The Mincome Experiment of 1974-79 • Hacker News Board

Re: The Mincome Experiment of 1974-79

#61

Post by juliangoldsmith » Thu, Feb 05, 2015, 7:29 PM UTC

corin_ wrote: post #39

ars wrote: post #10

Earlier quoted context omitted.

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/mo…

I would doubt that that would happen. If I was person A, and person B raised my rent by $500/mo, I would find a person C to rent from for much less than $1000/mo, rather than continuing to rent from person B.

Prices might go up a bit, but not by that much. The poverty rate in the United States is about 15%. That means that, assuming that the cost of that $500/mo will be spread (unevenly) across the other 85% of the population, or a bit under $100 per taxpayer. That also assumes that the mincome program would exist alongside existing welfare programs, where in reality it would most likely replace them.

Re: The Mincome Experiment of 1974-79

#62

Post by aidenn0 » Thu, Feb 05, 2015, 7:30 PM UTC

irremediable wrote: post #28

Zikes wrote: post #7

Earlier quoted context omitted.

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.

It's a weird one, actually; lots of socialists like the idea, but so do lots of libertarians. Alas, conservatives hate it.

Socialists and neoconservatives seem to hate it, but economic liberals and progressives seem to like it.

Re: The Mincome Experiment of 1974-79

#63

Post by [deleted] » Thu, Feb 05, 2015, 7:31 PM UTC

aetherson wrote: post #49

bduerst wrote: post #43

Earlier quoted context omitted.

Nothing. Nothing is in place to stop basic income from causing housing prices to raise, and is one of the reasons we have food stamps and medicare instead of basic income. Housing is a good/service with a price that is set by income-elastic demand. If you push up the income across the entire market (as true basic income would), then the price of housing and cars and other goods with income-elastic demand will increas…

Raising the income for the entire population would indeed just inflate the currency. But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending. The rich would GET basic income, yes -- but their taxes would increase by an amount that would more-than-compensate for…

[deleted]

Re: The Mincome Experiment of 1974-79

#64

Post by [deleted] » Thu, Feb 05, 2015, 7:31 PM UTC

aetherson wrote: post #49

bduerst wrote: post #43

Earlier quoted context omitted.

Nothing. Nothing is in place to stop basic income from causing housing prices to raise, and is one of the reasons we have food stamps and medicare instead of basic income. Housing is a good/service with a price that is set by income-elastic demand. If you push up the income across the entire market (as true basic income would), then the price of housing and cars and other goods with income-elastic demand will increas…

Raising the income for the entire population would indeed just inflate the currency. But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending. The rich would GET basic income, yes -- but their taxes would increase by an amount that would more-than-compensate for…

[deleted]

Re: The Mincome Experiment of 1974-79

#65

Post by ende » Thu, Feb 05, 2015, 7:31 PM UTC

aetherson wrote: post #49

bduerst wrote: post #43

Earlier quoted context omitted.

Nothing. Nothing is in place to stop basic income from causing housing prices to raise, and is one of the reasons we have food stamps and medicare instead of basic income. Housing is a good/service with a price that is set by income-elastic demand. If you push up the income across the entire market (as true basic income would), then the price of housing and cars and other goods with income-elastic demand will increas…

Raising the income for the entire population would indeed just inflate the currency. But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending. The rich would GET basic income, yes -- but their taxes would increase by an amount that would more-than-compensate for…

This assumes that a UBI would be funded by redistributive income taxation. Many formulations of a UBI actually fund it through a land value tax. Connecting the two concepts basically amounts to land owners paying rent to society.

Your overall point stands, I just want to point out the LVT aspect as UBI is increasingly discussed as a topic separated from that original context.

Re: The Mincome Experiment of 1974-79

#66

Post by Yen » Thu, Feb 05, 2015, 7:37 PM UTC

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…

For what it's worth, the experiment in the article didn't give everyone $X directly, the benefit slowly dropped off as their own income increased.

For example, let's assume X to be $30k/year, and a drop-off rate of 50 cents on the dollar. (the experiment used an inflation-adjusted $10k/year, and 50 cent dropoff).

With these assumptions, someone who had no other income at all would get the full benefit. Someone who earned $10k/year would get $25k of benefit, someone who earned $30k/year would get $15k, and someone earning $60k+/year would not receive any benefit at all.

So, let's apply this back-of-the-envelope math. according to http://www.census.gov/hhes/www/cpstables/032014/perinc/pinc0..., Total Work Experience, Both Sexes, All Races, there were about 252 million persons 15 or older in the US, 218 million of which had some income reported. Of these, about 174 million with $60k/year or less.

Assuming everyone gets a benefit equal to $30k - 1/2 their income, and everyone's income is at the bottom of their respective bucket, the total cost of this program would be about $3.26 trillion.

This is not a small amount of money, but it would also replace many existing welfare programs (many of which are implemented at the state or city level, effectively transferring budget from the federal to the local)

Re: The Mincome Experiment of 1974-79

#67

Post by ta_75000 » Thu, Feb 05, 2015, 7:37 PM UTC

mason240 wrote: post #53

Zikes wrote: post #7

Earlier quoted context omitted.

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.

BI is NOT socialism at all. We still have private property and capitalism based economy, just like now. If anything this is the pure form of the mixed capitalism/democratic economy/government model that every Western nation already has. BI is a way of reconciling capitalism with the "post-work" work world we are moving into.

Strong arguments can be made for the necessity of basic income, but as a concept it is weakly socialist. The ideal that people have some fundamental right to sustenance beyond what the market value of their labor provides as income is by definition socialist, given that the corresponding capitalist ideal is that, if you're not worth paying enough to live, you die.

Re: The Mincome Experiment of 1974-79

#68

Post by aetherson » Thu, Feb 05, 2015, 7:38 PM UTC

bduerst wrote: post #57

aetherson wrote: post #49

Earlier quoted context omitted.

Raising the income for the entire population would indeed just inflate the currency. But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending. The rich would GET basic income, yes -- but their taxes would increase by an amount that would more-than-compensate for…

Assuming that housing is fungible, sure. But it's not. There are different segments by quality, location, etc. What percentage of the housing market is only for "the rich"? What extra tax percentage is middle-income going to pay? Lower income isn't going to be taxed more, so lower income housing prices are going to raise, as their market segment gets a boost in income. And now you're back at people who couldn't affor…

It is certainly possible that some goods or services that are inelastic in supply will experience cost inflation if they are goods or services that are mostly or entirely consumed by a market segment that becomes richer from basic income. I'm not convinced that housing is generally an example of such a good, but some housing may well be.

However, the same is true of targeted assistance to only the poor for only housing -- it increases their effective wealth for the purposes of competing only for housing, and, if anything, it will make it worse than a more general guaranteed income would.

Re: The Mincome Experiment of 1974-79

#69

Post by dragonwriter » Thu, Feb 05, 2015, 7:39 PM UTC

aetherson wrote: post #49

bduerst wrote: post #43

Earlier quoted context omitted.

Nothing. Nothing is in place to stop basic income from causing housing prices to raise, and is one of the reasons we have food stamps and medicare instead of basic income. Housing is a good/service with a price that is set by income-elastic demand. If you push up the income across the entire market (as true basic income would), then the price of housing and cars and other goods with income-elastic demand will increas…

Raising the income for the entire population would indeed just inflate the currency. But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending. The rich would GET basic income, yes -- but their taxes would increase by an amount that would more-than-compensate for…

> But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending.

Realistically, it would be paid for with both. Marginal increases in spending might be paid for purely with tax increases, but that rarely actually happens.

Re: The Mincome Experiment of 1974-79

#70

Post by dragonwriter » Thu, Feb 05, 2015, 7:41 PM UTC

bduerst wrote: post #57

aetherson wrote: post #49

Earlier quoted context omitted.

Raising the income for the entire population would indeed just inflate the currency. But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending. The rich would GET basic income, yes -- but their taxes would increase by an amount that would more-than-compensate for…

Assuming that housing is fungible, sure. But it's not. There are different segments by quality, location, etc. What percentage of the housing market is only for "the rich"? What extra tax percentage is middle-income going to pay? Lower income isn't going to be taxed more, so lower income housing prices are going to raise, as their market segment gets a boost in income. And now you're back at people who couldn't affor…

> Lower income isn't going to be taxed more, so lower income housing prices are going to raise, as their market segment gets a boost in income.

Predictably, it will raise less proportionately than the increase in income in that segment, so housing will become more affordable, though not as much more affordable as it would be considering only the income increase and not the effect on price levels.