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How Government Can Best Help Poor People

Friday, April 3rd, 2009
Posted in Education by Joel Gross

The government generally should not be in the business of helping poor people, but if it is, it needs to be smart about delivering aid in the best possible way. Currently our government delivers aid to a variety of different groups of poor people through a hodge-podge of programs: Social Security, Medicare, food stamps, farm price supports, public housing and many more. This system has given rise to one of the largest, slowest bureaucracies in the world. How can we improve assistance for the poor from the government?

The solution is beautiful in its simplicity: reverse income tax. A reverse income tax gives people money at a specified percentage rate if they earn under a certain amount. The income brackets could be broken out this way:

Under $30,000 in income, you would receive 50% of the difference in cash from the government. All earnings over $25,000 would be taxed at a flat rate of 20%.

So if you earned $0 in come, you would receive $15,000 from the government to help you avoid destitution. If you earned $10,000 you would receive ($30k-10k)*.5 = $10k.

The reverse income tax system removes favors for special interest groups and also prevents perverse incentives being put in place that would make people WANT to remain under a certain income level. Each additional dollar earned results in more money in the individual’s pocket. The system would also eliminate the enormous bureacracy we currently have, as it could be easily administered along with our current income tax system which already has mechanisms in place for judging income & sending refund checks.

I think that private charities & organizations could do a fine job of taking care of indigent people without government help, but the above reverse income tax system is the best available option for having actual government assistance to the poor.

3 thoughts on “How Government Can Best Help Poor People

  1. Your blog is Quite interesting but it would help a whole lot if you tried listing the actual ways in which government can help poor. Apart from that you rock.

  2. I’m a single mom working in san antonio, tx but not making ends meet, I have three girls, a car that needs repairs, my home needs repairs, seems something is alaways coming up and I’m unable to get out from drowing.. I’m looking for a program that may help with Mortgage assistance that does not require me to have a child under three or five years of age.. This sound great but I’m not aware how to go about it? Please help.. If anyone knows of something out there please pass it on to my email address it will be greatly appreciated.. I’ve called the 211 / 311 but requirments usually ask for young children not passed the age of 5? my girls are 11,12 and 16, and they are great… Thank you so, and God Bless you…

  3. I don’t think this solution is reasonable. This makes it so, people don’t need to work or do anything at all, but still get money for stuff. So what if everyone stopped working? Would everyone still be able to get money? But then what is that money worth? We won’t have farmers to buy food from, or stores or anything.

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