Milton Friedman - The Negative Income Tax
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- Опубліковано 10 тра 2012
- In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. www.LibertyPen.com
Source: Firing Line with William F Buckley Jr.
Buy It : www.amazon.com/Firing-Line-Wil...
Why isn't television this intelligent anymore?
Because if it was then we might have a better society, and why would we want that when we have all the reality shows on MTV.
Sounds intelligent but it's really intellectual ignorance. He's still promoting the idea of giving free money. That's what I take from listening to it.
Rod Knocker he is saying that if you work, you will receive a government subsidy, against the side of if you don't work you wouldn't get anything. They would make more money working than doing nothing. So if you work and don't make much money you would still get a benefit because you are contributing. This would work out better to because the businesses would have to pay for the people they employ for benefits verses society contributing for people just living on the system.
Rod Knocker
Yeah? So what?
Rod Knocker
Ah, that explains everything.
Milton's very last line summed up the advantage of his "negative" income tax - the poor person under his plan will ALWAYS have an incentive to earn more money no matter how much they are getting from the government. Also, it makes "means testing" irrelevant so it eliminates a large chunk of DC bureaucracy. This exemplifies the brilliance of Milton Friedman.
Unfortunately, most would take a "free" $20k per year and NOT work vs work 40hr/wk to take home $40k. The end result: more wealth transfer coming from fewer earners.
CommoditiesTrader The $40k deduction required to get the "free" $20k per year would necessitate having nine dependents.
@@CommoditiesTrader One could always adjust the NIT rate. 50% is simply the number Friedman used for an easy example. Adjusting the rate lower would raise incentive to work.
very true. at his best.
It also has a Jeffersonian logic to it. Jefferson was fine with taxation for the "promotion of general welfare" he built the first interstate highway, and proposed public education this way.
What he was against was the federal government controlling HOW a person or community was to implement education. So something like "no child left behind" would be considered tyrannical federal interventionism. But providing funds for education where communities has the freedom to teach as they chose would not be.
The problem is we lost sight of this logic completely. The federal government intervenes to manipulate and control behavior or to institute ideological outcomes etc.
The UBI is a very sound policy.
Yang 2020
$3000 adjusted for inflation 1968 to 2014 is $20,437.24
In the future, a hamburger from McDonald's will cost $75.00. Actually the hamburger will be illegal, and we will have to order a fruit cup instead.
We can all thank the #$*@*! Federal Reserve for that.
Ken Seabury
which is privately owned
***** implementet by law
Lars Ihler
we are fuck
They're so... civil. Why isn't modern politics like this? What happened to civility, decency, and polite discourse.
well, they are both economic conservatives
@@nyahhbinghi right!
because this isn't politics. This is an economist talking not someone running. Go look at interviews of say Jamie Dimon...calm and civil most of the time. Go look at interviews from Joseph Stiglitz.
@Jacob Howell no people do this on both sides. THis has nothing to do with left/right people in general like to sensationalize. Specially now that we live in a clickbait digital world. Conservatives today would never support handing out money to people. This video vs politics today is a different thing entirely regardless of what side you are on.
MSM emotional manipulation of people... mostly black people /lgbtq... which activates a bunch of white knighting, virtue signaling, and guilt reactions
Brilliant.
This was 50 years ago.
What in the hell have we been doing in the meantime?!
Some of Friedman's ideas have been embraced and acted on. Others have not. There is a reason some were chosen and the others rejected. Those chosen are the ones which benefit those in the position to push for them.
Our current welfare system is not intelligently designed because there is no incentive in politics to come up with a coherent plan, justify it on the best ethical grounds and assign the best minds to implement it. Instead, all that is necessary is to signal your loyalty to your chosen base. So, our current setup is merely a hodgepodge of appeasements to various *particular wills* . Democracy provides no incentive to act in favor of the *general will*, so the best ideas seldom see the light of day.
Unsubbed- Serf, Thomas Payne was a true radical. Just reasoning existed even way back then.
Payne would be put on a watch list in today's world. Would love to see him and Robespierre make a reappearance.
Having been poor -- never on welfare, but on unemployment -- I have to say this idea is brilliant and motivating. I have earned money while on unemployment, reported it, the entire amount was deducted from my unemployment benefits and created a 3 week delay to receiving further unemployment benefits after various phone interviews with UI agents. I was in essence punished for earning a small amount of money which is demotivating and pushes people out of the job market.
I love the posture, just two guys lounging in chairs in a intense but cordial discussion, idle spinning in their seats as they think. this is the atmosphere of discussion you don't find much anymore.
and the discussion lasts more than a minute
10:45 when you're debating economics during netflix and chill and he gives you that look
I gave that girl the Buckley eyes, girls love the Buckley eyes.
The more I learn about Milton Friedman, the more I see that the things he says are still relevant today. Perhaps more so. Fascinating. Not to mention the politeness and respect shown while debating.
Think of the billions that would be saved by eliminating all these agencies and just giving people cash.
UBI is a better method than an NIT, but i agree.
I know this is old, but I'm toying with writing a paper regarding the deception of modern economics and I've never heard of a UBI, could you explain?
UBI = Universal basic income. Basically negative income tax with a different name.
UBi is different from Milton's negative income tax, and has several issues. The latter is a much better policy in my opinion. Cameron--UBI is essentially a policy where the government provides everyone an equal sum of money every month/quarter/whatever. That way there's no incentive to stop working, and the poor still get stuff.
doesn't matter Negative income tax is a tax plan. UBI and a flat tax come together to form this tax plan. We're giving people money no questions asked. That's what both plans advocate for.
Wow. I literally had no idea Friedman supported something like this. This totally changes my view of him. I'm intrigued now.
+MrHav1k Milton was above all a realist. he understood that you could never get rid of the welfare system without a fight, so he came up with a plan in which welfare stays but it makes it harder to be abused and saves the government a lot of money. I don't doubt that if he thought welfare could be eliminated over night without significant backlash, he'd gotten rid of it in a sec.
+Joe Shasho actually I disagree, I think he genuinely doesn't believe anyone should die due to poverty without an option, of course that's a burden on all working people, but it's really a simple decision, do you feel a responsibility to your fellow man or not? friedman does
Jeremiah John I'm not saying he doesn't care, but don't bring emotions and perceptions of morality into an economic discussion. from what I've read and listened to from MF, he's a very cold-calculating person (which is exactly what a vibrant economy needs, not ever changing standards of social justice crap) and it seems to me that he's a no nonsense no free rides kind of person, but in order to keep social order some degree of welfare needs to remain.
+Joe Shasho right, and also keep in mind this has it's benefits, it allows the rest of the market to work without trying to compensate for people who are poor, for example you don't need a minimum wage if people already have a negative income tax in order to survive, and people who would otherwise be completely unemployed could at least get their foot in the door by doing some menial task for a few bucks an hour.
that's just one of a long list
+Alma Marcela Silva de Alegría Emotions and morality is evil?
Back when I did pro bono work, I learned those on welfare "do hair on the side," or whatever on the side. It's cash, they don't report it, pay no income tax. I did the numbers for one of them, and based on the fact that I did pay income / social security / medicare tax, and she didn't, she had more resources than me. My pro bono work is drastically cut back.
My sister does taxes for some of these people and says the same thing. They nearly double their income with income tax refund, plus under the table work.
Jane Doe get a real job with skills not oscars. Hair and grass needs skills
Crime pays.
Legalize drugs.
14:00 The number of people on welfare has been skyrocketing. Why? Because once they get on welfare, we make it almost impossible for them to get off. In order for somebody who gets on to get off, he or she has to be able to have a really good job, because to get off gradually, to earn a little bit, now doesn't pay...Under a negative income tax you would have people, give people, give the poor people a possibility of getting off gradually. They can earn an extra $100 or an extra $200 and be better off.
Exactly
I first learned about this doing my senior thesis in 1972. Friedman's essay was written in 1943, as I recall. Even then he predicted the problem with the existing entitlement system and the built-in disincentives to get off the entitlement train. A single parent with minimal job skills had every reason to stay on the program. Getting a low-wage job meant giving up AFDC payments, rent and utility assistance, and food stamps, and meant significantly less disposable income, along with the need for child care, transportation to and from work, etc. No rational person would make that choice, of course. It's been nearly 75 years since he proposed his solution and still we haven't tried it. The % of low-income two-parent families has dropped precipitously since then, and with that the social issues of today have skyrocketed. One has to believe a certain political party has perpetuated this insane system to be seen as the poor person's benefactor and to maintain political power, imho.
This was 1968! did either of these two ever look young??
I also think of Lemmy from Motorhead in the same kind of way.
Yeah, in the 30s.
They were already quite old.
Well, Friedman was in his mid-fifties during this interview.
They were already middle aged Friedman was already a famous Professor, you don’t become a Professor at 18 usually.
I sure miss Buckley. The more I listen to him and Friedman the more I realize we have really lost some great thinkers.
Yeah. Why weren't any of the 2016 presidential candidates this smart?
Gary Johnson is the closest you'll get in 2016 to someone who's actually trying to solve some problems. For sure not a perfect candidate but he's still leaps and bounds better than the rest.
Statistics show that intelligence is decreasing with each successive generation.
Someone who thinks AR15s are WMDs and in support of a carbon tax? Give me a break
The exact opposite in fact, google the Flynn effectt
This is an amazing conclusion to a question that I've raised for more than 35 yrs. Why don't you allow people to work and gradually get off of welfare? Why does the system punish those who are on welfare and want to get off? The gradual reduction in welfare as they make more money until they're able to support themselves only makes sense. Of course, there are those who will cheat and there are those who will double dip, but there are those now. One of the amazing parts to this is Milton Friedman who had this figured out long ago.
It's easier to do nothing but complain & win votes, a la Pres. Jackass, who'd rather gut the whole system & go back to the 19th century era of the Robber Barons. Democracy sucks that way. Too many retards who shouldn't replicate, let alone vote.
Because gov wants more power and control. Gov doesn’t have to worry about affording it. Just takes YOUR money for ops expenses.
Because poor people will refuse minimum wage jobs with robust social programs in place.
@@scifirealism5943 And this creates illegal immigration, as they don't pay the taxes nor get the benefit of the welfare hence inducing high taxes (robbing the middle class), while abusing the poor (illegal immigrants).
I think this is an idea both progressives and libertarians can agree on
I think this, or the idea of a basic "citizen's income" that tapers off as you earn more (which amounts to the same thing really, the details are for economists and politicians to iron out) is probably the way forward. The idea of welfare isn't that bad, and I think most people are supportive of it and willing to pay some portion of their income for it (and don't really care that much if there are a _few_ free riders, so long as the help is targeted properly most of the time), the trouble is it's been hijacked by regressive Left ideologues.
It's a decent, humane idea to level the playing field a bit in terms of "starting position". It's undoubtedly true that a good family with a decent income and good connections is a privileged headstart for anyone, but many people don't have it. The trick is levelling things out a bit without at the same time destroying the incentive to better one's position, destroying the family, etc., etc.
But this idea, of correcting for bad luck, so you equalize opportunity somewhat, is very different from the more ideological Left-wing idea of equal outcomes. The trouble is the ideological Left has skewed the dialogue about it, so that most people don't see the distinction very clearly. Equal outcomes is a collectivist idea that will always necessitate violating equal treatment. Equalizing opportunity not so, it can still be done within an individualistic framework where you treat people equally. But the one can slip into the other due to fuzziness of ideological language gerrymandering, if people aren't alert.
Ultimately, the best libertarian idea of welfare, which would also be a sort of genuinely progressive idea, would be that welfare should be a collective good self-organized from the ground up. By that, I mean that welfare should come from poor and working class people pooling their resources - which was part of the original idea of labour unions, until the Left got the stupid idea into its head to treat unions as the vanguard of the revolution. So basically instead of either government welfare or commercial insurance, you'd have a more socially-run insurance system run by the poor and working classes themselves, which I think would happily be voluntarily augmented by charity. If the Left ever gets rid of the bizarre ideology of "oppressor/oppressed groups" that's been fucking up their well-meaning attempts to ameliorate the condition of the less fortunate in this world, they might eventually get around to this idea.
I don't. The reason Basic Income is pushed is because it allows the massive shrinking of Government services and the literal privatization of everything from infrastructure, schools, hospitals etc. That is the motivation behind it and why Friedman, Silicon Valley and organizations like CATO (Charles Koch Foundation) heavily push it.
They ignore the problem of having private industry then, have basically monopolies on needs and infrastructure. There is nothing stopping Corporations, once they have control of all the infrastructure, to massive raise prices to eat up peoples "basic income" same with health insurance etc etc. You also have people with mental illness and drug problems etc where it is dangerous to put all their eggs into their own hands. Another issue is that I very highly doubt, Basic Income, which is literal minimum wage, would actually meet the costs of private health insurance and such.
Basic income is a wolf in sheep's clothing.
KironVB *They ignore the problem of having private industry then, have basically monopolies on needs and infrastructure.*
No, it's rather that they notice (what everyone else ignores) which is that government is a monopoly.
There are only trade-offs.
Guru
When you say "and don't really care that much if there are a few free riders, so long as the help is targeted properly most of the time),". that's a very leftist attitude to me, but you go on to attack leftism later in your sentence, as if you're ashamed to be associated with the left.
Right and left are just people's perceptions imo, some view the right as being about personal responsibility, but I see the left as understanding human behaviour instead of blaming and condemning it.
I don't think a libertarian would think that anyone else has the rights of the fruits of the work of another, and that any amount received from the fruits of the work of another is a privilege, not a right. If it is a privilege, how can we coerce giving in such a way? A libertarian would support a system whereby a voluntary donation can be made as a privilege to the underprivileged for some benefit. It is voluntary and is the promotion of desired behavior rather than coerced as though it's an entitlement.
Even if people disagree with Friedman, it's sad to see that political discussions on TV back then didn't descend into ranting and raving nearly as much.
What it did in South America? o_O
+Rodrigo Jäger
Probably refering to Pinochet. But i dont see how you would put any blame on Friedmann.
@@shanegiofu213 WTF?
South American here. Our problemas actually mostly come from NOT applying ANY of Milton Friedman's ideas in any way. You clearly have NO idea of what you're talking about.
This sounds like a great idea and I'm sad to think that 52 years later we still haven't tried it, not even on a small scale!
I wish that he would've ran for president. Damn
He would never have won. Too intelligent.
'merika is 25% 'tard.
^lol only 25%? Not saying there's a lot of people who are retarded, but there's a majority of people who lack objective thinking.
Tyler Evans they lack critical thinking and objectivity, would be a better way to phrase it lol
The amount of specialists that have run for US president since 1776: 0.
10:45 WTF?
nowekonto2 he does this in many interviews. Really creepy 😊
Creepy AF.
A bet is made.
He's a Lizard...
Dry eyes
I'm pretty left-wing but I can't disagree with Friedman here his plan for ending poverty is far superior to our current welfare system so long as the benefits are large enough (probably around $20,000 a year today). It cuts out all the buraeucracy of the current welfare system, a system that was fine for when it was made (mid 20th century) but can't keep up with today's globalization.
+Will Feret
You are left wing and you might like this system because you understand that this system means as a person earns more they get to keep their benifit and the gain they get is used to lower the tax credit so at some point they are not needing the credit at all they are contributing.
But you need to understand that the hard left do not like this system. There real goal is to destroy the economy so that they can introduce socialism.
In my home country the UK they tried to destroy the economy in the 70s and then in the late 70s when Thatcher came to power she had 15% unemployment and inflation of 25%.
I am not so sure you understand what the hard left are up to.
+Will Feret
_“It cuts out all the buraeucracy”_
That is an horrific scenario for all those departments to which the current complicated system provides work and income. They have a strong interest in keeping things complex and bureaucratic. That’s what government is actually doing. The poor are none of their concerns. They couldn’t care less.
+bighands69
Nobody wants to destroy the economy. Have you ever been talked to socialists? They believe that liberals and right-wingers want to oppress poor people in order to maintain power. That socialism is the only way to protect people.
In essence, from their perspective, YOU are the ones trying to destroy the economy. Maybe instead of demonizing each other, you learn to look at each other's arguments from the other perspective?
bighands69 you see in countries that have a healthy mix of socialism and capitalism like the Scandinavian countries that it works quite well to have a more fair society. We don't have to go 100% socialism or 100% capitalism, we need both aspects to have a healthy society and countries that have a good balance between the 2 are quite successful. Countries that veer too far to either end are quite unsuccessful by manymeasurements.
This is partly true but only because the population is not involved in politics as it used to be. As in any system, when you stop engaging you lose. Doesn't matter if it is a corporation where the CEO gets huge bonuses despite falling profits or a government where the minister pockets the cash through some scheme.
We literally have a capitalist system today where the majority of stock owners do not go to the once-a-year meeting to run the companies they own.
Now you will argue that this is about personal responsibility. I don't give a damn. We are discussing efficiency and corruption, not responsibility now.
This idea is awesomely simple and could be effective.
Another point: Just assume such conversations could happen in today's television. Calm and constructive. Today O'Reilly would've shot Friedman on stage after a one hour tantrum.
why would o'Reilly shoot friedman? if anything olberman or rachael maddow will.
No. He wouldn't.
@@michaelgood9160 Jesus, is this another fucking Democrat/Republican competition? Do you really need to insert this under any comment, all of them are stupid, O'Reilly, Olberman or Maddow, the guy just brought up an example of a fucking idiot (which O'Reilly is empirically guilty of) no need to jump on him.
@@michaelgood9160 Also Friedman is a Libertarian, if the American political system actually worked and there was a third Libertarian party in line in power with the democratic/ Republican parties Friedman would have never had to choose the Republican party as his views on social liberty is far from that of the Republicans.
@@michaelgood9160 he’s big government just as Maddow is
What Buckley failed to realize with his opening question is that the Negative Income Tax would *eliminate* welfare, which is the government program that "exacerbated" the poverty problem. (Still, it's always the first question that should be asked, so I give Buckley a pass.) Negative Income Tax, because of its incentive to work, is a MUCH better idea than Universal Basic Income.
Beauty of it is U can do both. Negative income tax and UBI (but need a VAT).
9:42 "And that's just wasteful. They would be far better off if we just gave them the money and let them spend it."
+Orf I think UBI would be much easier to implement than a negative income tax. It would definitely be less of a headache for everyone.
themax37 I totally agree.
+Orf They also shouldn't be too concerned about what people spend their money on anyway. Whatever they spend it on would stimulate the local economy and possibly create even more jobs for the people that want them.
themax37 Agreed! Since you like UBI you might like some of my YT vids. (Check em out!)
I was already subscribed a while ago. I really enjoy your vids man. I also seen you several times on r/basicincome on reddit.
“A basic or citizen’s income is not an alternative to a negative income tax. It is simply another way to introduce a negative income tax if it is accompanied with a positive income tax with no exemption. A basic income of a thousand units with a 20 percent rate on earned income is equivalent to a negative income tax with an exemption of five thousand units and a 20 percent rate below and above five thousand units.” - Milton Friedman
I love how they can go off on tangents without cutting to commercials.
That show was on PBS so there were no commercials. The amazing thing is that PBS actually used to show such conservative commentary. Now, it is nothing but a bastion of unhinged leftwing thought masquerading as being the mainstream.
TXKafir Wow! I could not agree more!! I was surprised to see PBS showing this.
TheJake818 1968 dude...
I came to this video disagreeing with the idea. Now I'm in favour of it. No wonder this guy won the Nobel Prize.
I had never heard of "negative" income tax until I read an article recently regarding the failures of increasing minimum wage.
This system is so simple...yet, so equitable and still encourages people to become better.
Why isn't this more of a wide spread idea?
One reason may be that many poor people under the current welfare system are afraid to get rid of it. Politicians want the poor people to vote for them so they keep the current policies in practice, even though there may be a better policy (such as the negative income tax). the masses need to be educated in economics in order to provoke change. Also, the negative income tax requires people to work. Some people may not be willing to work because they are already satisfied with the life they have under the welfare system.
They don't want solutions, only more problem
So in the 60's they knew how to interview people without cutting them off every sentence and allowing more than three minutes to discuss the issue?
He is not sayong this is the solution. He is saying that is better then what they were doing at the time. I can see why it's better: poor people would profit from making more money - they actually don't in the current system, making more money makes them poorer. And you would need a much smaller government, much less agencies and government employees to put this on pratice. Now, surely this ain't no solution to the liberty case - it's more effective stealing.
This is basically a comprise to a socialist by allowing for a welfare system to be in place but not allowing for the government to handle it and by making it a personal responsibility of those who receive it. If they blow it all on drugs and alcohol, fine, but if they budget it just right they can survive until they have a job to replace it.
+yippyyippy yoyo Great summary of the points discussed. Milton was a rare thinker, one who could take problems as they were, cut out all the unnecessary "noise" to get to the root of the problem, and suggest a solution that is applicable in that system.
+Mark Stoltzfus trying to figure out who is a deserving recipient of welfare and who is not is a fool's errand. Sure there are clear cut cases but the majority of them are a combination of misfortune and personal stupidity. Just like getting rich is the combination of fortunate circumstances and hard work. Regardless of cause, just tax those who have excess and help those in need, period.
Haannibal777 Who are the deciders that determines what is excess in someone's income. The 1% in the US includes those who make between $300,000 to $400,000. Some of the people whom share the same ideals as Bernie Sanders say they should be taxed as much as 90% of their personal income. That means the people whom make $400,000 would be left with only $40,000 for themselves and/or their family. This would act as a deterrent for those trying to go up in the income bracket, putting a further difference between millionaires/billionaires and the middle class. I personally think a tax over 25% of any persons' income, no matter what they make, is wrong. I think that because no government or person should be able to take a huge amount of what a person made because they did not make that money themselves. I also think everyone should be taxed at the same rate. A flat tax if you will on personal income and no sales taxes or vice versa. I say that because every citizen should be treated the same no matter how much or how little they make. If there was just a flat ratw sales tax, then taxation it self would be a choice because people would choice to buy something or not.
yippyyippy yoyo Bernie Sanders does not advocate for a 90% tax. Some economists say we can get away with a 70% tax on billionaires, not millionaires. These people already have so much money that they don't have to work. Money is no longer an incentive to work when you're already making enough money to buy almost anything you want. The ultimate goal for taxation should be what percentage to set it so that people will still be incentivized to work and grow the economy. You say it it's wrong for the government to take more than 25% tax. You act like the government is stealing and keeping the money for itself. The money is preferably taken for the ultimate goal of enriching everyone, including rich people. If you take the money and lower taxes on the middle class, the middle class has more purchasing power, which grows your business. It all comes back to you in the end.
1) Most arguments against Welfare are not usually about the cost of it; they are usually about the negative consequences it has on society.
In my opinion, the welfare state creates a "welfare trap" that inherently creates perverse incentives to keep people poor. It effectively is a program meant to help poor people, but in the long run, it ends up making them worse off.
In Milton's opinion, the Negative Income Tax is a way to get around the welfare trap.
I love how Friedman and Sowell both have their respective theme songs in these videos.
Jazzy for Sowell, math textbook-like (?) for Friedman.
Yang's plan need to mirror this more.
nah, his fits the 21st century way more.
Democrats would love this plan until they figured out that it would eliminate massive government oversight and bureaucracy. Then they would oppose it and most likely call it racist.
@@MetalDetroit Such a generalization, don't you think. There are, after all, conservative democrats, and liberal republicans.But I get your point lol.
@Simeon Roban Dont walk, run is a uneducated joke. Not near as smart ad yang or the 2 men in this video, just anothet popular talker with nothing real behind his words.
Yangs is a ubi, miltons a NIV.
A ubi is a monthly payment guarenteed to everyone, regardless.
Secondly, his is terrible because it defeats the purpose of a ubi or niv.
He wanted to keep all the government programs with it.
2000 a month is impossibly expensive. Thats exactly what counties said when they expermented with a ubi.
50 years later this idea seems to be completely forgotten, yet it is more vital now then ever.
I love watching Milton Friedman. Right on!
im 4 minutes into the video and "woah" that's genius, why haven't we applied these? this is brilliant
Wise words from 1968... that are ringing REALLY true in 2020, in quite a few places globally.
The problem with the NTI idea (much like the problem with UBI) is that, in practice, it would not replace welfare. It is very hard to get politicians to remove redistributive policies that are already in place. Nobody wants to seem cold-hearted and cruel by calling for "reductions in welfare." Hence, the NTI would exist as an extra payout.
And because you’d put 4 million administrators (voters) out of work. The reason for maintaining the status quo has nothing to do with the people who are served and has everything to do with the people who are serving.
The key point to take away imo is that there has to be an incentive to work and that incentive has to be substantial. UBI or NIT has to think that through. Otherwise the country will lose their competitive edge and eventually will degrade which will make everyone worse off. It's why I do like Milton's ideas. He is always thinking about the incentive, because that incentive will generate growth and prosperity for all!
5:20 Milton is a sniper. He's like yea sure walk into my verbal trap. BOOM HEADSHOT!!!!
Has this accent been forever lost in time? It sounds so polite and easy to hear.
Two great minds! I could watch these guys all day.
Haha wtf 10:46
Henry George How did I know I would find a fellow Georgian here? High five!
***** High five brother :)
+Henry George classic Buckley
well I'm no fan of Friedman, but he's pretty spot on here.
Same
Will chandler Without making too many assumptions about what you do or don't support tax-wise, will you make it a point to listen to conservative tax proposals and work to implement negative taxation needed to allay concerns about progressivity as opposed to just always saying no to anything new? I can't stand liberals who blast every tax proposal conservatives make as being a rich giveaway, but then implicitly support the status quo by rejecting anything different. As if the current code actually protects the poor Does anyone believe that?
oterj0 I can't tell if you're accusing me of something
Will chandler Nope, not accusing you personally of anything. I don't know how you have or haven't responded to conservative tax proposals in the past. I can only hope that your response isn't the same of the Democratic party, namely, "No. What's the proposal anyway?" Your comment kind of implies you're surprised someone like Friedman would be in favor of such a thing and yet the Flat tax, the Fair Tax, and Herman Cain's 9/9/9 all had 1 thing in common, large standard deductions that untaxed the poor. In the case of Herman Cain and the Fair Tax, both of these proposals had negative tax built in. You wouldn't know it from the coverage or Democratic lawmakers' responses. It just frustrates me how the only proposal the liberal seems to like is one that perpetuates the current 70,000 page behemoth. They just can't seem to imagine a world where we have a simpler system.
Are you sure you aren't falling victim to the same accusation you're making towards "liberals" ?
Taxes are not a simple matter, no matter how much people would like to believe so.
Thanks for posting this, been after a video of Friedman on this for ages
30 year ago in Thailand, we set up a factory. We paid the workers cash. After the first payday they disappeared. Gone. Empty plant. About 10 days later, after the paycheck ran out, they "came back to work." So, we provided housing, a canteen, healthcare and deducted that from their cash wages. They stuck around past 2 paydays! This may or may not apply to people in the USA today, but in my experience, human nature is human nature.
One problem with this idea is that the poor people will effectively have to pay 50% taxes on every extra dollar they earn. If 50% taxes is considered too much for rich people, how are we going to convince poor people to pay that much? But if you lower the rate, then the break-even point is very high and the state loses a lot of taxes. So it's difficult to find the right balance here. But in general, the idea is worth consideration!
I think the % doesn't necessarily matter, he was using that as an example.
good comment. but we're comparing to welfare trap and gov overhead. i got kicked off something for covering a lot of work shifts in my reporting month.
Go to the head of the class. This is a subtle understanding lost on most.
Please post the 2nd half of this interview! Thanx LibertyPen!
love this mix of CIVILIZATION II and SIM CITY song at the beginning
This is more timely than ever. With increasing automation, we really need to rethink wealth redistribution and work itself.
thoughts so far?
Milton to the left of Buckley. I'm shocked
Devil's advocate
When an interviewer interrupts the guest, he shows that he has been put in "check" to use the chess term.
I've been thinking about this a lot lately in terms of a Universal Basic Income. In order to make it politically feasible, federal revenue would have to be transferred to other taxation channels, such as sales or property tax so that people would not get sticker shock. My question is why have the payment taxed as well? Without taxing it, it is a direct transfer from those who earn disproportionately more to those who are below the average. By subtracting say 26% of gross earnings flat across the board and then topping up with a UBI of say $25k, everyone would be above the poverty line, break-even would be around $59k, and a single person earning $100k would have an effective rate of around 14%. Furthermore, if it is not taxed after payment and universal healthcare was tacked on, we could erase corporate tax and minimum wages altogether, allowing businesses to grow in the way they like without harming the people of the country they reside in. The best part is it would scale with the economy. As standards of living raise so does the UBI, but if for some reason it goes down, so will the UBI docs.google.com/spreadsheets/d/11vf7cw_XPqDF27Z-Y-DAWMZVLVYeW1DFa7UCkxOkqWk/edit?usp=sharing
This is literally the key to liberalising society
If only more people understood that :(
Which version of Liberalism, Classical or Social Liberalism?
Milton Friedman sounds like one of the most woke people ever 😂
He was
He's a Liberal in the truest sense.
The Heath government in the UK seriously looked into introducing the negative income tax in the 1970s. They found that it would be unworkable in practice.
The US government under LBJ also looked into the implementation of a NIT and found the it would be impossible to implement; the NIT would in practice have to replace all welfare and supplements. This was political suicide. Other countries that did studies (namely Finland & Canada) did indeed find Friedman’s theory to be correct. Poverty rates would drop dramatically and the will to work would not be lowered in the long term.
The host brings up a good point in distinguishing between 2 types of poor people: Those of circumstance, and those of choice. To which the proper response is that "if you don't work (poverty of choice not poverty of circumstance), then you don't eat." Hunger is a powerful motivator to work and earn a wage, that is, for the person who CAN work, a job is available, but will NOT work. Of course, no one with good ethics would advise starving someone with a disability. But for that second class of poor, poverty of choice, hunger probably provides the best incentive. For the poor of circumstance, the negative income tax is an interesting option. The hurdle at that point, would be what test or set of criteria to apply to those who are poor in order to determine which group of the two, that they fall into. Under the negative income tax system, it seems obvious that this responsibility would be left up to the government, or an agent thereof. For this reason, I think the best option is to take it out of the hands of the government entirely (no welfare, and no new negative income tax welfare replacement), and put this responsibility of distinguishing between poverty of circumstance and poverty of choice into the hands of something on the local level. Charities, churches (now don't start a religious argument I won't even respond to that), philanthropic organizations, service groups within private companies, etc. Could even they carry out this responsibility of distinguishing between poverty of circumstance and poverty of choice perfectly? Of course not. But it would be much better than the government carrying this responsibility, even at the local level.
Andrew Yang brought me here
Yang and Friedman see getting to their goals very differently but I am happy that Yang also lead me to Friedman. I would vote Friedman before Yang. Lol
Very good. And Ive never agreed with Milton on anything. The present idea of Guaranteed income is both suspect to various government regulations and indeed takes away the incentive of work.
What ever ones stance the negative income tax seems reasonable in comparison to basic income or guaranteed income that is being discussed in Europe now. I also think that a lot of things could be made more efficient without a lot of people administering the handouts. Whether the service is government or privately owned, the actual administration of taxes is a waste in of itself and needs to be reduced if possible.
I can attest to this myself, though surely not the same for everyone I have had periods with work and study or business management of my own entrepreneurial adventures where I have worked 7 days a week. In other times I have been unemployed and my resolve was greatly strengthened by having a secure basic income either from my savings, from my parents or in a few cases from the state. Currently I am dealing with a lot of matters of law and despite a sound financial situation I am terribly burdened by this. If I had a child I would not be able to facilitate the care of this child as well if I also had to deal with matters that social welfare workers concern themselves with.
Further more experiments have shown that giving a homeless person a home and some fixed income does the greatest deal of good compared to almost any charitable endeavour where you treat them as a non-adult (state or private doesn't matter, Milton is always at fault here of course).
I'm old. I'd like to work a bit, but everything I earn will be taken from me in taxes. I'd have to re-qualify for my pension if I lost it; so, why should I work? It's crazy! This system is a giant disincentive.
It's interesting to hear Milton Friedman's words about negative income tax ring true today.
what an amazing channel youve put together
10:44 creepy face
I'm gonna have nightmares after seeing that, lol.
Nah, cutesy face.
Nice video
It is great to see Friedman and Buckley dance like this!
Need to research this further.
We might need this.
The problem with many subsidy systems is that they aren't lie-proof. Many poor folks looking to save a buck will write down false numbers or make up facts here or there to get benefits, subsidies or even housing. This is actually a lot more common than it seems, I know from personal experience.
Whatever subsidy system we have, hopefully negative income taxes, it needs to be lie proof.
And, negative income tax is virtually lie-proof. Everything would go through the IRS which already has lot of infrastructure to detect fraud. And, it would replace dozens of redundant agencies, which would maximize efficiency and increase the percentage of money that gets to the poor. Friedman is a genius.
heyzeus zerotwothree Why illegitimate? It's the law to pay taxes. So it's not illegitimate.
***** He meant immoral.
What about bonds, pighouvian taxes, excise taxes, endowments, cooperatives, usage fees, lotteries and land sales? Government does not necessarily have to run on force.
To clear the above point, I don't like subsidies. Period. Teach people to live in communities, work together and grow their own food. The only 2 reasons I would support:
1) It is better than what we have now
2) It is a bridge to complete independence of the lower classes.
+forwwater There is no moral.
End welfare!
All that wisdom, I need more than a lifetime to soak that in.
I lean left, but the argument that we should just give poor people MONEY rather than dole out X amount for food, Y amount for housing, etc. is so sensible I don’t see how anyone could argue against it.
Is this sarcasm?
This is absolutely fascinating. It seems like a spot where left and right could converge. I never thought I would agree with Milton Friedman one day, lol
Same
juan curiel Hannes Radke Believe it or not, this type of proposal is exactly the type of tax system conservatives have called for. Steve Forbes' flat tax, though not incorporating a negative income tax, had a very large standard deduction as part of it. Everyone decried it as taxing the first dollar poor workers earned at the same rate at the last dollar rich earners made, which was totally false, but that's how liberals roll sometimes.
I'm not trying to pick a fight, just asking you guys to take this to heart and realize that conservatives care deeply about efficient tax collection as to 1) reduce the economic harm of a complex tax code and 2) ensure people aren't gaming the system. Our current code is ridiculous and the idea that we protect the poor with the current code is the biggest lie ever. You can have a progressive tax code that untaxes the poor and even builds in negative income (or sales) tax to help the poor, you just have to stop fighting every new tax proposal someone with an "R" by their name proposes.
oterj0 I think the greater problem goes way beyond RvD. They are all embedded in a system that works it's ways detachted from what the majority of people needs. Democracy seems to mean you can vote for "exploitation hard" or "exploitation light". Alternatives seem to be ignored. It's this way all around the world. Sad thing this.
Hannes Radke I'm confused. What is your definition of exploitation? Who is exploited and what is the evidence of said exploitation?
+Hannes Radke
The hard left are against this type of system.
The reason they are against it is because they understand it will lead to zero taxation and zero welfare state.
Because as a person earns more they get less of a tax credit and they get to keep the gain as it is used against the original tax credit.
The left fully understand this. And that is why they will fight this tooth and nail. Some of them are confused by this system and do not know how to react to the proposal but with enough time they the left will adjust their position to be fully against this.
This is the earned income tax credit.
This is a very young Milton Friedman.
If you call 56 (approx.) "young".
I like this. nobody is booing and they are both extremely calm but yet arguing and bringing their ideas to the table for comparison instead of saying your dumb and are a horrible person like politics do today.
10:44 I SAW THE DEVIL IN THIS MANS EYES.
That's one of Buckley's quirks when he weaves in a counter sometimes.
every once in awhile a wise person such as this man or bernnie sanders pop there heads up and offer to help and time and time again no one listens its mind boggling to watch
+Adam Campbell Bernie Sanders is just about the exact opposite of Friedman, to think otherwise is to completely misunderstand the viewpoints of both men.
i never said they were the same i said they are both wise
by your comment im guessing you love the egomaniac trump lol
Laugh all you want but in the end, and trump is president to be surprised to find out america has become the worlds most despised and hated country. not that it already isn't, but still you have a chance to clean up the ethics of you crooked ass country
Thats all you got? im guessing your one of trumps evil minions. look its doesn't take a genius to see what im saying the fact that you can see my bad grammar should mean your smart enough to know what im saying. so in the end your just a flaming grammar queen. Oh and video games rock if you cant enjoy a game then i feel sorry for you and i don't recommend every having kids
Why can't we have TV programming like this anymore?
Ladies & gents, stop mentioning how "more civilized things were back then" and start understanding and using these things and try to convince (not coerce) people of these ideas. They are marvelous and will lead to a better life for everyone. Best
I have respect for William F. Buckley. But since all I want right now is to understand Friedman's ideas & views, for me, this video becomes:
Buckley: "flifity chum chum herbity derbity." [boilerplate objection]
Friedman: * talks some more *
Solution: Cut the dose of whatever you're high on by half...or double it. Either way, you'll be alright in a couple of hours.
$1500 in 1968 would be about $10k in 2016
keep in mind all the extra expenses we have: phone bill, internet bill, Giant Tvs, cable bill, Energy is being taxed at a higher rate than back then.
I bet the negative income would start at around $30000~$35000 nowadays if it were implemented
+Frito Bandito that would cost approx $750bn
+Walter Blake Knoblock I was just making a guess, but that isn't far off from current spending.
I believe its 700bn for medicare and 500bn for all other services, although these are just estimates
Milton Friedman supported this as a better solution than the current structure, but ultimately wanted complete abolishment of income taxes as the best solution.
Excellent two men.
Andrew Yang on Joe Rogan alerted me to this! - that Milton Friedman supported UBI
Not necessarily. Only people earning below a certain income will get money from the government. A person earning 50k a year would pay money instead of getting money in taxes.
This is not UBI.
@@user-dt3kf2iw8i So Miltons is to everybody? and milton would do no graded income tax?
This is not the UBI...at all !
@@die4race WTF are you talking about.
I don't get it.
If I make $2000 working at a job and I get to receive $500 (half of the $1000 to the $3000 per month), I'd be making $2500
If I'm not working, I'd be making $1500 which is more than minimum wage.
Why even work a minimum wage job then ?
This 3k figure is per year, not month. Adjusted for inflation is like 20k a year today, for a family of 3 or 4 (i cant remember if it was 3 or 4) NOT an individual, and second of all, if you implement this you get rid of the minimum wage
Who would take undesirable minimum wage jobs then ? Wouldn't that just drive prices higher rendering the 30k per household null ?
Simo Dandane there is no minimum wage! And if you earn 20k and receive nothing you still earn more than somebody earning 15k and receiving negative income, so there's always an incentive to work your way up step by step, on the current welfare system, people need to make a big jump from minimum wage to get off welfare, to make it reasonable to get off welfare
There may not be a legal minimum wage, but the jobs will remain. Burger flipper, janitor, cashier, all those jobs will not be occupied anymore if this is implemented. Besides, you can't underestimate people's laziness. I'm sure somebody somewhere would be very happy to get 10k a year and not work a minute for it.
Simo Dandane why the hell wouldnt they be occupied, and 10k is an example, it should be as low as it is posible to survive with it, there's always going to be a bum, and many take advantage of the current welfare system anyways, at least this makes it easier to leave the welfare system
Awesome idea!
The guy on the left feels like a Bond villain…
Fascinating.
Interestinglyn, Friedman's Negative Income Tax with a threshold (he uses $3000 and a 50% tax rate to get a minimum revenue of $1500) is functionally the same thing as giving everyone an Unconditional Basic Income of $1500. It's an even easier way to get the same effect. And then there is no difference at all between the people getting "negative tax" and those getting "positive tax". Everyone gets the same basic income... and everyone pays tax in the same way.
It is indeed interesting. What is being forgotten in this conversation, is the type or style of economy we have all agreed upon and that is capitalism. Capitalism THRIVES on imbalance; ie the haves and have nots. The have nots is always thriving to have what the haves have and the haves is always thriving ways to get even more from the have nots. And that is why William F. Buckley is against this style of tax rate. It gives to the have nots what the haves is thriving to gain, quite often by no work being performed on their own. And that is contradictory to capitalism...
I like this because it provides a mechanism to ease off the allowance as people earn themselves out of it.
It's not functionally equivalent or an unconditional allowance if by that you mean a universal allowance that everyone gets, because the allowance decreases as you earn more. If you got a job earning $1000 on the negative income tax, you'd be entitled to another $1000 (50% of the remaining $2000), to earn a total of $2000, making you better off with the job even though you received only 2/3 of the maximum allowance. Likewise if you got a job paying $2000, the allowance would be $500 (50% of the remaining $1000), only 1/3 of the maximum. However, you are always better off with the job. The functionally equivalent version would be cutting the $1500 allowance by 50% of your income up to the amount of the allowance (AKA negative income tax allowance threshold) of $3000. For example, you earn $1000, so half of that, $500, is subtracted from the allowance, giving you a total of $2000, the same as the first example above (likewise, you earn $2000, subtract half ($1000) from the allowance to give a total of $2500).
Without this mechanism you'd have people on $100,000 still getting the allowance, or would have to define an arbitrary cut-off point such as "once you earn $5000 you don't get the $1500 anymore", which would effectively force people to hold off earning more until they could jump from $4999 to $6501 (and cost a lot more in allowance payments).
Milton Friedman has stated many times that this "isn't a good solution but a far better one".
It requires people to work for welfare. Work Experience is the biggest problem with unemployment (mixed with high price floors).
***** Capitalism can still exist without the inhumane threat of poverty in place. Carrot or stick economics are completely backwards, both rewarding corporations and ostracising the lower class is both immoral and unrelated to true capitalism.
Polycube Yea, well it's the comparison of the value of the human life to 'carrots and sticks' that we are in the mess we are now. It's not as simplistic as that. 'One size fits all' does not work in a system where people live different, act different and are different in so many ways. Categorizing humans is the same as saying they are all exactly alike. Now, where those 'facts' are to support that everyone is alike is beyond me(and everyone else it would seem.) While Capitalism works for almost everyone, it doesn't fit everyone's lifestyle and isn't everyone's cup of tea. Half full/half empty explanation of a half glass of water should help people realize that. The problem actually stems from people only seeing what they want to see. Selective fact finding. Good example of that: couple Americans get killed in Benghazi and half the nation goes insane looking for blame. There are Americans dying every day of starvation, malnutrition, murder, etc. and nobody raises a single voice for those millions that do. Selective fact finding? You betcha!
"say, a negro"
Haahahah! i love these older videos
Brilliant interviewer, brilliant interviewee.
Nowadays there’s more cuts in a TV commercial for Transformers #12 than there were in this entire program
10:46 Me when she swallows.
Better to eliminate taxation of income altogether.
Remember the government shutdown? That's what happens when we don't feed the beast.
Yeah, nothing happened.
+TheKaffeeKlatsch There is no rationale and justification in letting citizens suffer.
Anchor Senjaro Then feel free to help.
+TheKaffeeKlatsch I agree entirely. But let me refer you to the post above:
"Milton was above all a realist. he understood that you could never get rid of the welfare system without a fight, so he came up with a plan in which welfare stays but it makes it harder to be abused and saves the government a lot of money. I don't doubt that if he thought welfare could be eliminated over night without significant backlash, he'd gotten rid of it in a sec."
Milton Friedman is a genius.
very useful, thanks
#YangGang brought me here.
As much as I love listening to Milton Friedman, I'm astounded by how this interviewer finds ways to make terrible arguments and attribute no responsibility behind his words; such as "many intelligent people who criticize your ideas but have the same morals" not a perfect quote but you get my point. Everything argument he presents gets destroyed by Milton but he keeps going seemingly unhindered. In my opinion he's making an absolute fool of himself but isn't changing his strategy at all.
You know that's William F Buckley, he's a conservative and he helped create the Modern Conservative movement in the United States. Founded the National Review, he used have his own TV show - the Firing Line. He's just pushing back in order for Freedman to fully articulate/validate his ideas, have his ideas stand up to scrutiny.
PoP Politics Its called playing devils advocate. Buckley was a conservative economist himself. He was simply performing what could be deemed as "quality control" on Miltons argument.
Buckley was like that.
Friedman first proposed this back in 1943 in an article published by he and his wife. The biggest advantage to this is creating an incentive for a person to improve their situation vs. the current system which creates disincentives. Sadly, it will probably never happen because a certain political party gets their power from a large part of the electorate that it has convinced that they're being helped by that party. Not to mention all the gov't employees who would no longer be needed to verify a poor person has a gallon of milk in the refrigerator. But this would go a long way toward unchaining the poor from the dole.
This was filmed in 1968? The quality seems very good