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Well, that is how we quickly go to the argument of "Lets replace the complicated social security system with basic livable wage being handed out to ever-one." c

by a-saleh 10y ago

Well, that is how we quickly go to the argument of "Lets replace the complicated social security system with basic livable wage being handed out to ever-one." comoonlz known as universal basic income. If one looks at it from economic-theory or game-theory perspective it sounds like a solution to many problems, nobody knows yet if that would work in practice though, especially on large scale. As far as I know, open questions that remain are: - Will we be able to afford it? Sort of back-of-the-napkin calculations can show, that if we introduced i.e UBI in Germany for everybody (80 mil) on a level of minimum wage (1473 E ?), it would eat their federal budget for Ministry of Health and Social Security and Ministry of Economics and Labour - What would be the unintended consequences? (i.e on small scale uneployment rose by single digits, but we can't really tell what will happen on country scale)

eru 10y ago
We could raise taxes much higher with less economic impact, by solely taxing land rents. (Land prices go up, as other taxes go down, as you can see on the Swiss/German border. Taxing land rents has no economic deadweight loss, since the supply of land is fixed.)
- froogle 10y ago
  Not entirely true; the disadvantage to land taxes is that they discourage prospecting and finding things like oil. You can ameliorate that in a number of ways, but land taxes aren't entirely without their problems.
  - eru 10y ago
    That's an interesting point. And yes, it's entirely fixable. At the most crude, you could separate natural resources from the rest of the land rights, people already do that. By the way if memory serves right Germany, which doesn't have general land taxes, already doesn't let you own mineral resources below your land by default. Would be interesting to see what effect that regulation already has on people prospecting.
drabiega 10y ago
>As far as I know, open questions that remain are: >- Will we be able to afford it? Sort of back-of-the-napkin calculations can show, that if we introduced i.e UBI in Germany for everybody (80 mil) on a level of minimum wage (1473 E ?), it would eat their federal budget for Ministry of Health and Social Security and Ministry of Economics and Labour In what way is that an unanswered question? Every single debate about this has any number of people pointing out that you would adjust taxes so that for most people the UBI + tax increases would be net neutral with perhaps slightly higher marginal taxes at the top. Every single discussion about UBI also somehow has any number of people pretending this point has never been raised and insisting that the cost of UBI will be UBI_Amount * Population. This isn't even taking into account the reduction in existing social programs which would presumably be replaced by UBI.

by a-saleh 10y ago

eru 10y ago

We could raise taxes much higher with less economic impact, by solely taxing land rents. (Land prices go up, as other taxes go down, as you can see on the Swiss/German border. Taxing land rents has no economic deadweight loss, since the supply of land is fixed.)

froogle 10y ago
Not entirely true; the disadvantage to land taxes is that they discourage prospecting and finding things like oil. You can ameliorate that in a number of ways, but land taxes aren't entirely without their problems.
- eru 10y ago
  That's an interesting point. And yes, it's entirely fixable. At the most crude, you could separate natural resources from the rest of the land rights, people already do that. By the way if memory serves right Germany, which doesn't have general land taxes, already doesn't let you own mineral resources below your land by default. Would be interesting to see what effect that regulation already has on people prospecting.

drabiega 10y ago

>As far as I know, open questions that remain are: >- Will we be able to afford it? Sort of back-of-the-napkin calculations can show, that if we introduced i.e UBI in Germany for everybody (80 mil) on a level of minimum wage (1473 E ?), it would eat their federal budget for Ministry of Health and Social Security and Ministry of Economics and Labour In what way is that an unanswered question? Every single debate about this has any number of people pointing out that you would adjust taxes so that for most people the UBI + tax increases would be net neutral with perhaps slightly higher marginal taxes at the top. Every single discussion about UBI also somehow has any number of people pretending this point has never been raised and insisting that the cost of UBI will be UBI_Amount * Population. This isn't even taking into account the reduction in existing social programs which would presumably be replaced by UBI.