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AB2712 – California Universal Basic Income

leginfo.legislature.ca.gov

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Re: AB2712 – California Universal Basic Income

#141

Post by AnthonyMouse »

pmoriarty wrote: post #126

My main problem with this is that if you're poor you'll have to give up Medi-Cal (California's Medicaid program -- aka health insurance for the poor) and other state-funded benefits to be eligible. Health care spending can and has bankrupted many people with private insurance who are very well off compared to Medi-Cal recipients, so if the poor were forced to give up Medi-Cal to get $12k of UBI per year, and then spe…

> Health care spending can and has bankrupted many people who are very well off compared to Medi-Cal recipients, so if they were forced to give up Medi-Cal to get $12k of UBI per year, and then spend that money on private health insurance, and spend even more of that money on food (since they'd also have to give up food stamps), it makes absolutely no economic sense for them to do that.

So then they wouldn't do that. It says you can't get the UBI if you get Medi-Cal, it doesn't say you can't decline the UBI and continue to get Medi-Cal, right?

The entire point of a UBI is that it replaces all of these hacked together assistance programs with something with less overhead (no eligibility testing bureaucracy) and less economic distortion (giving restaurant workers food assistance when they already have access to food and could better use the money for transportation or education etc.)

If you like Medi-Cal, propose it as a "public option" -- instead of getting it if you're poor, you get it if you pay $6000/year or whatever it actually costs the state. Then people can take their $12,000 UBI, use $6000 to buy Medi-Cal and have $6000 left over. But then it lets people to choose not to, e.g. because their spouse's employer-subsidized private insurance would cover them for an additional $4000/year and they'd rather come out ahead by $2000.

Having both is silly because it doesn't get rid of that inefficiency. If you instead wanted people to have a $12,000 UBI and $6000 in medical coverage then just give them $18,000 and let them decide whether they want to buy $6000 in medical coverage or something else. You can debate the amount of assistance but it still makes no sense to force people to buy specific things.

Re: AB2712 – California Universal Basic Income

#142

Post by ameister14 »

mcv wrote: post #52
gedy wrote: post #42

Earlier quoted context omitted.

It's mainly a try at introducing a VAT, populist UBI stuff is probably secondary goal

VAT seems an odd way to fund Basic Income. It should be part of the income tax system. I believe Friedman called it a negative income tax. If it's a livable BI, it should replace welfare and similar benefits.

I actually think income tax is a pretty odd way to fund UBI. VAT makes more sense to me as it's a use tax

Re: AB2712 – California Universal Basic Income

#143

Post by Shivetya »

hedora wrote: post #75
rmah wrote: post #24

Can they not do basic math? There are around 30 mil adults in California. Even if provision 18992.1 (b) is 5 mil people, that's still 25 mil people. That's 25 mil * $12,000 = $300 bil a year. The ENTIRE California state budget for 2020 is only $220 bil. They would have to more than double the tax revenue for a state with already very high taxes. Now, assuming the most generous interpretation of their 10% VAT proposal…

Excluding food, education, medical, and a few other expenses, you need to spend $10k / month to come out behind on this bill. That’s $120K/year. Assuming a 33% effective income tax rate, that’s $180k, pre tax, no savings, or expenses for food, etc. That’s well into the 80th percentile income bracket in CA, and it’s probably possible to be in the 90th percentile and still come out ahead (factor in retirement savings,…

Considering what it excludes the rich will make out like bandits compared to those it claims to help. They already spend less of their incomes on consumption while at the same spend a much higher amount on luxury versions of those categories.

As with any government tax and benefits program, it is what comes out of committee that will truly matter. VAT taxes usually land harder on the middle class than upper or lower simply because of how people typically spend their income. They are great though at masking the cost of government and increases in the cost and goods of services is more likely to be put upon the provider of each rather than government.

Reducing costs, fines, and fees for required government services and licensing would go a lot further to reducing the burden on the poor, that $36 driving license renewal doesn't look annoying at 120k but at 25k it means something.

Re: AB2712 – California Universal Basic Income

#145

Post by the_gastropod »

alistairSH wrote: post #94
JMTQp8lwXL wrote: post #68

Earlier quoted context omitted.

If you double taxes, but the money is literally just going back into people's pockets, less administration fees of the UBI program, it's just income redistribution and can completely work.

Read the bill - many of CA's existing welfare programs are staying in place. Their INCREASING admin costs with this bill. UBI should replace most/all other welfare programs, if reducing admin costs is a goal.

I think GP's use of "less" meant "subtract", not that it would decrease the administrative costs of welfare programs.

I don't think you can realistically (or ethically) get rid of welfare programs when introducing UBI. This is the issue I had with Andrew Yang's "Freedom Dividend" proposal, too. Some people are bad at managing money or have emergencies $12k won't cover. As a society, we cannot allow them to starve in the street because of this.

Re: AB2712 – California Universal Basic Income

#146

Post by lozaning »

burlesona wrote: post #85
oDot wrote: post #56

Earlier quoted context omitted.

You write as if markets are a zero sum game, however they are most certainly not. You say the poor tenant will transfer wealth to the wealthy landlord as if the tenant is losing. However -- they are both gaining. Say the rent is $1000. Obviously, the property usage right is worth to the landlord less than $1000, otherwise he would've just used the property himself. He gains. The property usage right is worth more tha…

The transaction isn’t even close to this. Imagine the case of a working class family that has lived in CA for generations. The elderly grandmother owns a home because she bought it in the 1950s when things were not so broken. She has two grown children, each with families. One family lives in her house with her, because that’s all they can afford, but that’s okay because they want to stay close to home. The other fam…

Your last paragraph beautifully sums up a point I try to make constantly on a local facebook community group Im a member of. It's chock full of people that celebrate the fact their house is worth 10X what they bought it for 20 years ago, and then out of the other side of their mouth bemoan that housing is so expensive that their kids cant afford to live there.

Housing can either be a good investment, or remain affordable, both can not simultaneously happen.

Re: AB2712 – California Universal Basic Income

#147

Post by dcolkitt »

option wrote: post #55
searine wrote: post #50

Earlier quoted context omitted.

>For what? Schools. Roads. Sewers. Water. Clean air. Power. Safety. Just to name a few. Nothing important really.

WA has no income tax and their schools aren’t worse. Oregon has no sales tax and their schools aren’t worse. Are CA public schools by far the best in the nation? ( they are not) Edit: before you jump into the “other means funding” - I lived (and owned house) in WA and CA and the overall tax burden is MUCH higher in CA

Another datapoint. Adjusted for demographics Texas and Florida have the third and fourth best test scores in the country.[1] (California ranks at 46th). Unlike California, Florida is one of three states with universal pre-k.

Florida has the lowest in-state tuition in the country.[2] This includes UF, ranked as the seventh-best public university, at an average of $6300.(UC Berkeley averages $14,000.) 39% of Florida college students pay zero tuition.

Florida has the second highest quality roads in the union[3]. It's consumer electricity prices are nearly 50% lower than California.[4]

Florida has no state income tax, relatively modest property taxes, and a 7% sales tax. Nor does it overextend itself fiscally to provide high-quality government services on a low tax base. It ranks second in the union for state fiscal health.[5]. (California, even in the midst of the greatest tech boom in history ranks 42nd.)

[1] https://www.vox.com/2015/10/26/9617514/test-scores-naep-2013 [2] https://www.valuepenguin.com/student-loans/average-cost-of-c... [3] https://www.usatoday.com/story/money/2019/07/08/states-that-... [4] https://www.eia.gov/electricity/state/ [5] https://www.usnews.com/news/best-states/rankings/fiscal-stab...

Re: AB2712 – California Universal Basic Income

#148

Post by the_gastropod »

alistairSH wrote: post #96

Very mixed feelings on this. I'm in favor of UBI, but the devil is in the details and this bill doesn't pass the smell test. As noted elsewhere, $1000/month for all adult residents adds up to more than the state's current budget. The bill doesn't appear to remove other welfare programs. UBI is usually touted as a moral-judgement free program that replaces all the targeted welfare programs (food stamps, housing allowa…

> The bill doesn't appear to remove other welfare programs

And I think that is the correct move. I'd expect the need for SNAP benefits, housing assistance, etc. would decrease (probably dramatically so) after UBI's implemented. But there will always be people who need help. You can't turn a blind eye to someone in need just because they're getting $12k/yr.

Re: AB2712 – California Universal Basic Income

#149

Post by winstonewert »

JMTQp8lwXL wrote: post #68
rmah wrote: post #24

Can they not do basic math? There are around 30 mil adults in California. Even if provision 18992.1 (b) is 5 mil people, that's still 25 mil people. That's 25 mil * $12,000 = $300 bil a year. The ENTIRE California state budget for 2020 is only $220 bil. They would have to more than double the tax revenue for a state with already very high taxes. Now, assuming the most generous interpretation of their 10% VAT proposal…

If you double taxes, but the money is literally just going back into people's pockets, less administration fees of the UBI program, it's just income redistribution and can completely work.

If the advocates of UBI would present it as plain and simple redistribution, I'd be more favorable to it. Instead, many seem oddly hesitant to acknowledge the increasing taxes side of it.

Re: AB2712 – California Universal Basic Income

#150

Post by AnthonyMouse »

rmah wrote: post #24

Can they not do basic math? There are around 30 mil adults in California. Even if provision 18992.1 (b) is 5 mil people, that's still 25 mil people. That's 25 mil * $12,000 = $300 bil a year. The ENTIRE California state budget for 2020 is only $220 bil. They would have to more than double the tax revenue for a state with already very high taxes. Now, assuming the most generous interpretation of their 10% VAT proposal…

> Now, assuming the most generous interpretation of their 10% VAT proposal... which means a 10% VAT on things like rent, transportation, etc. CA has around 11.5mil households with apx $40k/household of spending, which yields $460bil @ 10% => $46bil in additional tax revenue.

The median income in California is $75k, not $40k. On top of that, this is an alternative to existing assistance programs, so you either get to recover the money spent on those or you get to remove the people who continue to receive them from the population receiving the UBI. I'm not saying the numbers for this bill necessarily balance, but you're using the wrong ones.

> They would have to more than double the tax revenue for a state with already very high taxes.

Nominal tax rate with a UBI has to be discounted by the full amount of the UBI, because you're not paying it if you're getting it back. It obviously doesn't hurt you to pay $10,000 more in taxes if you're then receiving a $12,000 UBI.

This confuses the heck out of people because it means that a UBI costs "nothing" -- but that's how it works. It's purely redistributive. It doesn't cost anything on net, it only moves money around. At the individual level, it costs people above the median something, but still not the amount of the tax, only the difference between the UBI and the amount of the tax. The rest they get back.

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