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In the blog post I cited, I only compared Basic Income to a Basic Job. I left existing welfare out of it. The marginal utility changes from working vs not work

In the blog post I cited, I only compared Basic Income to a Basic Job. I left existing welfare out of it. The marginal utility changes from working vs not working in a BJ scenario are higher than in a BI scenario, almost by definition. Do you disagree that Utility(No Job, no money) < Utility(No job, money)? BI would have high income people paying somewhat higher marginal rates (but not necessarily higher taxes net of BI because they would receive the BI)... More words. Still no arithmetic. Why are BI proponents so averse to actually crunching numbers?

AnthonyMouse 10y ago
> The marginal utility changes from working vs not working in a BJ scenario are higher than in a BI scenario, almost by definition. Do you disagree that Utility(No Job, no money) < Utility(No job, money)? That isn't the interesting question for a basic job. If you replace existing welfare with a basic job then the utility function for working is a binary value which asks if you want to starve to death. You can't actually say no. But most of the basic jobs are going to be makework jobs with minimal economic value. Things that have economic utility approximately equal to (and possibly less than) sitting on your couch and watching Netflix. The real question with the basic job is whether people will pick the makework basic job over an actually productive real job. The relevant utility function for a basic job is utility(Basic Job, $10,000) vs. utility(Real Job, $10,000), the equivalent of which for the basic income is utility(No Job, $10,000) vs. utility(Basic Income + Real Job, $20,000). But then the basic job falls on its face because people will too often choose the basic job which is easier to get, has more stability, may be easier to do, etc. The Basic Income doesn't have those problems because in that case the income from the Real Job supplements the Basic Income instead of replacing it, so you get compensated for the amount that getting a real job is worse than not getting one. A basic income also does a much better thing in the case where people choose not to work for a private business. In the basic job case that person is digging ditches and filling them back in, whereas in the basic income case it can be taking care of their children or writing open source software or doing investigative journalism without a wealthy patron -- choices that are socially beneficial but the basic job doesn't give you. > More words. Still no arithmetic. Why are BI proponents so averse to actually crunching numbers? The math and the words both mean the same thing. You want math, fine. Suppose the economy is full of Adams, Betties and Charlies in equal numbers. In the hypothetical existing system there is a progressive income tax where you pay nothing up to $50,000 and 20% thereafter. Adams make $20,000, pay no taxes and receive $6,000 in food/housing government assistance which the government withdraws at a rate of $.80/$1 if the Adam were to make more money. Betties make $30,000, pay no taxes, are not eligible for any of the food/housing benefits Adams get but receive $4,000 in government college assistance which the government withdraws at a rate of $.50/$1 if the Betty were to make more money. Charlies make $100,000, pay $10,000 in taxes (20% on everything over $50,000) and receive no government benefits. Now we throw away the existing welfare and tax system and replace it with a $10,000/year basic income and a flat tax of 20%. Adams make $20,000 but now receive a $10,000 BI and pay $4,000 (20% of $20K) in taxes. Their net transfers from the government are still $6,000 but now if they make another dollar the government takes 20% instead of 80%. Betties make $30,000 but now receive a $10,000 BI and pay $6,000 (20% of $30K) in taxes. Their net transfers from the government are still $4,000 but now if they make another dollar the government takes 20% instead of 50%. Charlies make $100,000 but now receive a $10,000 BI and pay $20,000 (20% of $100K) in taxes. Their net transfers from the government are still -$10,000 and their marginal tax rate is still 20%.
- yummyfajitas 10y ago
  But most of the basic jobs are going to be makework jobs with minimal economic value. Things that have economic utility approximately equal to (and possibly less than) sitting on your couch and watching Netflix. Really? Fixing our crumbling infrastructure isn't valuable? Providing childcare to working mothers is useless? Glad to know there is nothing useful the govt can possibly do with more labor. But then the basic job falls on its face because people will too often choose the basic job which is easier to get, has more stability, may be easier to do, etc. This can be resolved by making BJ suck and pay below min wage. The Basic Income doesn't have those problems because in that case the income from the Real Job supplements the Basic Income instead of replacing it, so you get compensated for the amount that getting a real job is worse than not getting one. On the other hand, you seem to be ignoring the third option: watch TV all day while collecting money. We already know that free money (typically in the form of welfare and unemployment) induces this behavior. As for the arithmetic, the question is this: ...BI is far and far more expensive than unemployment benefit: BI is also paid to people who work. Maybe some BI advocate should try to convince me but to me it looks like this will far outset the advantage above. Your calculations seem to work in your hypothetical society. Do they work on something approximating reality?
  - AnthonyMouse 10y ago
    > Really? Fixing our crumbling infrastructure isn't valuable? Building infrastructure isn't unskilled labor so can't be used as a basic job. Moreover, the fact that the government sometimes needs to hire people to do things doesn't mean they can't do that but only when things actually need doing, and then independently have a basic income. > Providing childcare to working mothers is useless? This is what I'm talking about. Let's take some mothers who need to provide for their children and give them jobs digging ditches and filling them back in, then pay some strangers to watch their children while they're doing it. Might it be better to allow mothers to be paid when they take care of their own children? > Glad to know there is nothing useful the govt can possibly do with more labor. This is the most basic flaw in the basic job. The government is not qualified to decide this. It's the fallacy of the centrally planned economy that the government is better at allocating labor than individuals. > This can be resolved by making BJ suck and pay below min wage. In which case you can't give people jobs doing economically productive things because you have to give them jobs that are more demeaning and loathsome than jobs doing economically productive things, and then they can't actually live on wages below minimum wage so you still need the existing welfare system. > On the other hand, you seem to be ignoring the third option: watch TV all day while collecting money. We already know that free money (typically in the form of welfare and unemployment) induces this behavior. ...when getting a job causes you to lose the welfare or unemployment benefits. > As for the arithmetic, the question is this: ...BI is far and far more expensive than unemployment benefit: BI is also paid to people who work. Maybe some BI advocate should try to convince me but to me it looks like this will far outset the advantage above. If the average person pays $10,000 more in taxes to fund a basic income and then receives the $10,000 basic income, it didn't cost them $10,000, it's just a no-op. > Your calculations seem to work in your hypothetical society. Do they work on something approximating reality? Please specify what part of the calculations you find unrealistic. Obviously the numbers there are chosen to balance exactly so that nobody loses or gains anything and in practice throwing out a huge system with complicated rules and then replacing it with something simpler is going to have winners and losers. But the general principle that wealthier people pay more taxes than they receive benefits and poorer people receive more benefits than they pay taxes will continue to hold and the result will be lower marginal tax rates on effectively everyone (or, if BI is large enough that the new system is more redistributive than the existing one, everyone other than high income people).

AnthonyMouse 10y ago

> The marginal utility changes from working vs not working in a BJ scenario are higher than in a BI scenario, almost by definition. Do you disagree that Utility(No Job, no money) < Utility(No job, money)? That isn't the interesting question for a basic job. If you replace existing welfare with a basic job then the utility function for working is a binary value which asks if you want to starve to death. You can't actually say no. But most of the basic jobs are going to be makework jobs with minimal economic value. Things that have economic utility approximately equal to (and possibly less than) sitting on your couch and watching Netflix. The real question with the basic job is whether people will pick the makework basic job over an actually productive real job. The relevant utility function for a basic job is utility(Basic Job, $10,000) vs. utility(Real Job, $10,000), the equivalent of which for the basic income is utility(No Job, $10,000) vs. utility(Basic Income + Real Job, $20,000). But then the basic job falls on its face because people will too often choose the basic job which is easier to get, has more stability, may be easier to do, etc. The Basic Income doesn't have those problems because in that case the income from the Real Job supplements the Basic Income instead of replacing it, so you get compensated for the amount that getting a real job is worse than not getting one. A basic income also does a much better thing in the case where people choose not to work for a private business. In the basic job case that person is digging ditches and filling them back in, whereas in the basic income case it can be taking care of their children or writing open source software or doing investigative journalism without a wealthy patron -- choices that are socially beneficial but the basic job doesn't give you. > More words. Still no arithmetic. Why are BI proponents so averse to actually crunching numbers? The math and the words both mean the same thing. You want math, fine. Suppose the economy is full of Adams, Betties and Charlies in equal numbers. In the hypothetical existing system there is a progressive income tax where you pay nothing up to $50,000 and 20% thereafter. Adams make $20,000, pay no taxes and receive $6,000 in food/housing government assistance which the government withdraws at a rate of $.80/$1 if the Adam were to make more money. Betties make $30,000, pay no taxes, are not eligible for any of the food/housing benefits Adams get but receive $4,000 in government college assistance which the government withdraws at a rate of $.50/$1 if the Betty were to make more money. Charlies make $100,000, pay $10,000 in taxes (20% on everything over $50,000) and receive no government benefits. Now we throw away the existing welfare and tax system and replace it with a $10,000/year basic income and a flat tax of 20%. Adams make $20,000 but now receive a $10,000 BI and pay $4,000 (20% of $20K) in taxes. Their net transfers from the government are still $6,000 but now if they make another dollar the government takes 20% instead of 80%. Betties make $30,000 but now receive a $10,000 BI and pay $6,000 (20% of $30K) in taxes. Their net transfers from the government are still $4,000 but now if they make another dollar the government takes 20% instead of 50%. Charlies make $100,000 but now receive a $10,000 BI and pay $20,000 (20% of $100K) in taxes. Their net transfers from the government are still -$10,000 and their marginal tax rate is still 20%.

yummyfajitas 10y ago
But most of the basic jobs are going to be makework jobs with minimal economic value. Things that have economic utility approximately equal to (and possibly less than) sitting on your couch and watching Netflix. Really? Fixing our crumbling infrastructure isn't valuable? Providing childcare to working mothers is useless? Glad to know there is nothing useful the govt can possibly do with more labor. But then the basic job falls on its face because people will too often choose the basic job which is easier to get, has more stability, may be easier to do, etc. This can be resolved by making BJ suck and pay below min wage. The Basic Income doesn't have those problems because in that case the income from the Real Job supplements the Basic Income instead of replacing it, so you get compensated for the amount that getting a real job is worse than not getting one. On the other hand, you seem to be ignoring the third option: watch TV all day while collecting money. We already know that free money (typically in the form of welfare and unemployment) induces this behavior. As for the arithmetic, the question is this: ...BI is far and far more expensive than unemployment benefit: BI is also paid to people who work. Maybe some BI advocate should try to convince me but to me it looks like this will far outset the advantage above. Your calculations seem to work in your hypothetical society. Do they work on something approximating reality?
- AnthonyMouse 10y ago
  > Really? Fixing our crumbling infrastructure isn't valuable? Building infrastructure isn't unskilled labor so can't be used as a basic job. Moreover, the fact that the government sometimes needs to hire people to do things doesn't mean they can't do that but only when things actually need doing, and then independently have a basic income. > Providing childcare to working mothers is useless? This is what I'm talking about. Let's take some mothers who need to provide for their children and give them jobs digging ditches and filling them back in, then pay some strangers to watch their children while they're doing it. Might it be better to allow mothers to be paid when they take care of their own children? > Glad to know there is nothing useful the govt can possibly do with more labor. This is the most basic flaw in the basic job. The government is not qualified to decide this. It's the fallacy of the centrally planned economy that the government is better at allocating labor than individuals. > This can be resolved by making BJ suck and pay below min wage. In which case you can't give people jobs doing economically productive things because you have to give them jobs that are more demeaning and loathsome than jobs doing economically productive things, and then they can't actually live on wages below minimum wage so you still need the existing welfare system. > On the other hand, you seem to be ignoring the third option: watch TV all day while collecting money. We already know that free money (typically in the form of welfare and unemployment) induces this behavior. ...when getting a job causes you to lose the welfare or unemployment benefits. > As for the arithmetic, the question is this: ...BI is far and far more expensive than unemployment benefit: BI is also paid to people who work. Maybe some BI advocate should try to convince me but to me it looks like this will far outset the advantage above. If the average person pays $10,000 more in taxes to fund a basic income and then receives the $10,000 basic income, it didn't cost them $10,000, it's just a no-op. > Your calculations seem to work in your hypothetical society. Do they work on something approximating reality? Please specify what part of the calculations you find unrealistic. Obviously the numbers there are chosen to balance exactly so that nobody loses or gains anything and in practice throwing out a huge system with complicated rules and then replacing it with something simpler is going to have winners and losers. But the general principle that wealthier people pay more taxes than they receive benefits and poorer people receive more benefits than they pay taxes will continue to hold and the result will be lower marginal tax rates on effectively everyone (or, if BI is large enough that the new system is more redistributive than the existing one, everyone other than high income people).