6 ms·

$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US federal government. Something to keep in mind when discussing this topic.

by harryh 11y ago

sandworm101 11y ago
Or, in more relevant terms, 3.2T is about 1/5th of US GPD (~17Y).
dmix 11y ago
Does your "US population" number include people <18yrs old, people receiving social security, and people who volunteer to not receive their basic income payment? They should be exempt from your calculation...
- harryh 11y ago
  Yes. Since you brought it up I can provide those numbers too: Total US population ~= 319M Under 18 population ~= 73M Over 65 population ~= 46M --------------------------- Remainder ~= 200M No data on volunteering not to receive, though I don't know many people who pay more taxes than they're required to so I'm guessing that number would be pretty small.
  - dmix 11y ago
    So $2T not $3.2T. When compared to social security, it's not that bad: > In 2015, over 59 million Americans will receive almost $870 billion in Social Security benefits. Therefore basic income would be about 2.3x the cost of social security but 3.4x as many people would benefit.
    - AnimalMuppet 11y ago
      I think that social security is the wrong thing to compare it to. Try social security + unemployment + food stamps + aid to families with dependent children + ...
  - deleted 11y ago
    [deleted]
bryanlarsen 11y ago
Basic income is generally designed to be revenue neutral on the middle class. In other words, you send them a cheque for $10,000 and increase their taxes by ~$10,000. So your cost is off by about an order of magnitude. That you get from increasing taxes on the rich and from cost savings for social security and other welfare benefits.
samstave 11y ago
But that number is misleading. I have a spouse and three children. Does that mean we all will get 10K/yr? I have had a different thought on this in the past; Every child born should have $10K put into an account in their name on the day they are born. It will gain interest and grow until they are 18, then they get the money. And as an adult after 21, they are taxed at some rate to pay back the initial 10K that will then be deposited into the account of some other new baby.
- bobby_9x 11y ago
  What will stop people from having multiple kids, just to get the $10K/child windfall?
  - samstave 11y ago
    Only the social security number holder at 18 has access to the funds. I don't think it would be too hard to include methods to prevent abuse. I may too idealistic.
  - jdmichal 11y ago
    Because the cost of raising a child to 18 years of age far outweighs the $10k + interest?
  - Fargren 11y ago
    An increase in income is generally tied to having less children, not more. I read a study (which I can't find right now) that studied the effect of policies that gave income based on the amount of children, and there is no increase on the amount of children people have. Argentina, for instance, has a program called Asignación Universal Por Hijo that (roughly) pays you for each child you have, provided he goes to school.
- Zikes 11y ago
  How much would that $10k grow in 18 years? Bank of America's "Platinum Honors" interest rate is 0.06%[1], and over 18 years of compounding interest that's only $10,108.55 unless I've messed up my math. [1] https://www.bankofamerica.com/deposits/bank-account-interest-rates.go https://www.bankofamerica.com/deposits/bank-account-interest...
fijal 11y ago
Federal poverty level is 15930 for a two people family unit, that gives 8000 USD/person/year (slightly below 10k), * 300 mln is 2.4trln. Total income from social security tax (assuming you're replacing all social security with flat just-out-of-poverty basic income) comes to 1.1trln. So definitely short, but assuming 4% annual growth (figure reverse engineered from budget predictions in the futute), that gives us 20 years when in real terms we would be able to fund it entirely from social security tax. Sources: http://www.usgovernmentrevenue.com/federal_budget_detail http://www.usgovernmentrevenue.com/federal_budget_detail
- harryh 11y ago
  Probably the federal poverty level will be higher than $15,930 in 20 years. For reference, it grew by 59% in the last 20 years.
  - fijal 11y ago
    in real terms (inflation adjusted?) The change from 2014 to 2015 was 11670 -> 11770 so actually below inflation
    - harryh 11y ago
      Of course. But you were also talking in nominal (not inflation adjusted) returns when you said that 20 years of growth in Social Security income could fund a basic income. You can inflation adjust neither or both sides of the equation but not just one which is what you were doing.
      - fijal 11y ago
        4% GDP growth year-on-year while a bit on the wishy side is not THAT optimistic of an assumption. On the other hand, 59% in 20 years of moving poverty line is essentially just accounting for the inflation. It's true that the budget is not inflation adjusted, but I think 3-4% GDP growth on average is achievable (3 would push the limit quite a few years in the future of course)
deleted 11y ago
[deleted]
drabiega 11y ago
It's still quite a lot of money, but I think the basic assumption with a guaranteed income is that it would be accompanied by a tax increase such that net income is neutral for some percentage of the population. Taking the extreme example where no one's net income is decreased and people below median get the full $10k net, you've already halved that number. I think most formulations of actually paying for such a guaranteed income would include some degree of reduction as you approach median and increased taxes at the high end of the income spectrum, further reducing the cost. As mentioned exhaustively, you also can subtract the cost of many of the pre-existing social programs because they get replaced by the guaranteed income.
dsp1234 11y ago
Note that the about 23% of the population is under 18 (possibly zero or reduced BI), and 14.5% is 65 or older (possibly offset by SS). Also, since the census is tasked with counting all people in the united states, it also includes non-citizen long-term visitors and illegal (or undocumented) immigrants. So it's not quite as simple as latest census count * 10k. It's still quite a lot though.
- harryh 11y ago
  Indeed you are correct! I was just tossing that out as a starting point so that people keep in mind the magnitude of the question.
xenadu02 11y ago
Except almost all of that money will be immediately spent by the recipients, greatly accelerating economic activity. It should provide quite a boon to local entities and the federal government through taxes. Not to mention the various businesses who will suddenly have more customers with money to spend. Economics is not a zero-sum game and trying to treat it as one will always lead you astray. P.S. If total US household income was 13 trillion and we assume that the top 1% took home half of that we can just tax the uber-super-mega rich at 50% and pay for a basic income for every man, woman, and child in the US. I'm also willing to bet that those rich people will end up better off as the resulting economic spending boom circulates through the economy and ends up back in their pockets. If current trends of automation continue there simply won't be many jobs (Foxconn is deploying a million robots right now to replace "cheap" Chinese workers). How long do you think society will last under those circumstances? Makes a 50% tax look like a bargain.

$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US federal government. Something to keep in mind when discussing this topic.

by harryh 11y ago

$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US federal government. Something to keep in mind when discussing this topic.

sandworm101 11y ago

Or, in more relevant terms, 3.2T is about 1/5th of US GPD (~17Y).

dmix 11y ago

Does your "US population" number include people <18yrs old, people receiving social security, and people who volunteer to not receive their basic income payment? They should be exempt from your calculation...

harryh 11y ago
Yes. Since you brought it up I can provide those numbers too: Total US population ~= 319M Under 18 population ~= 73M Over 65 population ~= 46M --------------------------- Remainder ~= 200M No data on volunteering not to receive, though I don't know many people who pay more taxes than they're required to so I'm guessing that number would be pretty small.
- dmix 11y ago
  So $2T not $3.2T. When compared to social security, it's not that bad: > In 2015, over 59 million Americans will receive almost $870 billion in Social Security benefits. Therefore basic income would be about 2.3x the cost of social security but 3.4x as many people would benefit.
  - AnimalMuppet 11y ago
    I think that social security is the wrong thing to compare it to. Try social security + unemployment + food stamps + aid to families with dependent children + ...
- deleted 11y ago
  [deleted]

bryanlarsen 11y ago

Basic income is generally designed to be revenue neutral on the middle class. In other words, you send them a cheque for $10,000 and increase their taxes by ~$10,000. So your cost is off by about an order of magnitude. That you get from increasing taxes on the rich and from cost savings for social security and other welfare benefits.

samstave 11y ago

But that number is misleading. I have a spouse and three children. Does that mean we all will get 10K/yr? I have had a different thought on this in the past; Every child born should have $10K put into an account in their name on the day they are born. It will gain interest and grow until they are 18, then they get the money. And as an adult after 21, they are taxed at some rate to pay back the initial 10K that will then be deposited into the account of some other new baby.

bobby_9x 11y ago
What will stop people from having multiple kids, just to get the $10K/child windfall?
- samstave 11y ago
  Only the social security number holder at 18 has access to the funds. I don't think it would be too hard to include methods to prevent abuse. I may too idealistic.
- jdmichal 11y ago
  Because the cost of raising a child to 18 years of age far outweighs the $10k + interest?
- Fargren 11y ago
  An increase in income is generally tied to having less children, not more. I read a study (which I can't find right now) that studied the effect of policies that gave income based on the amount of children, and there is no increase on the amount of children people have. Argentina, for instance, has a program called Asignación Universal Por Hijo that (roughly) pays you for each child you have, provided he goes to school.
Zikes 11y ago
How much would that $10k grow in 18 years? Bank of America's "Platinum Honors" interest rate is 0.06%[1], and over 18 years of compounding interest that's only $10,108.55 unless I've messed up my math. [1] https://www.bankofamerica.com/deposits/bank-account-interest-rates.go https://www.bankofamerica.com/deposits/bank-account-interest...

fijal 11y ago

Federal poverty level is 15930 for a two people family unit, that gives 8000 USD/person/year (slightly below 10k), * 300 mln is 2.4trln. Total income from social security tax (assuming you're replacing all social security with flat just-out-of-poverty basic income) comes to 1.1trln. So definitely short, but assuming 4% annual growth (figure reverse engineered from budget predictions in the futute), that gives us 20 years when in real terms we would be able to fund it entirely from social security tax. Sources: http://www.usgovernmentrevenue.com/federal_budget_detail http://www.usgovernmentrevenue.com/federal_budget_detail

harryh 11y ago
Probably the federal poverty level will be higher than $15,930 in 20 years. For reference, it grew by 59% in the last 20 years.
- fijal 11y ago
  in real terms (inflation adjusted?) The change from 2014 to 2015 was 11670 -> 11770 so actually below inflation
  - harryh 11y ago
    Of course. But you were also talking in nominal (not inflation adjusted) returns when you said that 20 years of growth in Social Security income could fund a basic income. You can inflation adjust neither or both sides of the equation but not just one which is what you were doing.
    - fijal 11y ago
      4% GDP growth year-on-year while a bit on the wishy side is not THAT optimistic of an assumption. On the other hand, 59% in 20 years of moving poverty line is essentially just accounting for the inflation. It's true that the budget is not inflation adjusted, but I think 3-4% GDP growth on average is achievable (3 would push the limit quite a few years in the future of course)

deleted 11y ago

[deleted]

drabiega 11y ago

It's still quite a lot of money, but I think the basic assumption with a guaranteed income is that it would be accompanied by a tax increase such that net income is neutral for some percentage of the population. Taking the extreme example where no one's net income is decreased and people below median get the full $10k net, you've already halved that number. I think most formulations of actually paying for such a guaranteed income would include some degree of reduction as you approach median and increased taxes at the high end of the income spectrum, further reducing the cost. As mentioned exhaustively, you also can subtract the cost of many of the pre-existing social programs because they get replaced by the guaranteed income.

dsp1234 11y ago

Note that the about 23% of the population is under 18 (possibly zero or reduced BI), and 14.5% is 65 or older (possibly offset by SS). Also, since the census is tasked with counting all people in the united states, it also includes non-citizen long-term visitors and illegal (or undocumented) immigrants. So it's not quite as simple as latest census count * 10k. It's still quite a lot though.

harryh 11y ago
Indeed you are correct! I was just tossing that out as a starting point so that people keep in mind the magnitude of the question.

xenadu02 11y ago

Except almost all of that money will be immediately spent by the recipients, greatly accelerating economic activity. It should provide quite a boon to local entities and the federal government through taxes. Not to mention the various businesses who will suddenly have more customers with money to spend. Economics is not a zero-sum game and trying to treat it as one will always lead you astray. P.S. If total US household income was 13 trillion and we assume that the top 1% took home half of that we can just tax the uber-super-mega rich at 50% and pay for a basic income for every man, woman, and child in the US. I'm also willing to bet that those rich people will end up better off as the resulting economic spending boom circulates through the economy and ends up back in their pockets. If current trends of automation continue there simply won't be many jobs (Foxconn is deploying a million robots right now to replace "cheap" Chinese workers). How long do you think society will last under those circumstances? Makes a 50% tax look like a bargain.