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The Mincome Experiment of 1974-79

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Re: The Mincome Experiment of 1974-79

#31

Post by JonFish85 »

Let's do some back of the envelope math here.

316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year.

The budget that Obama just proposed is $4 trillion dollars (and that has no chance of getting implemented in full). Even if we say you can cut half of that out (Social Security, Medicare/Medicaid, etc), let's call it $2 trillion dollars.

So we need $11 trillion dollars of tax money to fund this. The total net worth of US private people is $67 trillion or so[1]. The aggregate net worth of the top 400 people in the USA is $2.3 trillion[2]. You could take all of their money, and still not even come close to paying for the program for ONE YEAR.

At that point, you start having to come down hard on the upper middle class. The top 25% owns roughly 73% of the wealth in the country, or ~$48 trillion. If you tax their NET WORTH at 25%, you could fund the program for a year.

Pretty quickly you're going to run into a situation where you're cutting a check to everyone, then collecting the money (and more) back in taxes. And in this case, it's terribly inefficient.

On a small scale, a program like this probably works well. On a large scale, it would be a disaster.

[1] http://en.wikipedia.org/wiki/Financial_position_of_the_Unite... [2] http://www.forbes.com/forbes-400/

Re: The Mincome Experiment of 1974-79

#32

Post by joshuapants »

Zikes wrote: post #7
mchanson wrote: post #2

Hope we start experimenting with this in the US also. Maybe at a state level.

It would have to be in an extremely liberal area. Socialism is still a four letter word in the US, and this is the epitome of socialist initiatives.

Yes, I'm sure socialists are the only ones who could ever possibly accept a basic income.

Oh wait http://en.wikipedia.org/wiki/Negative_income_tax

Re: The Mincome Experiment of 1974-79

#33

Post by blister »

jfoutz wrote: post #26
aninhumer wrote: post #11

Earlier quoted context omitted.

>this means that disability should be eliminated if this passes That depends whether you think the point of disability benefit is to allow disabled people to survive, or to allow them have a comparable quality of life to an able bodied person.

I really like the idea of basic income. I think you bring up an excellent point about degree of disability. I think it's really unlikely BI would be at the same level as someone on full disability. However, i do think the VA's model of % disability is helpful here. BI would (i hope) replace the first say, 10-20% brackets. Hopefully, that would simplify VA administration, so they could focus on specializing support fo…

Why not just replace it with an insurance system like Aflac? Aflac is a type of insurance that bridges the game and provides extra money to bring the person back up to whatever level they were accustomed to before.

If minimum income is enough to allow everyone to live comfortably, I don't see why the government would need to provide additional insurance for emergencies.

Re: The Mincome Experiment of 1974-79

#34

Post by dsp1234 »

JonFish85 wrote: post #19
ad_hominem wrote: post #14

Earlier quoted context omitted.

It seems like reducing socialism to me. Instead of the gov't hand-picking (centrally planning) benefactors of tax dollars, e.g. defense contractors or oil/ag subsidies, it's being returned to the people (and all the people - not just some according to their need or whatever).

It's probably an ever bigger problem than that. Regardless of liberal or conservative, if you want to raise taxes essentially across the board (which you'd have to do--even taking all of the wealth of "the 1%" would fund this project for maybe a year) you're going to have a really tough time convincing people that their taxes are going to be raised 500% or whatever it would end up being. Just back-of-the envelope num…

Is it easier to give 10 people $10 or to give 100 people $10, then take $900 of it back?

If 100 people is the totality of the population, the cost of bureaucracy for monitoring which of those 10 people actually get the $10 (specifically ensuring a low fraud level) is near or greater than $100, and the social stigma of getting that $10 in the first place is reduced or eliminated, then yes, it could be "easier".

In other words, would it make sense to give everyone the same amount, and take it back from some in taxes, when weighing the cost of the current levels of enforcement and the possible social good done through reduced stigmatization of the poor.

Re: The Mincome Experiment of 1974-79

#35

Post by maxerickson »

JonFish85 wrote: post #31

Let's do some back of the envelope math here. 316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year. The budget that Obama just proposed is $4 trillion dollars (and that has no chance of getting implemented in full). Even if we say you can cut half of that out (Social Security, Medicare/Medicaid, etc), let's call it $2 trillion dollars. So we need $11 trillion dollars of tax mo…

$30,000 is a pretty big number.

If you made it $8,000, a family of 4 would still be above today's poverty line (which is still arbitrary, but it seems like a better "minimal income" than one that gives everybody approximately the current median personal income).

$9 trillion / (30/8) = $2.4 trillion.

Re: The Mincome Experiment of 1974-79

#36

Post by _dark_matter_ »

JonFish85 wrote: post #31

Let's do some back of the envelope math here. 316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year. The budget that Obama just proposed is $4 trillion dollars (and that has no chance of getting implemented in full). Even if we say you can cut half of that out (Social Security, Medicare/Medicaid, etc), let's call it $2 trillion dollars. So we need $11 trillion dollars of tax mo…

>316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year.

I'm not sure if you read the article. But the proposition in Canada was essentially a negative income tax for the lowest tax brackets. And it didn't reach nearly your $30k a year - I have no idea where you came up with that number. Current deliberation on the issue would not even consider nearly that amount.

>On a large scale, it would be a disaster.

Only if we let you make the plan. There is plenty of other serious discussions about reasonable possibilities in this space.

Re: The Mincome Experiment of 1974-79

#37

Post by JonFish85 »

maxerickson wrote: post #35
JonFish85 wrote: post #31

Let's do some back of the envelope math here. 316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year. The budget that Obama just proposed is $4 trillion dollars (and that has no chance of getting implemented in full). Even if we say you can cut half of that out (Social Security, Medicare/Medicaid, etc), let's call it $2 trillion dollars. So we need $11 trillion dollars of tax mo…

$30,000 is a pretty big number. If you made it $8,000, a family of 4 would still be above today's poverty line (which is still arbitrary, but it seems like a better "minimal income" than one that gives everybody approximately the current median personal income). $9 trillion / (30/8) = $2.4 trillion.

According to [1], for a family of 4 the poverty line is just under $24k?

[1] http://aspe.hhs.gov/poverty/14poverty.cfm

Re: The Mincome Experiment of 1974-79

#38

Post by aninhumer »

blister wrote: post #33
jfoutz wrote: post #26

Earlier quoted context omitted.

I really like the idea of basic income. I think you bring up an excellent point about degree of disability. I think it's really unlikely BI would be at the same level as someone on full disability. However, i do think the VA's model of % disability is helpful here. BI would (i hope) replace the first say, 10-20% brackets. Hopefully, that would simplify VA administration, so they could focus on specializing support fo…

Why not just replace it with an insurance system like Aflac? Aflac is a type of insurance that bridges the game and provides extra money to bring the person back up to whatever level they were accustomed to before. If minimum income is enough to allow everyone to live comfortably, I don't see why the government would need to provide additional insurance for emergencies.

>If minimum income is enough to allow everyone to live comfortably

That depends what you mean by "comfortably". Most basic income proposals suggest a level that is survivable, but which still provides significant incentive to supplement it with a job.

Living on the absolute minimum, for whatever reason, should be a choice. Disabled people don't get to make that choice.

Re: The Mincome Experiment of 1974-79

#39

Post by corin_ »

ars wrote: post #10
intopieces wrote: post #5

Earlier quoted context omitted.

I like this idea a lot, but what would stop goods/housing from rising in price to meet the influx of free money?

Taxes have to go up to pay for this so there isn't actually more money supply than there was before, it's just distributed differently.

That doesn't mean prices won't change because of it.

As a simplified example, let's say poor person A is renting an apartment from rich person B for $500/month. The new system gives everyone $500/month basic income, but to pay for this rich person B has to pay $1000/month more in tax (of which he gets back half as basic income), while poor person A doesn't pay more tax. So essentially poor person A is getting $500/month from rich person B. Obviously it wouldn't be that simple in reality, but roughly speaking that's what a universal basic income covered by taxes would mean - money flows from rich to poor, in varying degrees.

Now sticking to the simplified two-person version, rich person A thinks "well poor person B could afford my $500/month rent before, now their income has gone up $500/month, so if I charge them $1000/month rent I know they can still afford it". The end result would be wasting time on behalf of the government and indeed the individuals to update everything while money split would remain identical, the only difference being that $500 now flows from B to A (via tax and basic income) then back to B (via rent increase).

Obviously in the non-simplified world it wouldn't be as easy as saying "that person is now getting some money from my taxes so I can charge them that much more", and numbers wouldn't be exact... but as a rough theory, pricing definitely could alter at least to some extent.

All that said: I'm not an economist, I don't know if that would happen, or to what extent. And my personal non-educated opinion is that basic income would be a good thing anyway.

Re: The Mincome Experiment of 1974-79

#40

Post by maxerickson »

JonFish85 wrote: post #37
maxerickson wrote: post #35

Earlier quoted context omitted.

$30,000 is a pretty big number. If you made it $8,000, a family of 4 would still be above today's poverty line (which is still arbitrary, but it seems like a better "minimal income" than one that gives everybody approximately the current median personal income). $9 trillion / (30/8) = $2.4 trillion.

According to [1], for a family of 4 the poverty line is just under $24k? [1] http://aspe.hhs.gov/poverty/14poverty.cfm

Uh-huh. 4*8=32.

You used 316 million as one of your multipliers, that presumably includes children.

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