Trends that will create demand for an Unconditional Basic Income • Hacker News Board

Re: Trends that will create demand for an Unconditional Basic Income

#451

Post by daraul » Thu, Jul 11, 2013, 8:25 PM UTC

dragontamer wrote: post #332

daraul wrote: post #269

Earlier quoted context omitted.

This is a powerful point to ignore. The Great Recession has shown this trend might be establishing itself already; the percentage of people not participating in the workforce in any fashion spiked, hasn't recovered, and isn't showing promising signs of ever recovering. What a basic income will tend to do however is reduce the need for a minimum wage. Currently the minimum wage exists to solve a problem: People need t…

On the contrary, I see a falling dollar in the world market which is reinvigorating the US Manufacturing industry. As China's middle class grows, they become impatient with China's loose policy of eradicating their own currency to promote local jobs. The Chinese middle class has begun to rise, and with it, the cost of production in China. In the US, the weaker economy has hurt the US Dollar, making manufacturing chea…

It's not just a weaker dollar causing manufacturing to return to the US, though (especially relative to China) that is definitely part of the cause.

Rising fuel costs threaten global supply chains. Especially in areas that have a less-than-cordial relationship with the US such as China, there is some uncertainty that things will stay as they are.

Another powerful trend that is reinvigorating the US manufacturing industry is the re-evaluation of the spoils of offshoring. Companies such as GE are discovering that there are many side benefits to bringing production back to the US: Shorter supply chains from manufacturing to retail, better quality from production, and greater feedback from shop floor to engineering.

http://www.theatlantic.com/magazine/archive/2012/12/the-inso...

One of the biggest unaccounted costs of offshoring was the effects it had on the lifecycle of a product. That article points out how GE was able to take a $1600 water-heater from China and sell it for a profit $1300, just by manufacturing it from the US. It turns out that in off-shoring the production, they lost most of the feedback in the product's lifecycle that enabled them to refine the design far beyond what they thought was 'final'.

Re: Trends that will create demand for an Unconditional Basic Income

#452

Post by bzbarsky » Thu, Jul 11, 2013, 8:25 PM UTC

oijaf888 wrote: post #282

throwit1979 wrote: post #233

Earlier quoted context omitted.

No more than taxing labor income (which the US does disproportionately) If you have a point to make, please try doing it without blatantly lying. It's common knowledge that the US has substantially higher corporate tax rates than almost anywhere else: http://www.guardian.co.uk/news/datablog/2011/feb/21/corporat...

Seriously? What tax rate do you pay on your regular 40h a weke job? What tax rate do you pay on investments? Most people are taxed roughly 36% (28% income tax, 2% medicare, 6% social security) on their labor, however investments are only taxed at a flat 15%. Hence, the US disproportionately taxes labor over investments. Do you have other evidence that shows that investment income is in-fact taxed higher than labor in…

> (28% income tax, 2% medicare, 6% social security)

This year, the 28% tax bracket for a single individual stars at $87,850 taxable income. The Social Security cap is $113,700, and the Social Security tax is levied on all income below this. The individual standard deduction is $6100 and the personal exemption is $3900.

That means that for an individual, a 28% income tax rate means income is above $97,850 while paying Social security taxes means income is below $113,700. I sort of doubt this covers "most people".

For a couple, the 28% bracket starts at $146,400 taxable, the standard deduction is $12,200, and personal exemptions are $7,800. So in this case the rate you quote applies to income over $166,400 and below $227,400 if both members of the couple have equal salaries. Again, hardly "most people".

Finding good numbers on this is hard, but http://answers.yahoo.com/question/index?qid=20101119053457AA... suggest that somewhere around 46% of taxpayers fall in the 10% or 15% brackets, and that's ignoring the effects of EITC and whatnot....

Of course the 15% bracket definitely has a marginal rate of 23% or so, again ignoring EITC and various other tax credits you can claim at those income levels that phase out with income, since they're certainly paying FICA at that point.

> investments are only taxed at a flat 15%

It really depends. Dividends are sometimes taxed at this rate and sometimes at your normal income rate, depending on whether they're qualified or not. Capital gains are, if you hold long enough. And capital gains can, of course, still affect your AMT exemption, meaning that if you're in the the AMT phaseout range your marginal rate on even long-term capital gains is about 22% (15% + 25%*28%, since the phaseout applies to normal income).

Of course once you make so much money that the AMT becomes irrelevant your marginal rate on capital gains drops back down to 15%.

Re: Trends that will create demand for an Unconditional Basic Income

#453

Post by mncolinlee » Thu, Jul 11, 2013, 8:27 PM UTC

jerf wrote: post #392

btilly wrote: post #202

Earlier quoted context omitted.

The other problem with "targeted social welfare programs" is that it is very easy to dislike programs that someone else (particularly someone that you don't like) benefits from. A program that you yourself benefit from tends to be less likely to get eroded by future politicians. Compare welfare and social security for a classic example of the difference.

This is my biggest concern with the idea, which I don't see being addressed (checked the entire conversation on this post to date). I don't think having the vote and having the basic income is compatible with each other. Why aren't people going to vote themselves larger basic incomes every year? How can you both have the (modern conception of the) vote, and a basic income at the same time? Attempts to answer this que…

Most of us have a representative system of government, not a purely democratic system. The problem with your thesis is that reality has not presented many examples where deep cuts have not been enacted. Austerity and Social Security cuts are common from elected politicians.

The parent idea reminds me of a certain system advocated by Thomas Paine, the famous American revolutionary who came up with a more liberal ideal of Social Security which offered every child a natural inheritance on coming of age. He suggested this in addition to subsidies for old age. Ironically, this is the same guy Tea Party members love to quote when they disparage taxes.

His pamphlet, Agrarian Justice, is well worth a read.

http://www.ssa.gov/history/paine4.html

Re: Trends that will create demand for an Unconditional Basic Income

#454

Post by jeffdavis » Thu, Jul 11, 2013, 8:28 PM UTC

dragonwriter wrote: post #317

antitrust wrote: post #290

Earlier quoted context omitted.

Another problem is that it might devalue the currency. When most of it is given away, there's decreased competition for it, and thus its value in the market decreases.

> Another problem is that it might devalue the currency. When most of it is given away, there's decreased competition for it, and thus its value in the market decreases. No proposed basic income would give away most of the currency in circulation as BI, which makes that argument somewhat irrelevant.

No proposed scheme plans to give away most of the currency as BI, but some may turn out that way.

The scheme proposed here targets "comfort" for everyone, which certainly could cause inflation.

Re: Trends that will create demand for an Unconditional Basic Income

#455

Post by TeMPOraL » Thu, Jul 11, 2013, 8:29 PM UTC

guard-of-terra wrote: post #439

kokey wrote: post #411

Earlier quoted context omitted.

That's the thing, instead of giving people a universal basic income and distorting the prices we should really keep on striving to make the essentials that people need as cheap as possible.

Which basically means things that do not scale will skyrocket in price. You already see this as prices of education and housing grow decade to decade. Essentials are: bad food that doesn't taste well, bad housing, bad medical care, bad transportation and bad service. That's what Soviet Union consistently delivered to every citizen and while there were vitrually no hungry, unemployed or homeless people, nobody felt ha…

Also, we're talking about world where robots produce those cheap essentials out of soil and solar/nuclear power, leaving many more unemployed competing for ever shrinking pool of jobs that are not done by robots out of free solar/nuclear power.

Basically it's not any kind of a solution, it's exactly where we are headed now.

Re: Trends that will create demand for an Unconditional Basic Income

#456

Post by TeMPOraL » Thu, Jul 11, 2013, 8:32 PM UTC

cheald wrote: post #337

zxcdw wrote: post #313

I don't understand how people oppose unconditional basic income without also opposing the fact that automation decreases the amount of working hours available for a person(or in other words, the amount of jobs ), and thus decreases the amount of income per person, while maintaining productivity stable if not increasing it, thus making all sorts of goods cheaper. Someone enlighten me. These discussions always seem so…

Automation reduces costs and prices, creates new job fields, and permits for specialization. It's been happening since the cotton gin, and is a basic staple of an advancing society. We're able to sit on our butts in our chairs and make our livings punching keys on a little rectangle while staring at another little glowing rectangle because our societies are highly specialized and highly automated, making it economica…

> Automation reduces costs and prices, creates new job fields, and permits for specialization.

Currently automation has reached the point in which it replaces lower-skilled jobs by higher-skilled jobs. Many people who worked in the former will not be able to work in the latter (mostly because it takes years to specialize), so for them, those jobs are as good as gone.

Re: Trends that will create demand for an Unconditional Basic Income

#457

Post by SapphireSun » Thu, Jul 11, 2013, 8:32 PM UTC

lettergram wrote: post #347

SapphireSun wrote: post #291

Earlier quoted context omitted.

300,000,000 people in the US. You give them each 10,000 dollars. That's 3T dollars, or roughly the size of the existing federal budget (~3.5T). US GDP is ~16T. It's a lot, but that's not beyond the pale of possibility, and the poorest people will spend that money nearly instantly, reving the economy and making the world a little bit better for everyone. "If corporations essentially pay their customers (via the govern…

"Money" (or any currency) is just a means of trading one good for another, if there are no goods being transferred via the currency it cannot be considered a currency. That being said, if you simply hand out 3 trillion a year then you would be effectively taxing everyone by (3T/total wealth) then redistributing it does nothing because you've also taxed EVERYONE by that same amount. To follow up my argument: 3T/16T is…

I do agree that it may cause some inflation (I'm not sure how much). I don't think those computations are correct though (3/16 = 18.75, not 25 for example). Inflation is measured as the cost for a basket of goods. Simply giving lots of people more money would not change the cost structure immediately. It would provide a larger consumer pool that companies can compete to server. The effects are complex and it's not immediately clear that inflation would spike to sky high levels, though a rise in inflation does occur when there is more trade because people are getting higher wages. A little bit of inflation is a positive indicator.

However, redistributing definitely does have an economic effect because richer people has an increase propensity to save. When you take 10k that they weren't using and give it to someone poor, that money starts flowing immediately. An analogy would be something like, say you have a lake with some water seeping out from a small waterfall. If you go and take 10,000 liters and put it in a dry lake (ignoring soil absorption :P), that water will start flowing net much faster since you now have two waterfalls going.

I'm not dismissing your inflation argument, I just anticipate that the magnitude of the effect is small (or at least able to be dealt with with monetary policy) compared to the benefit of giving people (especially poor people) some money.

As an aside, part of the reason for doing this is not economic (assuming that inflation does not outpace reasonable technical measures to oppose it). The real question is are we rich enough to afford taking basic care of all of our citizens, regardless of where they started in life? It's a question of justice. We may not have reached that point yet, but I think it's definitely arguable that we have.

You may reach a different conclusion, but ask yourself, if you were teleported outside of time and space, and didn't know if you were going to be rich or poor. What sort of system would you advocate for?

http://en.wikipedia.org/wiki/Veil_of_ignorance

We may not agree on the conclusions, but my position is that we should not let people starve or suffer if we can afford not to. Secondly, we should allow people the ability to choose their life circumstances to the best of their abilities. 10k a year removes many coercive influences and allows them to eat and sleep in safety.

Re: Trends that will create demand for an Unconditional Basic Income

#458

Post by ezxs » Thu, Jul 11, 2013, 8:33 PM UTC

steveklabnik wrote: post #72

ezxs wrote: post #50

Russians tried it with USSR. Every time new technology is introduced everyone gets scared that jobs go away. Over time the level of service and innovation requirements go up providing more jobs for those that adapt. Such as life. Don't make the world what its not. It most likely won't work. :-)

Can you tell me more about basic income in the USSR? The wikipedia page on basic income doesn't mention it: http://en.wikipedia.org/wiki/Basic_income_guarantee#Examples...

Basically the government guaranteed to get you a job with a basic income. All seemed like a good idea "from each according to their ability, to each according to their need" until folks realized that the people deciding basically were the ruling class and the working class now worked out of fear of Gulag instead of financial rewards.

Re: Trends that will create demand for an Unconditional Basic Income

#459

Post by [deleted] » Thu, Jul 11, 2013, 8:33 PM UTC

crazygringo wrote: post #123

dragonwriter wrote: post #93

Earlier quoted context omitted.

> If anything, taxing corporations is regressive No, its not. > the taxes ultimately get passed on to consumers through higher product prices, regardless of their income levels. It increases producer prices which shifts the supply curve to the right, but its pretty self-evident that the effect on actual prices is dependent on price elasticity of demand in the markets for particular products, and that price elasticity…

> but its pretty self-evident that the effect on actual prices is dependent on price elasticity of demand in the markets for particular products Of course, but there's still the "minimum profitability" that a business seeks to have. Suppose three firms compete to sell widget X, and consumers are willing to pay up to $10 for it, but the companies sell it at $5 due to competition (it costs $4 to make and distribute). T…

[deleted]

Re: Trends that will create demand for an Unconditional Basic Income

#460

Post by dasil003 » Thu, Jul 11, 2013, 8:33 PM UTC

jerf wrote: post #392

btilly wrote: post #202

Earlier quoted context omitted.

The other problem with "targeted social welfare programs" is that it is very easy to dislike programs that someone else (particularly someone that you don't like) benefits from. A program that you yourself benefit from tends to be less likely to get eroded by future politicians. Compare welfare and social security for a classic example of the difference.

This is my biggest concern with the idea, which I don't see being addressed (checked the entire conversation on this post to date). I don't think having the vote and having the basic income is compatible with each other. Why aren't people going to vote themselves larger basic incomes every year? How can you both have the (modern conception of the) vote, and a basic income at the same time? Attempts to answer this que…

I think you're overweighting the relative influence BI can exert. Introducing BI as a tiny fraction of GDP does not make existing financial power structures disappear. Existing wealth will still wield the same influence it always has. There will be plenty of lobbyists to push back against corporate tax hikes, there will still be the usual capitalist incentives to start a business and increase production, the American people will still believe in upward mobility and the right of a business owner to make money. In short, I think you're imagining a slippery slope of a policy without any checks and balances where in fact there will be many. I could be wrong of course, but it's really rampant speculation on both our parts because humans don't really have an intuitive or historical understanding of how such a system would actually pan out in practice.

On balance it seems like a better risk than the current welfare and disability systems that dehumanize people and create a perverse incentive not to work in order to survive. If efficiency and automation trends continue some sort of wealth redistribution will become strictly necessary whether that is done through government policy, charity, or revolution. BI for its potential flaws doesn't look so bad compared to the alternatives.