Here’s how to overcome the basic income: Milton Friedman’s proposal
Premise for the avoidance of doubt: those who are against citizenship income are not necessarily opposed to any form of subsidy. On the contrary, it is necessary – if not obligatory – for the State to implement efficient welfare tools and public resources to offer support to the poorest segment of the population.
However, we must not fall into the trap that it is through the allocation of public funds that it is possible and desirable to create new jobs, without taking into account the needs of the market.
Citizenship income has proved a failure for at least two main reasons. The first. The state can never replace the demands of the market. Especially in the age of globalization and the free movement of goods, it is always the private sector that directs, coordinates and regulates demand. Obviously, the essential task of the state is to facilitate businesses with low taxes and few regulations; but a public body will never be able to plan the demands of the productive world.
The second. The grillino income has discouraged young people from looking for work. If a State, within certain ISEE requirements, guarantees a subsidy of 500 euros per month to newly 18-year-olds, it is convenient to stay at home comfortable with the subsidy for 18 months.
In our small way, with great humility, we would like to suggest at least one proposal that would replace the five-star subsidy: the negative income tax, conceived by Milton Friedman, economist and Nobel laureate in 1976.
Negative tax is a fiscal policy tool that would transform the tax to be paid into a real subsidy. Below a certain income threshold, the citizen would receive a subsidy from the state equal to the value of the unpaid tax rate. For example, if all taxpayers were to pay 25 percent above € 10,000 and if I declare an income equal to zero, I would get € 2,500 (which is just 25 percent of 10,000).
In other words, it is the possibility for the most fragile population to receive financial help, regardless of the work being done.
The benefits? Less dependence on the state, less expenditure to support the onerous Italian welfare and, above all, a drastic reduction in bureaucracy.
However, there is a cultural question to be analyzed. Even before being an instrument of fiscal policy, the Friedmanian negative tax remains a taboo, especially for a state like ours, so fond of public investment, Roman centralism and economic planning.
I doubt that the Draghi government, supported by almost all parties, from the Communists to the League, will be capable of a fiscal revolution of this magnitude.
Rather, it would seem wiser to me that the center-right, to which the very large part of the liberal and liberal electorate refers, should become the bearer of this battle.
The post Here's how to overcome citizenship income: Milton Friedman's proposal appeared first on Atlantico Quotidiano .
This is a machine translation from Italian language of a post published on Atlantico Quotidiano at the URL http://www.atlanticoquotidiano.it/quotidiano/ecco-come-superare-il-reddito-di-cittadinanza-la-proposta-di-milton-friedman/ on Thu, 16 Sep 2021 03:52:00 +0000.