I'm neither an economist nor a mathematician, but how do you give a tax credit to everyone earning money (giving them $30k from the government is largely equivalent to eliminating $30k in taxes for everyone who pays more than $30k) and at the same time give the same, from the tax coffers to everyone earning nothing, or less than $30k? (Numbers here just for illustration...)
Basically, how in the world do you account for the massive drop in actual realized revenue? Where does the money come from without raising the taxes further up the chain?
Extremely simple example:
Person A pays $0 in taxes per year.
Person B pays $1 in taxes per year.
Person C pays $5 in taxes per year.
Person D pays $10 in taxes per year.
If we give each of them $1 back from the tax coffers, the total tax paid now goes from $16/year, to $12/year. Does the elimination of existing welfare programs entirely cover this gap, or does one have to raise the tax rate on the higher earners to cover the spread, and would not simply withholding payments from the top earners make more sense than forcing them to give up their income only to give it back to them at the end of the year?
Personally, I'd be upset if I was forced to give my money to the government at 0% interest, only to know they were going to give it back to me at the end of the year. From the first quarter's contribution, I would have lost money on that due to inflation without the opportunity to offset it via investment. (Which is why I pay the penalties for failing to make estimated payments in the U.S., as I generally outperform the penalties in real rate of return for my cash.)
I'm neither an economist nor a mathematician, but how do you give a tax credit to everyone earning money (giving them $30k from the government is largely equivalent to eliminating $30k in taxes for everyone who pays more than $30k) and at the same time give the same, from the tax coffers to everyone earning nothing, or less than $30k? (Numbers here just for illustration...)
Basically, how in the world do you account for the massive drop in actual realized revenue? Where does the money come from without raising the taxes further up the chain?
Extremely simple example:
Person A pays $0 in taxes per year. Person B pays $1 in taxes per year. Person C pays $5 in taxes per year. Person D pays $10 in taxes per year.
If we give each of them $1 back from the tax coffers, the total tax paid now goes from $16/year, to $12/year. Does the elimination of existing welfare programs entirely cover this gap, or does one have to raise the tax rate on the higher earners to cover the spread, and would not simply withholding payments from the top earners make more sense than forcing them to give up their income only to give it back to them at the end of the year?
Personally, I'd be upset if I was forced to give my money to the government at 0% interest, only to know they were going to give it back to me at the end of the year. From the first quarter's contribution, I would have lost money on that due to inflation without the opportunity to offset it via investment. (Which is why I pay the penalties for failing to make estimated payments in the U.S., as I generally outperform the penalties in real rate of return for my cash.)