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If, in your definition, basic income is neutral on what the marginal tax rate is, then your statement "We already know how to design a program that won't discou

If, in your definition, basic income is neutral on what the marginal tax rate is, then your statement "We already know how to design a program that won't discourage work. It's called a basic income." doesn't make sense. You are trying to have it both ways, making claims about basic income, but when I challenge one, redefining basic income to be broader, while ignoring the fact that the original claim only makes sense for the narrow definition. See my other post for answers to the rest.

AnthonyMouse 11y ago
> If, in your definition, basic income is neutral on what the marginal tax rate is, then your statement "We already know how to design a program that won't discourage work. It's called a basic income." doesn't make sense. Of course it does, because it's in the context of receiving the benefit. Since receiving the benefit is unconditional, it doesn't cost you money/benefits to take a job or work more hours, unlike with means tested programs which do exactly that. How the government comes up with the money to pay out the benefit is a separate question because you can do it in any number of ways. Imagine the government pays for the basic income by conquering foreign lands and seizing their resources. Unambiguously no disincentive to work for all the citizens. Obviously in the real world the money is going to come from taxes. But taxes are separate. All transfer programs require taxes, on top of the effects created by the program itself. Because the method of taxation that has zero effect on the incentive to work is the mirror image of the basic income: Everyone pays the same fixed dollar amount in taxes regardless of income. Using that method of taxation to fund a basic income converts it from a transfer payment to a no-op. So if your point is that you cannot have a transfer payment without creating a disincentive to work for someone, that is correct, because that is what a transfer payment is: In order to take from those with more and give to those with less, you have to condition at least one of the taking or the giving on the existence of some threshold level of wealth. But the difference between the program and the tax that pays for it is still quote important, because the people they affect are not necessarily the same people. For example, suppose you want to fund some transfer program using a tax exclusively paid by the top 1% of income earners. Everyone in the bottom 99% therefore does not pay the tax at all and is not directly affected by it. But now the separate choice comes between whether the program is a traditional means tested welfare program or a basic income. The means tested program will provide a disincentive for the 99% to work because the government will claw back some significant portion of the money they earn; the basic income will not, even inclusive of its funding source, because it is not funded by them.

AnthonyMouse 11y ago

> If, in your definition, basic income is neutral on what the marginal tax rate is, then your statement "We already know how to design a program that won't discourage work. It's called a basic income." doesn't make sense. Of course it does, because it's in the context of receiving the benefit. Since receiving the benefit is unconditional, it doesn't cost you money/benefits to take a job or work more hours, unlike with means tested programs which do exactly that. How the government comes up with the money to pay out the benefit is a separate question because you can do it in any number of ways. Imagine the government pays for the basic income by conquering foreign lands and seizing their resources. Unambiguously no disincentive to work for all the citizens. Obviously in the real world the money is going to come from taxes. But taxes are separate. All transfer programs require taxes, on top of the effects created by the program itself. Because the method of taxation that has zero effect on the incentive to work is the mirror image of the basic income: Everyone pays the same fixed dollar amount in taxes regardless of income. Using that method of taxation to fund a basic income converts it from a transfer payment to a no-op. So if your point is that you cannot have a transfer payment without creating a disincentive to work for someone, that is correct, because that is what a transfer payment is: In order to take from those with more and give to those with less, you have to condition at least one of the taking or the giving on the existence of some threshold level of wealth. But the difference between the program and the tax that pays for it is still quote important, because the people they affect are not necessarily the same people. For example, suppose you want to fund some transfer program using a tax exclusively paid by the top 1% of income earners. Everyone in the bottom 99% therefore does not pay the tax at all and is not directly affected by it. But now the separate choice comes between whether the program is a traditional means tested welfare program or a basic income. The means tested program will provide a disincentive for the 99% to work because the government will claw back some significant portion of the money they earn; the basic income will not, even inclusive of its funding source, because it is not funded by them.