Minimum Basic Income Poll: Do Tax & Financial Pros Endorse It?

Beth Graddon

It was neck-and-neck all the way.  When we asked our readers in the September KBR poll if they thought a Minimum Basic Income should be introduced in Canada, 48.6% of participants said yes, while 51.4% said no. Their comments, which demonstrate just how complex this issue is, speak for themselves…

First to the ‘No’s’ – Do We Have Personal Responsibility Crisis?

“Everyone should have to go out and earn a living like the rest of us. If you bring in a basic minimum wage a lot of people will only work enough to qualify for the basic wage and be milking the system in any way they can and still get their welfare as long as they only earn the extra $1,000 they are allowed to earn. We will just give more free money to a lot of people who don’t work for it.” - Karen Kasian

“Absolutely NO!!!  I work in the energy sector and I know many people that get laid off but will not start looking for work until their unemployment is about to run out.  They think of it as a paid vacation.  Many of my colleagues are making $250,000 a year.  They are living paycheck to paycheck and are way over their heads.  They don’t have the slightest clue on how to manage their own money.  This is money that they actually worked for and earned. Many of them are going bankrupt or will be going bankrupt because overtime was cut.  I don’t think my colleagues’ money management skills are the exception to the general population.  How is giving a large swath of the general population ‘free’ money and expecting them to be self-disciplined with it a good idea?  We know this as many lottery winners are broke within 5 years of winning a massive windfall that should have set them up for life.  I think we have a personal responsibility crisis in our nation.”  - Paul Williamson

“I would consider having a basic income for individuals as long as it was provided (in return)  for a service being received.  Welfare with no accountability is not what helps individuals.  There are many tasks that need to be done within our communities and it would not be difficult to have a registry and those that need income would come in and be given a task or tasks to be done, skilled and unskilled.  This would also help with self-worth, provide incentive and make individuals accountable.  I understand that there are basic needs that some individuals require, and they are not able to work at any level and they need to be helped, and we should.  For others that are not working or being productive, to just say that “because you exist, we will pay you” is no help to any individual.” - Bill Mearns

“The difficulty with this proposition in is who will pay and how that will be accomplished. As the owner of a small business I can say that many businesses are stretched to the max and cannot afford even higher wages. The move to $15 an hour minimum wage in recent years took a heavy toll and employees were struggling with that and several other increased costs before COVID hit. As for the taxpayers bearing the brunt of this initiative, I do not see that as feasible for the medium to long term. The debt created by the COVID Pandemic is going to be hard enough to climb out of.” - Dan Merkley

“Finland just wrapped up their minimum basic income. It was considered to have been a disaster. They tried it for 15 years and finally gave up. Why would it be any more successful in Canada? Let’s not do this.” - Mitzi-Lynne Morgan

“No basic income. Teach someone how to fish and let them catch their own food. However, for people who really need the assistance, then let’s give them the assistance and all the tools they need to work and get the benefits of self-esteem from working or perhaps ‘governmentally recognized volunteering activities’ and contribute to our wonderful country. Unless of course, life really has given you lemons. There has to be a better way to identify who really requires assistance from those who take advantage of the system.” - Nathalie

“NO.  Enough said.”  - Alan Rowell

“Who is paying for this? The government does not have its own money. This will diminish the tax pool forcing the remaining hardworking Canadians to foot the bill with increased taxes. I was a single mother, earning a salary of approximately $50,000. That income level was enough to not qualify for government benefits like the child tax benefit or an income tax refund. Those on welfare with child tax benefit and other government credits had more cash in their pockets at the end of the year. I would like to see every source of income taxed at dollar one and credits given to the vulnerable sectors of the population Canadians are bleeding money, now more than ever in a pandemic. We simply cannot think about a basic income at this time.” - Holly Atwood

“A minimum basic income can be a disincentive to work. Canada already has a higher ‘normal’ unemployment rate than the U.S. because of our social programs. If someone cannot work due to health; temporary layoff; etc. they obviously need a helping hand; however, I used to work as a claims assessor for Canada Employment and it amazed me how many applicants felt they had a right to “pogey” as if the government gathered the money off trees rather than being aware that their fellow citizens were footing the bill through their taxes. What Canada needs are programs that give its’ citizens an incentive to work not an incentive to sit home and watch Netflix off the back of their hard-working neighbours.” - Sharon

“Don’t we already have a basic minimum income in place?  That’s what the welfare /social assistance system is about, is it not?  Bringing more programs in beyond those that were in place prior to the pandemic, I think would be moving in the wrong direction.  Need to assist people to want to work, and get them out to work if they are able.” – Deborah Belden

The “Yes” Comments:  Will Some People Take Advantage?  Yes.  But. . .

“Allowing people a basic minimum income that takes away the stress of choosing between paying the rent or feeding the kids allows people to focus on other priorities, like getting training or education so they can find work to support their families on their own. Will some people ‘take advantage’ ? Yes. Most times, though, a minimum basic income will be well worth the money spent.” - Aileen Krush

“Minimum basic income should be calculated to include all non-taxable benefits - quarterly GST, monthly Trillium (in Ontario), Child Benefit, Workers Compensation, child support and spousal support etc.  Having said that, if someone were on minimum Basic Income and they find work that pays more, the excess income should be clawed back at 50% - not 100% - to encourage people on support to become more gainfully employed.” - Rosalind Kemp Gleave

 “There will always be folks who cannot manage their money whether they have a lot of it or barely any at all.  There will always be the folks who can stretch a dollar into two.  Probably at least 60% of “poor” folks could learn to manage if they had enough income to get by on.  The Senate was talking a few years ago about a minimum income and all the disposable dollars folks would have to boost the economy.  They thought if everyone received at least $24,000 a year they would have $24,000 to spend.  What the Senate neglected to consider was income tax.  Here in NS, that $24,000 quickly becomes $21,293 after tax.  Only a few dollars more than they would receive on minimum wage after paying CPP and EI and taxes.” - Pat Gamborg

“Read about the Nordic Countries; they have a form of basic income, and it works. Those on basic income are required to do “something” even some volunteer work. I have been to Denmark many times…. I do not hear complaints from the working taxpayers about “those receiving income and doing nothing” (and I do ask my cousins). It can work… basic income creates pride in community, more ‘middle income’, more consumers who can shop in stores and keep businesses earning income. Nordic countries have most of their citizens happy, healthy, good income and good lifestyle. - Anni Markmann

“Until this year, my answer would have been ‘NO’.  COVID continues to wreak havoc on peoples’ lives, especially employment opportunities.  While I know people who are ‘milking the system’ I see a pile of closed businesses and people struggling.  The government seems to feel the solution is to getting/keeping businesses back on track.  However, it works out, WE will be paying for years as we dig out of our current situation.  We need to encourage employment and getting those who can work BACK to work - the sooner the better.” - Lucie Hansom

 “If we went with the minimum basic income (MBI) we would eliminate the administration and humiliation of going through all the other social welfare programs where you first have to prove you need it and some people qualify and same don’t.  Welfare workers would then focus on the other aspects of their client’s well-being.  Everyone would be paid the MBI.  It would not be taxable income.  The personal exemption on income taxes would be eliminated.  The tax rates might go up slightly, but the net of all that would live most fully employed Canadians where they are now, except they would now have the safety net of the MBI if something goes sideways.  Marginally employed people would not have anything ‘taxed away’ and would therefore have the incentive to go out and find work.  The challenge is how the MBI applies to people’s children.” - Brian Fea

Many Commenters Remained Uncertain:  Something Has to Be Done

 “Having the bottom half of all earners lose income share while the top 1% rapidly grows its share is a trend that will not provide a foundation for a happy, peaceful, stable country.  Something has to be done.”  - David A Bishop

“When you pay people to sit around and do nothing, they sit around and do nothing.  Removing the incentive to find work and be productive is self-defeating.  I think there should be some sort of temporary help for people who, through no fault of their own, cannot find work but the emphasis is on the work “temporary”.  If they are not actively seeking employment, they should not be compensated.” - Robert Litschel

“With a minimum basic income, you are dependent on the government.  Those that have a legitimate need or disability need the community support and I back this fully.  The rest of us need to support ourselves as well as the government with our taxes.  BUT our taxes need to be spent wisely.  It’s not the government’s money - the government has no money of its own - the money comes from taxpayers - don’t ever forget this.” - Clint Wormsbecker

“I’m torn by the concept, but if we saw similar results as the experiment, and it was done well, the result could be a net positive.  If there was less drug and alcohol abuse, resulting in lower hospitalizations and health care costs, if a basic living level of income wasn’t immediately subject to income taxes, if physical and mental health were improved, if families were more stable, and more students completed school, it could be a huge boon to the country.  It could also reduce bureaucracy and potentially eliminate some government departments / agencies.  From that perspective, and from a perspective of compassion and empathy, I’d like to see something implemented. On the flip side, I worked for the federal government for 13 years.  So, unfortunately, I don’t see this being implemented well nor resulting in a reduction of government expenditures in other areas.  That’s the unfortunate part.  I’m not surprised to see nearly a 50/50 split on the poll.  Admittedly, I haven’t voted because my mind isn’t made up one way or the other.” - Derek T

A huge thank you to everyone who participated in this controversial poll. This month, we invite you to answer: “Government plans to introduce automatic free tax filing for the 12% of adults who don’t file tax returns to ensure they get benefits.  Is this a good idea?” Weigh in!

Additional educational resources: Last month’s poll question was brought up even more debate due to the pandemic. The government has also proposed and enacted a number of different solutions that tax and financial professionals need to adapt to and address with their clients. To learn more about how to navigate these factors, take the Financial Fallout Course online today.

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