39.) An analysis by the National Council of Welfare estimated that almost 450,000 households containing 1,600,000 people could benefit from income supplementation but stated: There can be no denying that the proposed supplementation program will not lift most of these families out of poverty. The benefit levels are too low to accomplish this. (National Council of Welfare, Support supplementation: who will benefit (Ottawa: November 1976) p. 32.) The February 1976 proposals were not accepted by the provinces because of fears about their short and long-term costs in a context of high inflation, recent sharp increases in the federal deficit and a marked slowdown in the growth rate of real government revenues. While the federal - provincial social security review was considering the design of a GAI in the early 1970s, the province of Manitoba, with financial support from the federal government, chose to go one step further by actually piloting the concept. The Manitoba Basic Annual Income Experiment (Mincome) made payments to over 1,000 Manitoba families over three years, beginning in 1975. The experiment was designed to evaluate work responses of employable recipients under a guaranteed income. Analysis of the work incentive impacts of the program were consistent with the results of similar experiments in the United States, i. e. labour market participation did not increase as might have been hoped. In fact, it declined, but only slightly overall with most of the reduction coming from the lower earner in two-earner couples. Whether this is a success depends on what is expected from a GAI. If the focus is on poverty, this result can be interpreted positively, i. e. benefits can be increased without major changes in work patterns. If the focus is adjustment, the fact that simplification and theoretical reduction of work disincentives did not increase labour supply would seem to be a disappointment. (Derek Hum and Wayne Simpson, Income Maintenance, Work Efforts and the Canadian Mincome Experiment (Ottawa: Supply and Services Canada, 1991)). Finally, it is noteworthy that the level of income guarantees provided by Mincome, in 1993 dollars, are below current social assistance levels in that province. Therefore, the Mincome study tells us little about the potential work disincentive effects of a more adequate GAI. Late Seventies and Early Eighties - The Shift to Incrementalism Following the collapse of the Orange Paper process in 1976, reform to income security programs in Canada shifted its focus from comprehensive to incremental change. New programs based on the GAI idea, such as the refundable Child Tax Credit and the refundable Sales Tax Credit at the federal level and various supplements at the provincial level, aimed to improve, modestly, the situation of low-income households, particularly families with dependent children. However, these programs were additions to the current system and did not consolidate existing income support programs. Moreover, they made no pretence that the income guarantees they provided were in any sense adequate. The result was to multiply significantly the number of programs available and to create considerable overlap between federal and provincialterritorial programs in the area of income maintenance and among income maintenance programs within levels of government. Unlike the de facto GAI for seniors, these programs usually did not provide high enough benefits to remove families from social assistance. (The APPORT program in Quebec, which supplements the earnings of the working poor is an exception to this generalization since it is designed to complement the social assistance system.) On the other hand, the introduction of refundable credits provided much legitimacy to the negative income tax mechanism for delivering benefits to poor Canadians. Many considered these credits as a step toward a GAI. The Mid-Eighties to the Present - The GAI Revived A new generation of GAI proposals emerged in the mid 1980s. The most prominent of these was the Universal Income Security Plan (UISP) in the 1985 report of the Royal Commission on the Economic Union and Development Prospects for Canada. Also, in the late 1980s Quebec and Ontario made major, but very different reforms to their income security systems which addressed the issues of adequacy, supplementation of the incomes of working poor families and work incentives raised by earlier GAI proposals. Quebec White Paper on the Personal Tax and Transfer System (1984) The reforms in Quebec were inspired both by the Castonguay-Nepveu Commission of the early 1970s and by a white paper on the provincial personal income tax and income support system published in 1984 which laid great emphasis on the very high marginal tax rates faced by the poor as they attempted to make the transition from social assistance to work. (Quebec, Department of Finance, White Paper on the Personal Tax and Transfer Systems (Quebec: 1984).) It also stressed the need to harmonize the income tax and income transfer systems so households with incomes below social assistance rates would not have to pay income tax. To do this, it proposed using common definitions of the family unit and of income in both systems and indexing each to inflation in the same way. The Universal Income Security Plan (UISP) (1985) The proposal of the UISP by the Royal Commission on the Economic Union and Development Prospects for Canada (the Macdonald Commission) marked a number of departures in thinking about a GAI and its relationship to social insurance programs such as Unemployment Insurance. While past GAI proposals had attempted to improve the standard of living of the poor while seeking to minimize work disincentives, the UISP was consciously designed to provide an income floor which would make it politically and socially acceptable to embark on what would otherwise be controversial economic adjustment policies, including a significant scaling back of the Unemployment Insurance system, an expansion of adjustment programs, such as job training and mobility assistance, and the signing of a free trade agreement with the United States. This was an attempt to convert what had been a passive policy tool into a foundation for active measures designed to improve economic competitiveness. Previous GAI proposals (with the partial exception of the 1971 report of the Special Senate Committee on Poverty) had assumed that Unemployment Insurance would remain in place. However, anticipating the conclusions of the Newfoundland and federal royal commissions on Unemployment Insurance which would report a year later, the Macdonald Commission saw many aspects of the Unemployment Insurance system, particularly regionally extended benefits, as crossing the boundary between social insurance and income supplementation. (Newfoundland, Building on our Strengths: Report of the Royal Commission on Employment and Unemployment (the House Report) (St. Johns: 1986) and Canada, Commission of Inquiry on Unemployment Insurance (the Forget Report) (Ottawa: 1986).) To restore the UI program to its social insurance roots, the Commission recommended stripping UI of its income support elements and replacing them with an explicit, income-tested supplementation program with benefits related to family size. Concerned as it was with promoting economic adjustment, the Macdonald Commission deliberately made its UISP inadequate both in terms of commonly used measures of low income and existing social assistance levels in many provinces. Moreover, to avoid work disincentives it proposed to tax back benefits at a low rate of 20 percent. The UISP also attempted to disentangle the roles of the federal and provincialterritorial governments in the income security system. In contrast to the proposal emerging from the social security review of the 1970s, the federal government would be 100 percent responsible for the administration and financing of income supplementation for those with earnings as well as for providing an income base for the non-earning poor. This would leave the provinces 100 percent responsible for the financing and administration of a support tier which would top up the UISP to ensure that persons on social assistance would be no worse off than under the current system. The UISP was designed to replace: - the three existing child benefits - the spousal and equivalent to married exemptions in the income tax system - the Guaranteed Income Supplement and Spouses Allowance for the elderly - federal contributions to provincialterritorial social assistance programs and - federal housing programs. The UISP would provide full benefits to all families and to unattached individuals over age 35. The annual benefit level for a couple with two children would be about 10,000 in 1993 dollars, and would be indexed to growth in the Consumer Price Index. The Macdonald proposal had many attractive features which improved on previous GAI scenarios. It provided for a streamlining of federal programs through eliminations and tax simplifications - one program would now stand where several had previously been. It also provided a more rational system of income supplementation to the working poor than Unemployment Insurance and recognized an obligation by government to assist those families whose earnings did not provide them with an adequate income. The program was also intended to be fiscally neutral. Dollars saved from programs eliminated would be redeployed into the UISP. However, one independent estimate put the incremental cost of the program, as designed, at an additional 3 billion to 5 billion in 1985. (See Michael Wolfson, A Guaranteed Income, Policy Options (January, 1986) p. 37. Wolfson estimated the proposal could be made fiscally neutral by raising the reduction rate to 25 percent.) However, the UISP disappointed many advocates of the GAI concept because it did not promise to reduce substantially either the incidence or the depth of poverty. Combining GAI and Tax Reform The program design of UISP also failed to recognize that because the reduction rate of the benefit program was added to the existing income tax system, the cumulative marginal tax rates and work disincentive effects would be far more severe than intended. With a basic benefit for a family of four of approximately 10,000 in 1993 dollars and a reduction rate of 20 percent, the UISP would provide net benefits to families with income from other sources up to 50,000. (Not all these families would be better off than under the current system because they would lose their Child Tax Benefit and might have to pay higher taxes because of the elimination of the married exemption.) However, adding that 20 percent reduction rate on top of current federal and provincialterritorial marginal income tax rates would mean a 45 percent effective marginal tax rate for those earning up to 30,000 a year and a 59 percent effective marginal tax rate for those earning between this level and the 50,000 threshold. In 1986, to avoid this problem and to attempt to provide income guarantees which were more adequate, Michael Wolfson, an economist at Statistics Canada, proposed a version of the GAI which, while retaining the disentanglement of federal - provincialterritorial roles in income security proposed in the UISP, involved a profound reform of the personal income tax system to complement the base federal income guarantee. The most radical version of this Guaranteed IncomeSimplified Tax (GIST) model would have abolished all federal child benefits, the Guaranteed Income Supplement for seniors, federal cost-sharing of provincialterritorial social assistance spending under the Canada Assistance Plan and the refundable GST Credit, reduced spending on Unemployment Insurance by 30 percent and made the basic Old Age Pension non-taxable. Within the tax system, it would have abolished the basic personal credit, the spousal and equivalent to married credit, the age and pension income credits and Unemployment Insurance premiums. All these would be replaced by a federal basic income guarantee of 7,200 for a family of four headed by a person under age 65 and guarantees of 4,220 for seniors living alone and 7,000 for senior couples. (The guarantee levels for seniors were designed to mimic the existing GIS benefit structure for this age group.) The guarantees would not be taxed back so, in this respect, the design resembles the universal demogrant approach described in the introduction. This means that, unlike the negative income tax design of the Croll Committee under which families with children at income levels above the point where no benefit is paid would have the same disposable income as families without children and the same pretax income, the GIST design provided for horizontal equity between families with and without children at all income levels. (Families with children and high incomes would probably pay more in additional taxes than the benefits they would receive on behalf of their children under GIST but their net additional tax burden would be lower than for families without dependent children possessing the same pretax income. Added to this would be a flat-tax personal income tax system which would tax all personal net income at a basic rate of 29.5 percent with a surtax of 16.5 percent on total income in excess of 40,000. (Net income is total personal income from sources other than the guarantee after subtracting income spent on the remaining deductions in the tax system such as for charitable donations, pension contributions and child care expenses.) Men and women would be treated as individuals within married couples in the tax system. With a constraint of fiscal neutrality, Wolfson argued that provinces and territories could afford to top up the federal guarantees for persons not earning income because of disability, lone parenthood or high local unemployment rates. This income support tier which would be wholly financed by the provinces and territories would be set at 3,000 a year for each adult aged 18 to 64 and at 1,500 for each child under age 18. This benefit would be taxed back at a rate of 40 percent. This support tier would replace existing social assistance benefits. Families of four qualifying for maximum support and supplementation benefits would have a combined guaranteed income of 16,200 in 1986 dollars or just over 21,500 in 1993 dollars. This would still be over 5,000 below the weighted average Statistics Canada low income cut-off for a family of four in 1993 (And below the income available to a family of four on social assistance in Ontario in 1993. See National Council of Welfare, Welfare Incomes 1993 (Ottawa: Summer 1994) p. 30.) and would be available only to families with no other income. The basic federal income floor for families of four would equal about 9,500 in 1993 dollars. The GIST proposal is the most comprehensive Canadian version of the universal demogrant type of GAI, although unlike the classic universal demogrant, it has separate supplementation and support tiers, with the support tier being a form of negative income tax. Social Assistance Reform While the federal government chose not to pursue either the UISP or the GIST proposals, Canadas two most populous provinces - Ontario and Quebec - moved in the late 1980s to reform their social assistance systems in ways resembling much earlier GAI proposals. In Ontario, reforms moved in a direction similar to that proposed by the Croll report, i. e. higher benefit guarantees and reduced tax rates on earned income. Between 1986 and 1993, real social assistance benefits in the province increased by approximately 25 percent. By 1993 the income available to families with children on social assistance stood at between 72 percent and 82 percent of Statistics Canadas low income cut-offs (these are the 1992 base low income cut-offs. The National Council of Welfare used the 1986 base cut-offs.) in urban areas of Ontario with populations of 500,000 or more, and between 82 percent and 95 percent of the cut-offs for families with children living in less densely populated areas of the province. ( Ibid p. 27. The lower figure in the range is for a married couple with two children. The upper figure is for a lone parent with one child.) The adequacy of benefits for single persons with disabilities was increased to similar percentages of the low income cut-offs. During the same period the taxback rate on non-social assistance net income was lowered to 75 percent. (Net income is income after deducting income and payroll taxes and child care and work-related expenses up to a fixed limit. Persons receiving social assistance in Ontario and other provinces are also permitted to earn small amounts of income a month before the 75 percent taxback rate is applied.) Previously, much higher rates had been levied on non-social assistance gross income. These guarantee and taxback levels are very similar to those proposed by the Croll Committee in 1971 (70 percent of the poverty line with a 70 percent taxback rate.) In Quebec, equally significant changes were made to the income security system in the late 1980s, but were less focused on benefit adequacy and more on harmonization between taxes and transfer payments and improved work and employability incentives. Quebec did not significantly increase its real social assistance rates for families with children. Instead, it roughly indexed them to inflation at levels between 50 percent and 60 percent of the low income cut-offs. However, the provincial income tax system was changed so households with incomes lower than what they would receive on social assistance were not subject to provincial income tax. Payments to parents of newborn children were introduced, and the universal provincial family allowance for families with children was enriched. Social assistance benefits, among those deemed able and expected to work, were set at higher levels for those willing to participate in active programs to improve their employability (and for those actually doing so) than for those unwilling to participate in such programs. And a new income-tested earnings supplementation program, APPORT, was introduced to supplement the earnings and reimburse the child care expenses of working poor parents. Policy makers have been motivated by many different and sometimes incompatible objectives in considering a GAI. The main objectives have been to: - provide more money for the poor to contribute to eliminating poverty in society - provide more choice and less stigma. Basic needs would be met without the stigma of needs-tested social welfare or, potentially, the classification of the population into employable and unemployable groups - simplify the current system of programs and services. (Many of these programs and services would be integrated and harmonized into a single benefit that would require a smaller infrastructure to administer and would make it easier for the client to receive government benefits.) - cost less than current programs and services - provide better incentives to work than the current system of taxes and transfers which imposes conditions and limitations on the receipt of benefits and the level of earnings and - allow for a faster and more efficient adjustment process to structural economic change. If all Canadians could be assured of a base income that doesnt penalize work effort, then the willingness and ability to adjust to changing economic circumstances would improve. The historical review of the GAI proposals indicates that although any one of these objectives may be feasible, combining several objectives into the same program requires trading off one objective against the other. Appendix B: Measures of Adequacy (This Appendix deals with selected measures only. For a fuller discussion, including an evaluation of the strengths and weaknesses of the various measures, see Wolfson and Evans, op. cit. ) Relative Measures of Adequacy Low Income Measure In addition to the low-income cut-offs (LICOs) Statistics Canada also publishes the low income measure (LIMs). These represent 50 percent of adjusted median family income where the adjustment reflects a judgment on how much income needs increase with family size and configuration. In calculating the LIMs, it is assumed that each additional adult after the first increases the familys needs by 40 percent while each dependent childs needs are assumed to be 30 percent of those of the first adult. The exception is in the case of a lone parent family where it is assumed the first dependent child adds 40 percent rather than 30 percent to the familys needs. Adjusted family size is then determined by counting the first adult as 1, the second adult or the first child in a lone parent family as 0.4 and all other dependent children as 0.3. Thus, a married couple with two dependent children would have an adjusted family size of 1 plus 0.4 plus 0.3 plus 0.3 equals 2. Adjusted family income is then determined by dividing family income by adjusted family size. The median adjusted family income is the adjusted family income where 50 percent of families have a smaller adjusted family income and 50 percent have a larger one. The LIM for a single person living alone is 50 percent of the median adjusted family income and the LIMs for all other family configurations are equal to this value multiplied by adjusted family size. The LIMs are automatically adjusted each year to reflect changes in median adjusted family income.(Unlike the low income cut-offs the LIMs are not adjusted to take the size of the community in which the family resides into account.) CCSD Poverty Thresholds Another commonly used relative measure of adequacy is the income threshold calculated by the Canadian Council for Social Development (CCSD). It represents 50 percent of average adjusted family income. The CCSD assumes that the first additional person in the household increases the familys needs by two fifths, and each subsequent person adds an additional one third. Since the average size of a census family in Canada is just over three persons, the CCSD sets the poverty threshold for a family of three at 50 percent of average pretax family income. Adjustments are then made for different-sized families on the basis of family income units which are scaled as follows: a family of one equals three income units, a family of two equals five income units, a family of three equals six income units, a family of four seven units and so on. Thus, for example, the poverty threshold for a family of one is three sixths of that for a family of three. The CCSD thresholds are automatically updated each year according to changes in average family incomes, but are not adjusted for the size of the community in which the family resides. Absolute Measures of Adequacy Other analysts have attempted to construct absolute measures of adequacy based on the cost of essential food, clothing, shelter and other needs for varying family sizes and configurations. Two well known examples are those used by the federal government in the United States and those recently calculated for Canadian cities and provinces by economist Christopher Sarlo. USA Poverty Lines Unlike Canada and most other developed countries, the United States has an official set of poverty lines which are used to determine eligibility for a number of government programs. These lines were based on the cost of a basic nutritious food budget for households of varying sizes in 1961. These amounts were then multiplied by three which was the average ratio of family food expenditures to post-tax family income in the United States at the time. These amounts have since been updated annually to match changes in the American Consumer Price Index. The Sarlo Poverty Lines These lines were initially calculated by Christopher Sarlo in 1988 for major Canadian cities and for each of the provinces. They reflect the actual cost of a basic nutritious food diet, basic shelter and clothing and the cost of a range of other goods and services deemed to be essential for a basic standard of living by Sarlo. Comparing Measures of Adequacy As the attached table indicates, the range of adequacy for common household types under these relative and absolute measures of low income in a given year varies widely. 1992 Thresholds of Pre-Tax Adequacy - in Canadian dollars Sarlos amounts are 1988 estimates for the City of Toronto in 1992 dollars. U. S.A. amounts are adjusted for 1992 purchasing parities (U. S. 1 dollar equals Canadian 1.24) LICO amounts are the weighted average of the population by community size One adult Sarlo - 7,983 U. S.A. - 8,857 LIMs - 12,148 LICOs - 14,615 CCSD - 13,419 One adult-one child or two adults Sarlo - 10,903 U. S.A. - 11,330 LIMs - 17,007 LICOs - 17,830 CCSD - 22,365 Two adults-one child or One adult-two children Sarlo - 14,126 U. S.A. - 13,871 LIMs - 20,652 LICOs - 22,213 CCSD - 26,838 Two adults-two children or One adult-three children Sarlo - 17,936 U. S.A. - 17,775 LIMs - 24,296 LICOs - 26,843 CCSD - 31,311 Appendix C: 1993 Social Assistance Incomes (Social assistance income refers to provincial or territorial and municipal cash social assistance benefits plus other cash benefits available to persons receiving social assistance such as the refundable Child Tax Benefit and GST Credit. Newfoundland Employable Adult - 4,522 Disabled Adult - 8,541 Lone Parent One Child - 12,986 Couple Two Children - 14,825 Prince Edward Island Employable Adult - 8,180 Disabled Adult - 9,294 Lone Parent One Child - 12,773 Couple Two Children - 19,110 Nova Scotia Employable Adult - 6,100 Disabled Adult - 8,637 Lone Parent One Child - 12,080 Couple Two Children - 15,111 New Brunswick Employable Adult - 3,256 Disabled Adult - 8,238 Lone Parent One Child - 10,150 Couple Two Children - 12,151 Quebec Employable Adult - 6,316 Disabled Adult - 8,164 Lone Parent One Child - 12,607 Couple Two Children - 16,251 Ontario Employable Adult - 8,527 Disabled Adult - 11,725 Lone Parent One Child - 16,790 Couple Two Children - 22,334 Manitoba Employable Adult - 7,236 Disabled Adult - 8,257 Lone Parent One Child - 11,386 Couple Two Children - 19,410 Saskatchewan Employable Adult - 5,965 Disabled Adult - 8,512 Lone Parent One Child - 12,093 Couple Two Children - 17,382 Alberta Employable Adult - 5,608 Disabled Adult - 9,753 (Assumes recipient qualified for Assured Income for the Severely Handicapped (AISH) benefits Lone Parent One Child - 11,281 Couple Two Children - 18,122 British Columbia Employable Adult - 6,639 Disabled Adult - 9,318 Lone Parent One Child - 13,345 Couple Two Children - 17,374 Yukon Employable Adult - 8,121 Disabled Adult - 8,977 Lone Parent One Child - 14,841 Couple Two Children - 22,404 Northwest Territories Employable Adult - 11,599 Disabled Adult - 13,104 Lone Parent One Child - 20,893 Couple Two Children - 25,307 Source: National Council of Welfare, Welfare Incomes 1993 (Ottawa: Summer 1994) pages 16 to 23.4.3.4 Bias where is the standard deviation std ( X ) being estimated. We dont know the standard deviation of X . but we can approximate the standard error based upon some estimated value s for . Irrespective of the value of , the standard error decreases with the square root of the sample size m . Quadrupling the sample size halves the standard error. 4.3.6 Mean Squared Error We seek estimators that are unbiased and have minimal standard error. Sometimes these goals are incompatible. Consider Exhibit 4.2, which indicates PDFs for two estimators of a parameter . One is unbiased. The other is biased but has a lower standard error. Which estimator should we use Exhibit 4.2: PDFs are indicated for two estimators of a parameter . One is unbiased. The other is biased but has lower standard error. Mean squared error (MSE) combines the notions of bias and standard error. It is defined as Since we have already determined the bias and standard error of estimator 4.4 , calculating its mean squared error is easy: Faced with alternative estimators for a given parameter, it is generally reasonable to use the one with the smallest MSE.
No comments:
Post a Comment