UBI as a productivity dividend

I think we will see enough of “everything” to invalidate the current paradigm of economic function. Something like 80 percent of all activity that does not involve high-touch customer interaction where people will prefer the more personal feeling of another human over the superior technical performance of a robot.

>Unfortunately, under current law, the earth is not everyone’s. Real estate and mineral rights are pretty well entrenched.

This is true, but we also tax those holdings in acknowledgement of their communal nature. Ideally, ownership would revert to the best steward, but we all know how that works out in practice lol. The status quo is only possible because the state retains a monopoly of coercive force. If the economic model is undermined, this monopoly is among the first of casualties. So while I don’t disagree completely, I’d have to say that we end up in a sort of race condition problem if the state hesitates too long to assert communal right to autonomous production.

> What are your examples of "extant UBI systems"? And to what degree are they true UBI?

Unfortunately all “UBI” experiments or implementations are limited in scope, because there is always a time or geographical limit to their application. So “true” UBI, which would largely eliminate the leverage that increased local wealth would have against market forces, has never been tried. As a result, existing trials have possibly been contaminated because the gradient at the edge is a problem.

Additionally, UBI in our context would be applied in an economic desert scenario, which means that wealth would not be increasing in the mean.

As for examples, there have been a few, but I’m on the can staring at my phone and I’m way too lazy to go back and try to search up the several examples of UBI experiments, so I’ll just leave you with the one I’m most familiar with because I lived there; Alaska’s permanent fund dividend. At 1-2k per year per human, it is a pretty big infusion for many families. Once again I’m too lazy to dig right now, but there has been many investigations of it’s effects on the economy, and the net result was that prices went -down- dramatically in response to dividends in an effort to capture market share. I would not expect to see this effect though, in the scenario we are exploring - once again it’s a gradient effect, I believe.

> massive transformation of existing human society.

something like a 3rd industrial revolution? As someone who is innovating in the developing technology in the sector, I believe that we are in for a much more sudden and extreme shift than both of the previous Industrial revolutions combined, compressed into a couple of decades. The first two spanned about 120 years of disruptive change between the two of them.

LVT applies a $10k a year tax on a property

UBI gives everyone $2k a year extra

Landlord can increase rent by $2k a year to $17k, but not by $10k a year

Only way landlord can get back to $10k is to increase density, which increases supply, which introduces price pressure

From a moral point of view it gives every citizen an equal share in the country's land. If they use more than their fair share (a 0.5 acre lot in Manhattan), they pay more. If they use less (a 0.5 acre lot in Minnesota) they pay less.

That dividend could be distributed as increased public services, or lower taxes, or just as a dividend.

Then why does the existing system provide all manner of healthcare subsidies, student loan subsidies, etc. with phase outs extending well into that income range? The ACA subsidy for a family of four isn't fully phased out until $132k.

> Redistribution (UBI) is costly (being funded by high rates on the higher incomes, that deter them from earning more)

Aggressive claw backs are more costly because they require much higher marginal rates on lower income people and it's high marginal rates that provide the disincentive to work. Even before considering the argument that people being paid low hourly rates are easier to deter to begin with, because paying someone else to do something for you in order to free up time to work for money instead of doing it yourself is more costly to someone who gets a lower hourly wage.

> Giving any part of the middle class a net-UBI only to claw it back with high rates (as it must be at some point in the tax schedule) wouldn't leave them any better off in practice and it would set up pathological anti-work incentives.

Have you done the math on this one? The bottom 50% of people have less money by increasing their pre-UBI effective rate by 50% than by increasing the universal effective rate by 7.5%, while providing them with a massive disincentive to work.

> If you're talking about effective rates being less than marginal rates, that's just inherent to any progressive taxation.

No, we need to distinguish two things here. One is the incremental effective rate for taking a job, i.e. if the employer pays $X to employ you, what total percent of X goes to the government? This is the thing that matters when choosing whether to take the job (incentive to work). You want this number to be uniform because any decrease in one place requires an increase for someone else and you lose jobs whenever you cause the rate to exceed the surplus derived from the job, so combinations of high and low rates are less efficient than uniformly medium ones. You especially don't want it to be higher for lower income people, because then the increase on them is disproportionately large.

The other is the effective rate net of unconditional benefits. When you get benefit (i.e. UBI) regardless of whether you take the job then that's included here but not there.

You get the same effect as a progressive rate structure in the second sense with a flat rate plus a UBI, because everyone pays the same marginal rate and therefore the same effective rate in the first sense, but someone who makes $54,000, pays a third of it in tax but receives a $12,000 UBI is on net paying $4000, i.e. 7.5% rather than 33% of $54k, whereas someone who makes a billion dollars is still paying a third and receiving the UBI, but $12,000 is a trivial percentage of a billion so their effective rate is still ~33%.

> There is in fact a strange theoretical result that the very top earner should ultimately be facing a zero marginal rate on their very last dollar of income since any non-zero rate on that "top" level is pure overhead

This theory assumes that the primary decision here is whether to work an additional hour, but the primary decision is actually which job to take, if any. You might make three times as much if you become a doctor, but then you give up 8 years of earnings to go to school and exit that with six figures in student debt. If you're deciding when to retire, or whether to enter the workforce but then have to pay much of your earnings in childcare and commuting expenses, you're either keeping/taking the job or you're not. The "incremental" rate when making the decision applies to the majority of or entirety of the compensation, not just the last dollar.

And notice that you can simultaneously screw this up on both ends. If you put oppressively high rates at the low end, even if that only lowers the high end rates by a minor amount, it just became relatively a lot more attractive to make three times as much money. Then you get elite overproduction and cost disease because you're screwing the janitors and service workers so hard on the tax rate. Some of them fall out of the workforce, others turn to diploma mills and employers have trouble hiring in that income range for necessary jobs and then have to raise prices on everyone. It's the same terrible thing the existing system does and what we should be trying to prevent.

> I feel like you're disregarding the fact that the high-rates at the bottom are purely UBI-clawback rates

There aren't supposed to be clawback rates. That's the entire point -- to get rid of the punitively high work-disincentivizing marginal rates for lower income people present in the existing system.

> in fact, $30,000 per year seems quite infeasible as a UBI range

That number is lower than the existing income level where people pay zero/negative federal income taxes net of benefits.