There is a lot wrong with the Ontario Liberal government’s proposed Ontario Basic Income Pilot program. Apart from the fact it will not encourage participants to seek improved employment opportunities (they will be penalized by forfeiting 50% of any employment earnings), I have to wonder how many more bureaucrats and consultants will be added to the civil service ranks, and just how much this program will cost Ontario tax payers.
The real concern that should be emphasized is it will likely have the opposite effect of what it’s supposed to achieve. As outlined by Charles Lammam and Hugh MacIntyre, the net effect could see participants incomes actually reduced:
“The basic income program will result in an additional 50 cents of lost transfer income for every dollar earned. This could lead to a total reduction of more than a dollar for each additional dollar earned. A basic income—when combined with personal taxes and other transfer programs—could have the perverse effect of actually reducing the total income of some recipients if they try to improve their situation by earning more employment income.”
Source: Charles Lammam and Hugh MacIntyre, The Fraser Institute, May 16, 2017
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