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The biggest concern that I have with UBI is how do we avoid the Basic Income Trap? It's pretty widely accepted that we fell prey to the Two Income Trap [1]. If

The biggest concern that I have with UBI is how do we avoid the Basic Income Trap? It's pretty widely accepted that we fell prey to the Two Income Trap [1]. If we institute UBI, how long will it be before a person needs their UBI and another job (or two, or three) just to scrape by? [1] http://www.motherjones.com/politics/2004/11/two-income-trap http://www.motherjones.com/politics/2004/11/two-income-trap

Grishnakh 10y ago
If the UBI isn't set high enough to allow someone to survive, then it by definition is not a "basic income". It has to be set high enough for this. This may require some kind of extra government programs and legislation to do things like 1) make sure enough low-cost housing is available, and maybe 2) help people learn to use it effectively, including maybe moving them to low-cost locations if necessary.
- grahamburger 10y ago
  It's not so much about setting it high enough as keeping it high enough. How do you convince the wealthy and powerful to keep giving up more and more of their income to keep up with inflation so that UBI continues to meet the definition of 'basic income'?
  - Grishnakh 10y ago
    If there's inflation, the wealthy are going to earn more money in absolute dollars (if they don't, that means they're getting poorer). The same tax rate will automatically bring in more money from these people. I don't see the problem. You're making the common mistake of thinking that a given tax rate (as a percentage) equals a fixed amount of revenue, which is just plain wrong. A fixed percentage of a rising amount of income will result in a rising amount of tax revenue.
    - grahamburger 10y ago
      Ok, that's fair - I still see a few problems though. First, if you're right and the wealthy keep making more in absolute dollars and therefore paying more in taxes (IE UBI doesn't make them poorer) then we still have to index the UBI against inflation. And every time UBI goes up, it will be an upstream battle against people who had the same common mistake that you suggest that I made. In other words, in this case at least, perception is reality. Second, what if UBI does make the wealthy less wealthy? Isn't that kind of the point of wealth redistribution? To reduce income inequality?
      - Grishnakh 10y ago
        I don't understand what you're getting at here. Yes, the point of wealth distribution is to reduce income inequality. The UBI achieves that, by taxing high-income people and redistributing it to everyone (in effect redistributing it to the poorer people, because the wealthier people will be paying it all back in taxes). With tax rates fixed, revenue collected will be greater if wealthy peoples' incomes rise, and this will allow the UBI to be indexed up. Why would there be an "upstream battle"? Nothing has to change when the tax rate is the same. What's the problem?
- chillacy 10y ago
  There is an incredible amount of businesses set out to make money from those without steady pay, or who live paycheck to paycheck, which includes some UBI recipients (if they require a large sum today they may borrow money from a payday loan company, for instance, and the interest is insane). One challenge is going to be preventing this from becoming the new form of exploitation. That comes down to education, and there are a lot of americans in debt.
  - Grishnakh 10y ago
    There's two things that can be done here: 1) We could definitely use better education in this country. Kids should be taught in grade/high school how to handle money, personal finance, etc. They used to have something called "home economics" when I was a kid, but it was only for girls and probably concentrated more on doing dishes or something. 2) We need to stop electing Democrats like Hillary Clinton and DWS who are big backers of the payday-loan industry, and enact legislation which severely clamps down on these practices. Interest rates over some decent number (say, 15%) simply shouldn't be allowed, as they're usurious. There's really no reason someone on UBI should ever need a large sum of money. They're not in danger of losing it: that's the whole point of UBI. What would they need a lot of money for, beyond what their monthly (or biweekly, or whatever) UBI check gives them? Maybe a deposit for rent, that's the only thing I can think of. There can probably be some kind of laws or programs set up to handle this kind of thing without letting payday-loan vulture exploit these people. If Democrats actually cared about poor people, they'd already be working on ways of helping them with things like this rather than taking "campaign contributions" from the payday-loan vultures.
    - chillacy 10y ago
      > Kids should be taught in grade/high school how to handle money, personal finance, etc I think that's a pretty swell idea. > There's really no reason someone on UBI should ever need a large sum of money I don't think that's true. The problem is living paycheck to paycheck without savings. UBI adds steady income but if the recipient fails to save, then when large expenses come like bank overdraft fees, medical expenses, and general rainy day stuff, they'll have to take out loans or credit card debt. Which goes back to why education is so important.

Grishnakh 10y ago

If the UBI isn't set high enough to allow someone to survive, then it by definition is not a "basic income". It has to be set high enough for this. This may require some kind of extra government programs and legislation to do things like 1) make sure enough low-cost housing is available, and maybe 2) help people learn to use it effectively, including maybe moving them to low-cost locations if necessary.

grahamburger 10y ago
It's not so much about setting it high enough as keeping it high enough. How do you convince the wealthy and powerful to keep giving up more and more of their income to keep up with inflation so that UBI continues to meet the definition of 'basic income'?
- Grishnakh 10y ago
  If there's inflation, the wealthy are going to earn more money in absolute dollars (if they don't, that means they're getting poorer). The same tax rate will automatically bring in more money from these people. I don't see the problem. You're making the common mistake of thinking that a given tax rate (as a percentage) equals a fixed amount of revenue, which is just plain wrong. A fixed percentage of a rising amount of income will result in a rising amount of tax revenue.
  - grahamburger 10y ago
    Ok, that's fair - I still see a few problems though. First, if you're right and the wealthy keep making more in absolute dollars and therefore paying more in taxes (IE UBI doesn't make them poorer) then we still have to index the UBI against inflation. And every time UBI goes up, it will be an upstream battle against people who had the same common mistake that you suggest that I made. In other words, in this case at least, perception is reality. Second, what if UBI does make the wealthy less wealthy? Isn't that kind of the point of wealth redistribution? To reduce income inequality?
    - Grishnakh 10y ago
      I don't understand what you're getting at here. Yes, the point of wealth distribution is to reduce income inequality. The UBI achieves that, by taxing high-income people and redistributing it to everyone (in effect redistributing it to the poorer people, because the wealthier people will be paying it all back in taxes). With tax rates fixed, revenue collected will be greater if wealthy peoples' incomes rise, and this will allow the UBI to be indexed up. Why would there be an "upstream battle"? Nothing has to change when the tax rate is the same. What's the problem?
chillacy 10y ago
There is an incredible amount of businesses set out to make money from those without steady pay, or who live paycheck to paycheck, which includes some UBI recipients (if they require a large sum today they may borrow money from a payday loan company, for instance, and the interest is insane). One challenge is going to be preventing this from becoming the new form of exploitation. That comes down to education, and there are a lot of americans in debt.
- Grishnakh 10y ago
  There's two things that can be done here: 1) We could definitely use better education in this country. Kids should be taught in grade/high school how to handle money, personal finance, etc. They used to have something called "home economics" when I was a kid, but it was only for girls and probably concentrated more on doing dishes or something. 2) We need to stop electing Democrats like Hillary Clinton and DWS who are big backers of the payday-loan industry, and enact legislation which severely clamps down on these practices. Interest rates over some decent number (say, 15%) simply shouldn't be allowed, as they're usurious. There's really no reason someone on UBI should ever need a large sum of money. They're not in danger of losing it: that's the whole point of UBI. What would they need a lot of money for, beyond what their monthly (or biweekly, or whatever) UBI check gives them? Maybe a deposit for rent, that's the only thing I can think of. There can probably be some kind of laws or programs set up to handle this kind of thing without letting payday-loan vulture exploit these people. If Democrats actually cared about poor people, they'd already be working on ways of helping them with things like this rather than taking "campaign contributions" from the payday-loan vultures.
  - chillacy 10y ago
    > Kids should be taught in grade/high school how to handle money, personal finance, etc I think that's a pretty swell idea. > There's really no reason someone on UBI should ever need a large sum of money I don't think that's true. The problem is living paycheck to paycheck without savings. UBI adds steady income but if the recipient fails to save, then when large expenses come like bank overdraft fees, medical expenses, and general rainy day stuff, they'll have to take out loans or credit card debt. Which goes back to why education is so important.