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Replacing welfare payments with “basic income” for all is alluring, but expensive

economist.com

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Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#21

Post by spacehome »

I haven't really made up my mind about Basic Income, but one thing I never heard advocates of Basic Income talk about is that incentives matter to human behavior. BI will tax people who work more and give handouts to those who don't. This disincentivizes working and incentivizes not working. For example, the increasing numbers of people on Social Security Disability Insurance seems like a similar phenomenon and is not a good omen. [1]

[1] - http://www.ssa.gov/policy/docs/chartbooks/disability_trends/...

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#22

Post by vinay427 »

chrisseaton wrote: post #10
raldi wrote: post #3

This analysis doesn't seem to account for the savings and increased efficiency from all the policy changes basic income would enable. For example, water and parking spaces could be priced at their actual cost, rather than being subsidized. This would make the water market function properly and allocate it efficiently, and remove a bunch of car-related externalities. Need public housing? Not if you set a high enough b…

'Need public housing? Not if you set a high enough basic income level.' If everyone's income were increased, might not prices for things like housing go up as well, so some people could still be priced out?

Yes, but I think rent control and such could be better implemented without as strong an opposition from landlords that in the current system have to try and provide for their basic needs.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#23

Post by learnstats2 »

gaius wrote: post #5

n Britain, for example, workers can earn £10,600 ($16,500) before income tax is levied on subsequent earnings (starting at 20%). Shortly to increase to £12,500 in George Osborne's next budget in July.

1. The £12,500 promise is for this parliament, i.e. before 2020. It's probable that they will exceed the promise, but not in July.

2. Increasing the personal allowance no longer makes much difference to the poor and underemployed: the disadvantaged in society. Thanks to the last parliament, they are out of this category.

Increasing the benefit is now primarily a small tax benefit for the working middle classes that has the significant advantage of appearing to be progressive.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#25

Post by raldi »

kaoD wrote: post #15
raldi wrote: post #3

This analysis doesn't seem to account for the savings and increased efficiency from all the policy changes basic income would enable. For example, water and parking spaces could be priced at their actual cost, rather than being subsidized. This would make the water market function properly and allocate it efficiently, and remove a bunch of car-related externalities. Need public housing? Not if you set a high enough b…

As a counterexample, what about people who need more than a basic income? In Spain, chronic patients with expensive treatments are still subsidized. The Social Security system is based in solidarity: a few need a lot of money, while many don't need much at all, and it balances out (well, it doesn't, but that's another matter). I'm fine with this. Maybe I'm in the paying end of the deal, but since I believe health is…

Absolutely -- we'd still need a social safety net for people who "win" the Bad Luck Lottery, and that includes stellar health care programs.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#26

Post by nevinera »

chrisseaton wrote: post #10
raldi wrote: post #3

This analysis doesn't seem to account for the savings and increased efficiency from all the policy changes basic income would enable. For example, water and parking spaces could be priced at their actual cost, rather than being subsidized. This would make the water market function properly and allocate it efficiently, and remove a bunch of car-related externalities. Need public housing? Not if you set a high enough b…

'Need public housing? Not if you set a high enough basic income level.' If everyone's income were increased, might not prices for things like housing go up as well, so some people could still be priced out?

Yes. But the presence of a large group with a consistent fixed income would incentivize the building of large-scale low cost apartments - those don't exist currently outside of major cities (where 'low cost' is substantially higher), because the demand isn't there.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#27

Post by transfire »

powertower wrote: post #9

Having negative income tax brackets for those that: 1. Work + 2. Declare their income (i.e., file tax returns) + 3. Make below X amount ... is more financially reasonable and has the benefit of keeping the person working/trying/moving . In this system, as an example, someone making below 30K year would gets the difference between what they make and the 30K mark given to them. Otherwise, the only other solution is to…

A solid BI system could be done for around $2-3 trillion, not $5-10+. BI supporter tend to over shoot, $2000 a month is too high and will disincentivize work too much. (Although, the market would correct itself via inflation given enough time.)

I worked out the figures, and roughly the equivalent of a 16hr/week job at min wage would be close to optimal and affordable.

Taxes should be lower too, btw, but that has to do with wasteful spending in many areas, and nothing to do with BI which can actually help get rid of some that waste.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#28

Post by Sodel »

chrisseaton wrote: post #10
raldi wrote: post #3

This analysis doesn't seem to account for the savings and increased efficiency from all the policy changes basic income would enable. For example, water and parking spaces could be priced at their actual cost, rather than being subsidized. This would make the water market function properly and allocate it efficiently, and remove a bunch of car-related externalities. Need public housing? Not if you set a high enough b…

'Need public housing? Not if you set a high enough basic income level.' If everyone's income were increased, might not prices for things like housing go up as well, so some people could still be priced out?

I'd worry about the same thing. Government subsidy sure hasn't made education any less expensive.

(Education and public housing aren't quite the same thing, I know, but I'd still want to see some active work to prevent the same outcome.)

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#29

Post by learnstats2 »

spacehome wrote: post #21

I haven't really made up my mind about Basic Income, but one thing I never heard advocates of Basic Income talk about is that incentives matter to human behavior. BI will tax people who work more and give handouts to those who don't. This disincentivizes working and incentivizes not working. For example, the increasing numbers of people on Social Security Disability Insurance seems like a similar phenomenon and is no…

We don't know for sure how Basic Income will incentivise people, but I believe that it takes away a lot of negative incentives.

People at the moment are influenced by the need for enough income to support themselves securely. Poor people spend all of their mental energy on this problem, and middle class people spend some of their mental energy ensuring they don't drop into the poor category.

This has all sorts of negative implications - people rationalising work they do that is bad for society; people making sure they meet the criteria to receive SSDI.

If you give everyone Basic Income, there will presumably still be people who seek to play the system, but you remove a lot of those automatic negative incentives.

If people can see work as a way of earning luxuries, rather than as something they are dependent on for personal security, there may be some people who choose not to work. It may be that non-prestige jobs (such as cleaning) have to be paid higher.

But, I feel 100% comfortable with that. I think non-prestige jobs are woefully unfairly paid, as it is.

On the other side, people who want to work on something transformative will have more opportunity to do so, if they don't have to take the risk of not being able to provide for their basic needs.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#30

Post by powertower »

raldi wrote: post #18
powertower wrote: post #9

Having negative income tax brackets for those that: 1. Work + 2. Declare their income (i.e., file tax returns) + 3. Make below X amount ... is more financially reasonable and has the benefit of keeping the person working/trying/moving . In this system, as an example, someone making below 30K year would gets the difference between what they make and the 30K mark given to them. Otherwise, the only other solution is to…

Speaking for people who make as much as, or more than, me: We could afford to pay a lot more in taxes.

> Speaking for people who make as much as, or more than, me: We could afford to pay a lot more in taxes.

Here you go friend... http://fms.treas.gov/faq/moretopics_gifts.html

If what you just said is true, I'm sure you've already done this many times before. Lead by example, practiced what you preached, paid your real tax due.

And if not, no need to wait any more.

Here is also the public debt gift page (and stats) if you don't like the above one...

https://www.pay.gov/public/form/start/23779454

http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm

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