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> I'm not saying the study is a bad thing, but if basic income were implemented in an entire community, it would have a different effect than just a small slice

> I'm not saying the study is a bad thing, but if basic income were implemented in an entire community, it would have a different effect than just a small slice of a community. In particular, wouldn't it just raise the price of housing and rent? There's only so much land and housing to go around, and if you're competing with everyone else to buy a house or rent an apartment, if everyone else can afford to pay that much more, then the prices would go up. What you are saying basically is that inflation will cancel out all effects of the minimum income. You are forgetting that the minimum income does not have the same relative impact on all incomes because people earn different amounts of money. If the minimum income is 1000 Euro a month, and if everybody earned 10000 Euro a month, then yes, we would see a 10% income increase for everybody and a subsequent 10% inflation. But some people earn only 2000 Euro a month, and others earn 20000. That means that for some, it is a 50% raise in income, and for others it is 5%. The inflation will lie somewhere in between - more than 5% but less than 50%. In effect, the minimum income decreases the income gap. It lowers the income of the rich via inflation and it increases the effective income of the poor by raising their nominal income above the inflation rate.

chronic81 10y ago
This is incorrect. The rent will precisely increase by 1000 Euro. Yes you can compare percentages all you want, but at the end of the day, 1000 Euro basic income is 1000 Euro more for everyone. That will be directly plowed into everyone's (for example) personal rent/housing budget or tolerance, which translates to inflated rental prices. If I make $15K/month and receive a $1K/month basic income, I'll gladly pay $1K/month more for rent -- just like the guy making $5K/month would. Can you tell me what will happen to rent rates?
- jackmodern 10y ago
  That's what happened when Facebook gave out monthly housing subsidies to employees a few years back, rent increased by exactly the same amount as the subsidies in the areas that qualified for the subsidy.
  - deleted 10y ago
    [deleted]
  - chronic81 10y ago
    Yes but that was a subset of the total Bay area population. My claim holds true also in the case of the entire population. Yes, rent prices in Menlo Park increased by the subsidy amount. As stated by Zuckerberg himself.
  - icelancer 10y ago
    Do you have a link? Sounds fascinating.
- djrobstep 10y ago
  If you make $160K a year, your tax increases to fund the basic income program will be a lot more than the $1K you'll receive, so there won't be extra for rent at all. And this is the way it's supposed to be: High earners will be net losers, people with low/sporadic/zero market income will be net gainers.
  - chronic81 10y ago
    > your tax increases to fund the basic income program will be a lot more than the $1K you'll receive, so there won't be extra for rent at all. This will never happen (through government legislation). If it does happen, then the policy will encourage individuals not to work, since the income to work ratio is better if you make less money. This would be a disaster for a country's economic development.
    - djrobstep 10y ago
      Having the choice to work a bit less is actually good. And the economic gains from increased distributive efficiency would be huge. In reality, there is already a large basic income program, it's called Social Security. I'm sure you probably think that giving millions of elderly the freedom to retire is terrible for economic development, but it is no doubt a great advance for human decency.
    - brbsix 10y ago
      Can you explain why this will not happen? A UBI is an income redistribution scheme. Higher income brackets must necessarily pay more than they receive, one way or another. Is it problematic? Sure, but so are all sorts of programs already in effect.
    - harmegido 10y ago
      You're assuming a 100% taxed marginal rate after some income level. That seems extremely unlikely. As long as the marginal tax rate is <100%, there will be incentive to work. But who says income tax is the only type of tax? You can use a progressive consumption tax (no tax under $x item, y% tax from $x to $z, etc) to raise the funds. Economists much prefer this type of tax because it disincentives consumption rather than production.
- jacalata 10y ago
  You can give me all the money you want and I won't spend any of it on housing. In fact my income has gone up 50% in the last five years and my housing expenses haven't changed at all.
  - pmorici 10y ago
    I have my doubts that you are typical. Personal savings rates are near historical lows in the US.
  - jrpt 10y ago
    But you're an individual, and obviously changes in one individual's income won't affect the housing market. If everyone in your community's income changed, things would be different. The amount of land in an area is fixed, and practically speaking so is the housing stock. Housing is priced at the margin, and if everyone still wants to live in the area, and is willing to pay more now (since even if they paid the exact amount of basic income more in rent, they'd still have the same amount of disposable income after paying the increased rent), then I would expect the price of housing to rise.
djrobstep 10y ago
You seem to be assuming an externally funded basic income. This may be true for the pilot, but once implemented "in production", a basic income would be funded through taxation, and so wouldn't increase the total amount of cash at all, just shift it about.
- brobinson 10y ago
  This is the one thing I haven't seen anyone talk about yet. What would the additional tax burden be on the median household? Would their tax burden be lower because the BI is replacing all the other welfare programs they are currently subsidizing?
  - konschubert 10y ago
    Depends on how you calculate, but pretty sure the minimum income would be more expensive that the current welfare programs. Somebody has to pay it. Now, the question who pays it is a political one. One might also hike the taxes for the higher income brackets only.
- konschubert 10y ago
  You are right, but the conclusion is the same: The minimum income takes from the rich and gives it to the poor.

chronic81 10y ago

This is incorrect. The rent will precisely increase by 1000 Euro. Yes you can compare percentages all you want, but at the end of the day, 1000 Euro basic income is 1000 Euro more for everyone. That will be directly plowed into everyone's (for example) personal rent/housing budget or tolerance, which translates to inflated rental prices. If I make $15K/month and receive a $1K/month basic income, I'll gladly pay $1K/month more for rent -- just like the guy making $5K/month would. Can you tell me what will happen to rent rates?

jackmodern 10y ago
That's what happened when Facebook gave out monthly housing subsidies to employees a few years back, rent increased by exactly the same amount as the subsidies in the areas that qualified for the subsidy.
- deleted 10y ago
  [deleted]
- chronic81 10y ago
  Yes but that was a subset of the total Bay area population. My claim holds true also in the case of the entire population. Yes, rent prices in Menlo Park increased by the subsidy amount. As stated by Zuckerberg himself.
- icelancer 10y ago
  Do you have a link? Sounds fascinating.
djrobstep 10y ago
If you make $160K a year, your tax increases to fund the basic income program will be a lot more than the $1K you'll receive, so there won't be extra for rent at all. And this is the way it's supposed to be: High earners will be net losers, people with low/sporadic/zero market income will be net gainers.
- chronic81 10y ago
  > your tax increases to fund the basic income program will be a lot more than the $1K you'll receive, so there won't be extra for rent at all. This will never happen (through government legislation). If it does happen, then the policy will encourage individuals not to work, since the income to work ratio is better if you make less money. This would be a disaster for a country's economic development.
  - djrobstep 10y ago
    Having the choice to work a bit less is actually good. And the economic gains from increased distributive efficiency would be huge. In reality, there is already a large basic income program, it's called Social Security. I'm sure you probably think that giving millions of elderly the freedom to retire is terrible for economic development, but it is no doubt a great advance for human decency.
  - brbsix 10y ago
    Can you explain why this will not happen? A UBI is an income redistribution scheme. Higher income brackets must necessarily pay more than they receive, one way or another. Is it problematic? Sure, but so are all sorts of programs already in effect.
  - harmegido 10y ago
    You're assuming a 100% taxed marginal rate after some income level. That seems extremely unlikely. As long as the marginal tax rate is <100%, there will be incentive to work. But who says income tax is the only type of tax? You can use a progressive consumption tax (no tax under $x item, y% tax from $x to $z, etc) to raise the funds. Economists much prefer this type of tax because it disincentives consumption rather than production.
jacalata 10y ago
You can give me all the money you want and I won't spend any of it on housing. In fact my income has gone up 50% in the last five years and my housing expenses haven't changed at all.
- pmorici 10y ago
  I have my doubts that you are typical. Personal savings rates are near historical lows in the US.
- jrpt 10y ago
  But you're an individual, and obviously changes in one individual's income won't affect the housing market. If everyone in your community's income changed, things would be different. The amount of land in an area is fixed, and practically speaking so is the housing stock. Housing is priced at the margin, and if everyone still wants to live in the area, and is willing to pay more now (since even if they paid the exact amount of basic income more in rent, they'd still have the same amount of disposable income after paying the increased rent), then I would expect the price of housing to rise.

djrobstep 10y ago

You seem to be assuming an externally funded basic income. This may be true for the pilot, but once implemented "in production", a basic income would be funded through taxation, and so wouldn't increase the total amount of cash at all, just shift it about.

brobinson 10y ago
This is the one thing I haven't seen anyone talk about yet. What would the additional tax burden be on the median household? Would their tax burden be lower because the BI is replacing all the other welfare programs they are currently subsidizing?
- konschubert 10y ago
  Depends on how you calculate, but pretty sure the minimum income would be more expensive that the current welfare programs. Somebody has to pay it. Now, the question who pays it is a political one. One might also hike the taxes for the higher income brackets only.
konschubert 10y ago
You are right, but the conclusion is the same: The minimum income takes from the rich and gives it to the poor.