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> A basic income can be funded by taxing bad things... The author is assuming that you can increase revenue by imposing new taxes, but that is rarely true. Tax

by Meekro 11y ago

> A basic income can be funded by taxing bad things... The author is assuming that you can increase revenue by imposing new taxes, but that is rarely true. Tax revenue as a percentage of GDP has been nearly constant for the last 70 years, even as tax policy has fluctuated all over the place[1]. [1] http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...

jessriedel 11y ago
But don't several other countries collect a much higher percentage of GDP? I like your data, but it seems more likely to me that fractional GDP collected is limited by voters than economic limitations of taxation.
- nickff 11y ago
  Most of the countries which collect a higher percentage of GDP do so only at the federal level. If you look at US tax income and include the states, you will see that the collection percentage is more closely comparable to other western countries, and that the total receipts still stay relatively flat despite tax policy changes.
  - spangry 11y ago
    I'm sorry but that's simply false. From the OECD's latest 'Revenue Statistics Publication' (http://www.oecd.org/ctp/tax-policy/revenue-statistics-methodology-guide-and-classification-system.htm http://www.oecd.org/ctp/tax-policy/revenue-statistics-method...): This annual Report presents detailed internationally comparable data on tax revenues of OECD countries for all levels of government... It's like the first sentence in their methodology section. Their 2014 estimates show total tax to GDP ratios of 34 countries that range from 19.5% to 50.9%. They are in no way 'relatively flat'. EDIT: Here's a direct link to the spreadsheet -> http://www.oecd.org/tax/tax-policy/table-a-total-tax-revenue--gdp.htm http://www.oecd.org/tax/tax-policy/table-a-total-tax-revenue...
sparky_z 11y ago
I have difficulty believing that this is some ironclad law of economics without a lot of further study. Does it hold true for other countries? It would certainly be possible to pass laws that decrease tax revenue (just reduce all taxes by 90% across the board). I would guess that this "trend" (untrend?) is at least partly due to the fact that those changes to tax law weren't random, but were passed by politicians who were reacting to contemporary conditions (both economic and political). It's like observing that a driver keeps adjusting the gas pedal but their speed never changes and concluding that it's not possible to change a car's speed using the gas pedal. In reality, the driver is actively adjusting to local conditions (like hills) to maintain a constant speed.
spangry 11y ago
I'm not sure how you can draw any conclusions from that data. The fact that tax to GDP ratios in OECD countries vary anywhere from around 17% to 48% suggests that different tax policies can alter a country's tax take: http://www.oecd.org/newsroom/taxrevenuesstabiliseinoecdcountriesin2010.htm http://www.oecd.org/newsroom/taxrevenuesstabiliseinoecdcount... Taxing 'bad things' is fine, assuming the author means taxing activities that generate negative externalities (https://en.wikipedia.org/wiki/Pigovian_tax https://en.wikipedia.org/wiki/Pigovian_tax). However I doubt that would raise sufficient revenue for a UBI. Most likely you'd have to levy taxes on large, immobile tax bases like consumption and land. Worth noting the cost of a UBI isn't completely additive. In the most extreme form, the cost is partially offset by the abolition of unemployment welfare payments and administration, tax free thresholds, earned income tax credits etc.

by Meekro 11y ago

jessriedel 11y ago

But don't several other countries collect a much higher percentage of GDP? I like your data, but it seems more likely to me that fractional GDP collected is limited by voters than economic limitations of taxation.

nickff 11y ago
Most of the countries which collect a higher percentage of GDP do so only at the federal level. If you look at US tax income and include the states, you will see that the collection percentage is more closely comparable to other western countries, and that the total receipts still stay relatively flat despite tax policy changes.
- spangry 11y ago
  I'm sorry but that's simply false. From the OECD's latest 'Revenue Statistics Publication' (http://www.oecd.org/ctp/tax-policy/revenue-statistics-methodology-guide-and-classification-system.htm http://www.oecd.org/ctp/tax-policy/revenue-statistics-method...): This annual Report presents detailed internationally comparable data on tax revenues of OECD countries for all levels of government... It's like the first sentence in their methodology section. Their 2014 estimates show total tax to GDP ratios of 34 countries that range from 19.5% to 50.9%. They are in no way 'relatively flat'. EDIT: Here's a direct link to the spreadsheet -> http://www.oecd.org/tax/tax-policy/table-a-total-tax-revenue--gdp.htm http://www.oecd.org/tax/tax-policy/table-a-total-tax-revenue...

sparky_z 11y ago

I have difficulty believing that this is some ironclad law of economics without a lot of further study. Does it hold true for other countries? It would certainly be possible to pass laws that decrease tax revenue (just reduce all taxes by 90% across the board). I would guess that this "trend" (untrend?) is at least partly due to the fact that those changes to tax law weren't random, but were passed by politicians who were reacting to contemporary conditions (both economic and political). It's like observing that a driver keeps adjusting the gas pedal but their speed never changes and concluding that it's not possible to change a car's speed using the gas pedal. In reality, the driver is actively adjusting to local conditions (like hills) to maintain a constant speed.

spangry 11y ago

I'm not sure how you can draw any conclusions from that data. The fact that tax to GDP ratios in OECD countries vary anywhere from around 17% to 48% suggests that different tax policies can alter a country's tax take: http://www.oecd.org/newsroom/taxrevenuesstabiliseinoecdcountriesin2010.htm http://www.oecd.org/newsroom/taxrevenuesstabiliseinoecdcount... Taxing 'bad things' is fine, assuming the author means taxing activities that generate negative externalities (https://en.wikipedia.org/wiki/Pigovian_tax https://en.wikipedia.org/wiki/Pigovian_tax). However I doubt that would raise sufficient revenue for a UBI. Most likely you'd have to levy taxes on large, immobile tax bases like consumption and land. Worth noting the cost of a UBI isn't completely additive. In the most extreme form, the cost is partially offset by the abolition of unemployment welfare payments and administration, tax free thresholds, earned income tax credits etc.