Australia put an algorithm in charge of its benefits fraud detection and plunged the nation into chaos

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Then there are policies like negative gearing, a tax concession that allows you to claim a deduction against your wage income for losses generated by any rental properties you own. (Australia and New Zealand are the only countries in the world to hold such a policy.)"

Canada has this policy, I’m pretty sure. If you earned money from one source (including wages) and also lost money on another venture that would normally be a source of income (including a rental property operated as a sole proprietorship), the sum of your earnings minus your losses, is your net income for tax purposes.

I may be applying this policy myself this year - we had to replace the furnace at the house we rent out, which cost probably two years worth of rental profits on the house.

In addition, Australian homeowners are entitled to a capital gains tax discount of 50 percent once the property is sold.

Canada also does this - capital gains, including on the sale of a rental property, are taxed at 50 percent of the rate of other income. Capital losses, similarly, you can only claim half of, not the whole loss, as you can for other non-capital business losses.


This is what happens when you put SkyNet in charge of social services instead of nuclear arsenals.


paying them a commission on the basis of how much money they extracted from poor Australians.

What could go wrong?


In bureaucratic systems, accidental errors are only comedic relief for the errors baked into the system by design.


What do you expect when you pay the fraud-detectors based on how much fraud they find? A tremendous incentive to find fraud whether it’s there or not.

You need penalties for false findings of fraud.


Michigan just went through something like this with their unemployment insurance system-- they automated records comparisons and convicted thousands of people of fraud without any human intervention. Then it turned out that there were lots of reasons for non-matches and more than 90% of the fraud convictions were in error. But privatizing it would have been even worse. I can’t imagine why Michigan didn’t go for that, too!


The fact that it is always better for everyone (i.e. cheaper and more humane) to just help people no matter what is so hard to get through people’s heads. “Taxpayers” obsess about pennies that might be going to undeserving person, even if the system it takes to recoup those pennies itself costs a fortune, and ends up punishing non-offending people FAR more than the small number of offenders.


This is especially difficult with folks I describe as CINOs (Christians in name only).


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