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We're officially launching UBI

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Re: We're officially launching UBI

#21

Post by balfirevic »

wavefunction wrote: post #18
stocktech wrote: post #6

Earlier quoted context omitted.

I too think a negative income tax is a better method, but UBI is at least testable in some form. I think we'll see UBI tested and if successful, a negative income tax will be more politically feasible than UBI.

A negative income tax requires the same sort of bureaucracy from our current means-tested welfare systems, whereas a simple UBI paid to all does not.

It requires whatever bureaucracy you already have for managing taxes. If you are going to have taxes in your country, there should be no additional bureaucratic requirements.

With UBI, it is possible to have it paid by entity other than government, but that's a different story.

Re: We're officially launching UBI

#22

Post by chatmasta »

How can you meaningfully experiment with UBI if the “BI” is not even universal? My understanding is that many of the criticisms of UBI are based on externalities that would only become manifest in a meaningfully large population. For example, price increases and inflation might arise from everyone having extra money.

If you’re only testing UBI on a small population, then 1) it’s not even universal, and 2) there will not be enough “beta testers” to (in)validate these criticisms.

So while this may be a “success” (how do you even measure that?) it’s not a meaningful experiment at all.

Re: We're officially launching UBI

#23

Post by Nursie »

eksu wrote: post #4

Can someone explain to me why UBI is preferable to a negative income tax? I don’t get why we’ve come up with a worse version of a 40 year old idea. Are these two ships passing in the night or were there some perceived problems with Negative Income Tax that UBI is supposed to solve.

It's simple to administer and it gives people more warm fuzzies when everyone gets it, and removes a bit of the stigma of state aid.

IMHO, YMMV etc.

Re: We're officially launching UBI

#24

Post by bryanlarsen »

wavefunction wrote: post #20
eksu wrote: post #15

Earlier quoted context omitted.

You don’t have a hard and fast threashold but have it taper off on a progressive curve.

Sure, but my main point about it being a terrible implementation is that it's still means-tested requiring a bureaucracy that our current non UBI system features, which would be unnecessary and a cost-savings under a UBI scheme where every citizen receives $x each year.

It's quite possible that the NIT would use less bureaucracy than the UBI because UBI would have it's own separate bureaucracy and doesn't eliminate the need for the department of revenue, whereas the NIT would just use the department of revenue for both.

Either way, both require little extra bureaucracy.

Re: We're officially launching UBI

#25

Post by balfirevic »

eksu wrote: post #13
mbesto wrote: post #5

Earlier quoted context omitted.

Wait, aren't they essentially the same thing?

No. Universal Basic Income is ‘Universal’, meaning there’s no qualification to receive it. Basically it’s flat and it goes to everyone equally, rich and poor. A negative income tax is a progressive tax system that starts off in the negatives and works itself up as you move up in brackets or (ideally) on a smooth curve or line.

Negative income tax is not necessarily progressive tax system (as that word is commonly understood), and negative income paid to you by the state is not a "bracket".

It is pretty much the same thing as UBI, when you look at the numbers.

Re: We're officially launching UBI

#26

Post by rory096 »

fenwick67 wrote: post #8
eksu wrote: post #4

Can someone explain to me why UBI is preferable to a negative income tax? I don’t get why we’ve come up with a worse version of a 40 year old idea. Are these two ships passing in the night or were there some perceived problems with Negative Income Tax that UBI is supposed to solve.

UBI is more psychologically palatable because you get it no matter what. Negative tax creates this dissonance that if you start to earn more money you don't get as much. So then everybody tries to get around it and manipulate it so it appears they don't earn as much.

This doesn't make sense. An equivalent UBI system would have the same marginal tax rates as an NIT.

Re: We're officially launching UBI

#27

Post by moduspol »

chatmasta wrote: post #22

How can you meaningfully experiment with UBI if the “BI” is not even universal ? My understanding is that many of the criticisms of UBI are based on externalities that would only become manifest in a meaningfully large population. For example, price increases and inflation might arise from everyone having extra money. If you’re only testing UBI on a small population, then 1) it’s not even universal, and 2) there will…

I agree that it's tough to measure "success," but at least it would be presumably easy to measure failure. If we see exactly what opponents claim will happen, it would suggest a more strict implementation might be worse.

My concern is that with this we're likely looking at an even worse version of the problems seen with sending shoes to Africa [1]. Over the duration of this experiment, it's quite possible you'll create a society that abandons skills / equipment / expertise necessary to sustain an economy. That won't be a problem until the experiment ends, and then you've left people in a place far less than where you found them.

[1] http://www.djiboutijones.com/2014/02/dont-send-your-used-sho...

Re: We're officially launching UBI

#28

Post by matt_wulfeck »

Like others have said, pilot programs are a poor trial for UBI. You're creating wealth for select individuals (even a village), so you aren't dealing with economic issues such as inflation.

For example, read about Mansa Musa, who gave away so much gold in his pilgrimage to Mecca in the 1300s that he caused devaluation of money (hyperinflation) for nearly 10 years [1]. The huge influx of "free" money caused lasting damage to the functioning of the economy.

I don't doubt doubt the effectiveness of UBI. I just also believe in the efficiency of markets to absorb influxes of money while keeping the relative cost of tangible assets the same.

1. https://en.wikipedia.org/wiki/Musa_I_of_Mali#Islam_and_pilgr...

Re: We're officially launching UBI

#29

Post by skybrian »

chatmasta wrote: post #22

How can you meaningfully experiment with UBI if the “BI” is not even universal ? My understanding is that many of the criticisms of UBI are based on externalities that would only become manifest in a meaningfully large population. For example, price increases and inflation might arise from everyone having extra money. If you’re only testing UBI on a small population, then 1) it’s not even universal, and 2) there will…

It doesn't answer all questions. For another example, we won't know how much the results will transfer to other countries.

But it's meaningful to see what people will spend the money on, its effect on the local economy (village level), and how this compares to other ways of reducing poverty.

There are still a lot of people who think that people will stop working or spend the money on some wasteful way, and this will tell us whether that's true.

Re: We're officially launching UBI

#30

Post by rory096 »

wavefunction wrote: post #10
mbesto wrote: post #5

Earlier quoted context omitted.

Wait, aren't they essentially the same thing?

Presumably the difference is that at some income threshold you start paying taxes, whereas right below it you don't. So to me it sounds like a terrible implementation of a basic income scheme, since someone making X pays no taxes but x+n pays some fraction of n in taxes and presumably has little real incentive to work for n additional dollars when n is sufficiently small enough that x is close to x+(n - tax). And the…

>So to me it sounds like a terrible implementation of a basic income scheme, since someone making X pays no taxes but x+n pays some fraction of n in taxes and presumably has little real incentive to work for n additional dollars when n is sufficiently small enough that x is close to x+(n - tax).

This is true of any tax scheme. NIT/UBI are intended to fix the 'welfare cliff' problem of making significantly less money by earning an extra $1 at certain point of the income curve than at higher ones, by setting a fixed marginal tax rate (even if you're a net recipient of distribution) or guaranteeing a fixed amount to everyone regardless of need, respectively. There is no discontinuity in effective marginal tax rates under NIT.

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