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A universal income is not such a silly idea

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Re: A universal income is not such a silly idea

#181

Post by bzbarsky »

levosmetalo wrote: post #111
cynusx wrote: post #90

Earlier quoted context omitted.

hiring managers would use it to convince people to take sub-100k wages. This pretty much happens already in progressive taxation countries(e.g. belgium) where you can actually make less money by having a higher salary because your tax-rate increases.

I have yet to see an example about net pay decreasing with marginal tax rate increase. When you earn 120k, only those 20k over 100k will be taxed with the higher rate, not the amount below 100k, so every increase in gross salary leads to increase to net salary.

If you include welfare state benefits (which have wage-income-based phaseouts) in income, it's not hard to produce such examples. http://mises.org/daily/3822 has a simple case which has >100% effective marginal rates between about 20k and 50k for a family with one adult and 2 kids.

_That_ is the sort of thing that could go away with a guaranteed basic income. At that point, you'd just have taxes, which do in fact behave as you describe.

Re: A universal income is not such a silly idea

#182

Post by pacofvf »

LekkoscPiwa wrote: post #121
gnaritas wrote: post #116

Earlier quoted context omitted.

I'm always shocked how otherwise very rational and logical people tend think every socialist idea is communist and don't seem to know what communist actually means. > Ever heard of inflation? Yes, have you? > If you give basic income to everyone what happens to the prices of everything? I don't think you know how inflation works. Basic income doesn't increase the money supply, it's income redistribution, not money pr…

money printing is inflation.

no, money printing is not inflation, money printing may cause inflation, income redistribution on the other hand is what is proposed and actually it is already happening(welfare programs, etc.), this basic income thing just wants to make it more efficient, it can even save us money!

Re: A universal income is not such a silly idea

#183

Post by bzbarsky »

judk wrote: post #158
levosmetalo wrote: post #111

Earlier quoted context omitted.

I have yet to see an example about net pay decreasing with marginal tax rate increase. When you earn 120k, only those 20k over 100k will be taxed with the higher rate, not the amount below 100k, so every increase in gross salary leads to increase to net salary.

The US AMT can have that punitive effect, because AMT is an alternative calculation, not a marginal calculation. Yeah, not marginal, but it is a common tax system. And there are some programs that don't have marginal phaseouts. Each one is trifilingly small, but they may add up.

Even programs with marginal phaseouts can end up adding up to the phaseout being > 100% of the income (e.g. 10 programs, each of which marginally phases out 11 cents on the dollar).

Re: A universal income is not such a silly idea

#184

Post by gnaritas »

LekkoscPiwa wrote: post #121
gnaritas wrote: post #116

Earlier quoted context omitted.

I'm always shocked how otherwise very rational and logical people tend think every socialist idea is communist and don't seem to know what communist actually means. > Ever heard of inflation? Yes, have you? > If you give basic income to everyone what happens to the prices of everything? I don't think you know how inflation works. Basic income doesn't increase the money supply, it's income redistribution, not money pr…

money printing is inflation.

Basic income is not money printing, it's wealth redistribution from the rich to the poor.

Secondly, money printing is not inflation, but may cause it. Inflation is a rise in overall prices of goods and services.

Re: A universal income is not such a silly idea

#185

Post by josephlord »

I support this idea in theory although I would need to see calculations of possible levels of universal income and tax rate in a given economy to fully support it.

The interesting thing is that with a generous universal income and a fairly high rate of tax (e.g. 45%) you would naturally get a really quite progressive tax and benefit system without the complexity of many thresholds that currently exist. It actually makes the idea of a 'flat tax' actually work and not be ridiculously unfair.

It would also enable people not to be employed and to work on projects that they are passionate about whether start-ups, internships, forming pop bands, writing, caring for children or parents but enable people to choose to earn additional money. Unpleasant jobs should command increasing premiums as more people have the choice not to do them open to them but interesting flexible jobs may not need as high wages as current minimum wages (which I could imagine being abolished for recipients of universal income).

Of course some would sit around all day doing nothing but I suspect that not many would do this long term and it may be better that they can declare it as an active choice rather than be bullied into interviews and appearances at job centres.

There would be complicating factors such whether/when immigrants were entitled to the universal income and if not a minimum wage may be required to protect them from exploitation.

Re: A universal income is not such a silly idea

#186

Post by kristiandupont »

PaulJoslin wrote: post #25

The thing I genuinely don't understand regarding the basic income for all argument is that surely it just moves the goal posts rather than solves the problem at hand? In the current system, you can go stay at home and get income support, which should provide you with the basics i.e. a home, food, electricity etc. If you would like more than this, you can go and get a job and hopefully earn more (have a better lifesty…

>[...] would in affect move the poverty line up higher, which would mean the people at the bottom are still poor relatively.

This might happen to some degree but there is no reason to assume it would be "linear" so the effect is canceled out.

Re: A universal income is not such a silly idea

#187

Post by allochthon »

wavefunction wrote: post #67
salient wrote: post #56

Earlier quoted context omitted.

I agree, for this to work, everyone would have to receive that amount of money. Or at least say, everyone receiving under $100,000 a year in salary. Otherwise, you might feel cheated if you replace your $12,000 free money for a $20,000 job . You'd still have to receive the free money, so you'd then earn $32,000 a year.

Every adult citizen receives basic income, no matter their "means." That's what makes it equitable.

The equitability of a basic income is not its main selling point, as I see it; in other words it is not necessary that it be equitable according to some specific conception in order for a basic income to provide value to society as a whole. The selling points are, as I see them:

- There are now more people spending money because they have disposable income. This is good for businesses.

- There is added incentive to work, because one does not lose income by starting a job.

- The people being made redundant by automation are given a cushion that will help as they figure out how to become economically relevant again. This is good for everyone, because there are fewer families forced out onto the streets, etc.

- There is, potentially, less of a bureaucracy to manage the distribution of existing welfare programs, assuming existing programs can be consolidated into the new basic income scheme. This is an attractive point for conservatives and libertarians.

There's no need for equitability here, although that's also something that is desirable within bounds. But I think few millionaires and billionaires will find a significant decrease in their standard of living if they have to pay more into the pot than they receive. Also keep in mind that the billionaires are billionaires because society provides a framework for them to accumulate and retain the capital that they have; for this reason they have an implicit debt and obligation to society.

Re: A universal income is not such a silly idea

#188

Post by jawr »

switch007 wrote: post #133
PaulJoslin wrote: post #25

The thing I genuinely don't understand regarding the basic income for all argument is that surely it just moves the goal posts rather than solves the problem at hand? In the current system, you can go stay at home and get income support, which should provide you with the basics i.e. a home, food, electricity etc. If you would like more than this, you can go and get a job and hopefully earn more (have a better lifesty…

> In the current system, you can go stay at home and get income support, which should provide you with the basics... Income support is about £71 week (25 and over, or lone parent). That's £307.66 PCM. Assuming water, gas and electric are around £100/month, you now have £48/week. If you have to pay the "spare" bedroom "tax (average £16) £32/week is now your budget for travel, food and clothing. And this is not a contr…

Well put. Perhaps if the energy sector wasn't so corrupt that £71/week might actually go a little further. I'm living in a house with an old immersion boiler and it costs around £20 every 4-5 days (that's only on for 2-3 hours a day + cooking).

Re: A universal income is not such a silly idea

#189

Post by gnaritas »

yetanotherphd wrote: post #162
gnaritas wrote: post #108

Earlier quoted context omitted.

> the main differences being that you have to look for work This is a bad idea in the long term. The whole reason basic income is being seriously looked at is because we know automation is eliminating the need for labor and that trend will continue until work simply isn't available for a large percentage of the population. People need to get over the idea that work will be necessary to live or the idea that work is h…

We don't know what the full impact of technology would be, so a basic income is premature at best. When you say "People need to get over the idea that work will be necessary to live" you are just insulting people's intelligence. Of course I am aware that if you got paid for doing nothing, then work would no longer be necessary for (an individual) to live. Also, the theory of technological unemployment is that technol…

> We don't know what the full impact of technology would be, so a basic income is premature at best.

Now, maybe, but one need only look at long term unemployment trends to see what's coming.

> When you say "People need to get over the idea that work will be necessary to live" you are just insulting people's intelligence.

No, you are just choosing to feel insulted.

> Basic income might be a kinder and more efficient way to deliver money to people without jobs, but it won't magically make them more productive.

It's not supposed to make them more productive, so who cares.

Re: A universal income is not such a silly idea

#190

Post by peteretep »

JTon wrote: post #80
salient wrote: post #56

Earlier quoted context omitted.

I agree, for this to work, everyone would have to receive that amount of money. Or at least say, everyone receiving under $100,000 a year in salary. Otherwise, you might feel cheated if you replace your $12,000 free money for a $20,000 job . You'd still have to receive the free money, so you'd then earn $32,000 a year.

I would hate to be the person who earns just over that arbitrary 100k line.

Happens in the UK. Every £2k over £100k and you lose £1k of your tax-free allowance. This means that you keep 38p of every £1 earned between £100k and £118k, before the tax rate relaxes back to a more sensible 40% after £118k (and then up to 50% at £150k).
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