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A Basic Income Is Smarter Than a Minimum Wage

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Re: A Basic Income Is Smarter Than a Minimum Wage

#111

Post by philwelch »

RivieraKid wrote: post #81

Negative income tax makes more sense to me. (NIT is a system where you either get or give money from/to the governement, depending on your income.) First it's both a simple welfare and tax system in one package. Basic income as typically understood is only half of the story. It's also easier to reason about, the money flows are way more obvious, it's immediately clear whether you are a net contributor or receiver and…

The only downside is that you can con the government into paying you to commit tax evasion.

Re: A Basic Income Is Smarter Than a Minimum Wage

#112

Post by emidln »

alttab wrote: post #57
empath75 wrote: post #32

Earlier quoted context omitted.

The top marginal tax rate would have to be dramatically increased to pay for it. Also, you'd have to increase capital gains and estate taxes. Make no mistake, basic minimum income would be a massive redistribution of wealth. I'm in favor of it, but let's not pretend we can pay for it by shuffling around some social safety net spending.

It would completely remove the necessity to be productive. That can't turn out well. What's preventing me from having as many babies as I can knowing that they too will not have to work or find a job to be supported? I know this won't work at scale, because I understand math.

There's no necessity to be productive now. Most (all?) of the minimum wage jobs in the United States aren't productive to society except so far as that they have some minimal amount of money to make violent property crime slightly less attractive.

Re: A Basic Income Is Smarter Than a Minimum Wage

#113

Post by spinlock »

quietwhisper wrote: post #53
Karunamon wrote: post #19

Earlier quoted context omitted.

Given the frankly despair-inducing statistics of what happens to poor people when they acquire a sudden cash windfall (and if you're flat broke and living on the streets, a few hundred every couple weeks is HUGE), I intend to agree. Most UBI implementations I've seen require gutting existing welfare systems - okay, fine, but what happens to the person who inevitably squanders their money?

Sorry, what statistics? http://www.theatlantic.com/international/archive/2015/09/wel... http://www.npr.org/sections/money/2013/10/25/240590433/what-...

I do think that's a different issue but I'm with you that the assumption that poor people will spend money on drugs or alcohol is pretty far off base. After all, aren't most people in the US forced into debt because of healthcare? Getting sick shouldn't be viewed as a vice.

Re: A Basic Income Is Smarter Than a Minimum Wage

#114

Post by enraged_camel »

yanilkr wrote: post #95

A Basic Income from Govt comes at a huge price of loss of individual liberty. If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time. This model of taking from the productive sources and rewarding everyone else will have to break at a certain point. how come you get rewarded for enjoying the gossip column and I spend extra effort doing something else which i…

>>A Basic Income from Govt comes at a huge price of loss of individual liberty. If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time.

No. The entire point of basic income is that it is unconditional. You get a check from the government at frequent intervals. Unlike food stamps, you can spend the money on whatever you want.

Re: A Basic Income Is Smarter Than a Minimum Wage

#115

Post by knodi123 »

yanilkr wrote: post #95

A Basic Income from Govt comes at a huge price of loss of individual liberty. If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time. This model of taking from the productive sources and rewarding everyone else will have to break at a certain point. how come you get rewarded for enjoying the gossip column and I spend extra effort doing something else which i…

> If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time.

Yeah, that's why they should pay you in cash. Every basic income discussion I've ever seen has been on that basis.

> model of taking from the productive sources and rewarding everyone else

No, you take from productive sources and reward everyone, even the productive sources. Basic income is not just for the poor.

> I spend extra effort doing something else which is harder and my earnings are taken away

Only a portion of them. I fail to see how your argument is not also an argument against all taxation, period.

> The productive people are dragged down and discouraged

The productive people produce if they want more than the minimum. If they do produce, then they get whatever they can earn, and they pay a portion to the government in taxes.

Re: A Basic Income Is Smarter Than a Minimum Wage

#116

Post by bufordsharkley »

johndevor wrote: post #45
virmundi wrote: post #30

Earlier quoted context omitted.

The advocates for such policy do keep this in mind. They require tax increases on business. If you make money, you have to pay. The idea is to help reallocate wealth because the market has moved beyond certain segments of labor. For example, when McDonald's can automate half its staff, the other half can't provide labor at the minimum price to be worth while. UBI says give these people, those displaced from the labor…

Won't higher taxes here in the US drive more and more business overseas (specifically to China) and further exacerbate the problem of income inequality? We already see corporations keeping massive amounts of capital overseas because of high tax rates. That money should and could be here in the USA.

This is one reason why a UBI really needs to be attached to something that can't leave the country, namely a land-value tax.

Re: A Basic Income Is Smarter Than a Minimum Wage

#117

Post by narrator »

RivieraKid wrote: post #81

Negative income tax makes more sense to me. (NIT is a system where you either get or give money from/to the governement, depending on your income.) First it's both a simple welfare and tax system in one package. Basic income as typically understood is only half of the story. It's also easier to reason about, the money flows are way more obvious, it's immediately clear whether you are a net contributor or receiver and…

I agree that it would be much better and fairer to have a negative income tax as the only form of social support. One of the worst things about the current social support system in the U.S is the welfare cliffs. There's a gap between $25,000 a year and $80,000 a year where there's a greater than 100% marginal income tax because people lose access to benefits at these income levels. This chart displays it very nicely:

http://www.zerohedge.com/sites/default/files/images/user9218...

The full study examining this phenomenon is here: http://www.scribd.com/doc/273843288/Welfare-Report-Final

Re: A Basic Income Is Smarter Than a Minimum Wage

#118

Post by floppydisk »

virmundi wrote: post #30
harryh wrote: post #2

$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US federal government. Just something to keep in mind when discussing this topic.

The advocates for such policy do keep this in mind. They require tax increases on business. If you make money, you have to pay. The idea is to help reallocate wealth because the market has moved beyond certain segments of labor. For example, when McDonald's can automate half its staff, the other half can't provide labor at the minimum price to be worth while. UBI says give these people, those displaced from the labor…

Playing devil's advocate, what happens to businesses in the presence of an even higher regulatory and tax environment and what will the impact of increased taxes be on employment and business viability as well as the cost of living?

For the sake of argument, think about businesses with razor thin margins like restaurants. In the presence of increased taxes, their margins significantly diminish, if not vanish, and it becomes increasingly unviable for the business to stay in business. Once they shutter their doors, the tax base and employment decreases. Extending the argument, consider other organizations that have a healthier margin and are growing and hiring. The presence of substantially increased taxation raises the costs of growth (re: hiring) and raises the costs of employing Americans and earning money in America which reduces their ability to compensate employees / develop new products etc. Yes, they might have the margin to pay the increased tax rate, but the tradeoff is they lose money that goes into R&D, increasing salaries, hiring more people, and other business activities we think are good and useful.

As a consumer, I'm also curious to know what this does to my cost of living. Prices will not stay static and if businesses are incurring higher costs to produce goods and services, those get reflected in price. Given wages aren't keeping pace with inflation, what will a sudden price shock do to the cost of living in the face of businesses adjusting prices to address the new taxes? This could take people who are getting by now and turn them into a new wave of impoverished as necessary goods and services increase in price or it could prevent UBI from achieving its goal because prices keep rising to offset the tax rate which puts goods and services outside what people can afford on UBI.

Re: A Basic Income Is Smarter Than a Minimum Wage

#119

Post by sharemywin »

RivieraKid wrote: post #81

Negative income tax makes more sense to me. (NIT is a system where you either get or give money from/to the governement, depending on your income.) First it's both a simple welfare and tax system in one package. Basic income as typically understood is only half of the story. It's also easier to reason about, the money flows are way more obvious, it's immediately clear whether you are a net contributor or receiver and…

I read any NIC can be translated to basic income by raising income taxes. So, they are very similar.

Re: A Basic Income Is Smarter Than a Minimum Wage

#120

Post by rmc »

kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> it artificially increases the cost of labor

That's the point. A floor. Through which people should not have to work below at.

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