7 ms·

UBI comes from tax money though. If the idea behind UBI is that people don't need to go work, and won't go buy McDonalds anymore, then tax income is going to pl

by RyanZAG 10y ago

UBI comes from tax money though. If the idea behind UBI is that people don't need to go work, and won't go buy McDonalds anymore, then tax income is going to plummet. If tax income plummets, what pays for UBI ? UBI can only succeed if people continue to consume, preferably at higher levels than currently, which would allow others who want to live a life at a higher standard to sell things to UBI recipients, who can then be taxed and support everyone else on UBI. If UBI encouraged too large a portion of the population to pursue non-taxable income (say, making art and games and giving them away for free because they don't need money), then UBI would collapse from lack of income. Especially so if that art is given away freely to other countries over the internet. So it's a fine line that is probably a lot more complex than people give it credit. There's certainly no guarantee as to what the results of UBI would be, and no guarantee that the medicine won't be far worse than the symptoms. EDIT: Even if you assume that a UBI could survive if it decreased with a fall in taxable income from a policy and livability perspective, if a person on UBI received $100 one week, and then had it drop to $75 the next, he would get a major shock and public opinion of a UBI would fall apart. You could print money to make sure UBI never falls, but if UBI is going out to the entire population, the amount of money needed would be enormous. That much money added to a system without an increase in real demand (people on UBI would still buy the same stuff), could easily cause hyperinflation. So another constraint that UBI has and I've never heard anybody mention - UBI can never decrease, even if tax income decreases. Plus there's no way anybody could trust politicians to manage something that complex. UBI practically demands a complete restructure of government, society and the economy. Instead of being a 'patch' as many have described, UBI is closer to 'The World 2.0'. It would be the most incredible Second System Syndrome ever seen.

zackmorris 10y ago
While this is true mathematically, I prefer to think about the opportunity cost of not having a UBI. I (like perhaps many people on HN) basically wasted my 20s trying to make rent while I worked on my shareware game company. I basically failed at that and all of that code went obsolete before it earned me income. Had I had a relatively small UBI of perhaps $12,000 per year, I could have met expenses long enough to get ahead of the curve. I wouldn't have spent that time burned out and getting sucked into dead end $20,000 per year jobs that took all of my time and energy. So for me, not having a UBI and throwing away a rather prolific 20 something probably cost the US GDP growth whatever my business might have contributed for a decade, say whatever a typical game developer salary might be (perhaps $60k/yr), call it $600,000. That could easily be 2, 4, 10 times that much if we grew enough to hire other employees. By not investing in the workforce like the country did with public works before the information age started in 1980, my generation (gen x) lost out on at least a 5x rate of return. My struggles happened just before Prosper and Kickstarter got big, so I ran up staggering credit card debt. Had we chosen a more progressive route, even at a 20% tax rate I would have paid the government back what it paid me, with the bonus of life sucking a whole lot less. I think a UBI might be one of the few things that can raise the 10% startup success rate because it attacks burn rate directly. It would also allow startups to focus on things more meaningful than video games and social media apps because it wouldn’t just be about trying to get enough F.U. money to get left alone anymore. I had always planned to save enough to be able to work on AI and alternative energy, and now with consistent hard work I have a chance of doing it, but with a middle aged realism that is just not helping my motivation. To be 20 again and told “go do all the things” is one of my deepest wishes and I hope it happens for future generations.
- superuser2 10y ago
  That $600k of production is based on the idea that you would have worked at some point, and people would have consumed your work. That is very different from "let's all stop producing and consuming."
  - ido 10y ago
    Produced and consumed digital works, which have no deleterious effects on the environment.
    - superuser2 10y ago
      Okay - the growth sector these days (to the extent that there is one) is already services not manufacturing.
    - stevenwiles 10y ago
      You're saying energy is free?
      - ido 10y ago
        The electricity required for running a computer is negligible compared to, say, manufacturing a car. And we can eventually move most/all electricity production to green methods but manufacturing physical items will always require physical resources.
    - shawn-butler 10y ago
      The production and consumption of digital works has plenty of "deleterious" effects on the environment.
- galtwho 10y ago
  I disagree that the economy lost out in the situation you gave. In the absence of your success, some other games developer generated 600K of benefit for the economy. + or - a few 1000's yeah sure his game would have been crappier than yours
jganetsk 10y ago
UBI comes from tax money though. If the idea behind UBI is that people don't need to go work, and won't go buy McDonalds anymore, then tax income is going to plummet. If tax income plummets, what pays for UBI ? People will still have the same incentive to work they always had (to make money) -- but some people will quit jobs they don't like, which will drive wages up (due to falling supply in the labor market). But the reason why UBI is so interesting now is that, with increasing automation, increased wages will have less of an impact on general prices. So prices will hold steady, as people continue to go to McDonalds. Note that there are other ways to collect tax revenue: sales tax, VAT tax, property tax, wealth tax, etc. UBI can only succeed if people continue to consume, preferably at higher levels than currently What basis do you have for saying this? Deflation may actually be beneficial in a basic income scenario (falling prices makes a fixed basic income worth more). If UBI encouraged too large a portion of the population to pursue non-taxable income (say, making art and games and giving them away for free because they don't need money), then UBI would collapse from lack of income. Why would they give it away for free when they could sell it for money instead?
- benologist 10y ago
  > Why would they give it away for free when they could sell it for money instead? I think the entire line of thinking is a bit flawed... UBI isn't about making sure any thing we do for money today remains a skill that anyone else will pay for. Like with open source some software will be given away, most software will not exclusively solve a problem or even do it well and complex problems will still require paid collaboration to produce complex software.
  - solotronics 10y ago
    I think there is a third path that could work even better. If you think about how money really works it first goes to those the bankers deem most worthy. Tech founders, producers of fine products, schools. It flows down a cascade of people's perceptions. If you really think about it money does not necessarily go to that which benefits society as a whole, it does somewhat, but it really the majority goes to those that have the perception of being the best from the perspective of a small subset of society. Possibly a more impartial and scientific method of deciding who gets money would be more beneficial instead of the whim of cabals of bankers.
hx87 10y ago
> If the idea behind UBI is that people don't need to go work, and won't go buy McDonalds anymore, then tax income is going to plummet. The idea is that people don't need to go work, because robots do all the work, and thus any economic value attached to labor, either real or nominal, converges to zero. It doesn't matter whether people have financial incentives to do work, because people /do no work/. You don't tax labor income to finance UBI, because nobody will have labor income; all taxes will be on capital of some sort, such as land or securities, and such taxes would be sustainable because all income will accrue to capital and none to labor.
- hueving 10y ago
  So why would anybody bother to put themselves through school to become something like a doctor or an engineer to build the robots that do all of the work?
  - coryrc 10y ago
    Some of us enjoy building robots and having more than a basic standard of living.
  - true_religion 10y ago
    People are geared to competing with one another in the social domain. In order to maintain status, people will continue to get well educated and 'contribute to society' in some way rather than simply sit and be mediocre. Granted, if you have a UBI, lots more people can maintain their status by say.... becoming top ranked at a video game, but even then so long as it doesn't lead to societal collapse... does it really matter how fast we are improving our civilisation? I'm willing to allow us to improve slower if it means we grant everyone freedom from worrying where their next meal is coming from.
    - hueving 10y ago
      >does it really matter how fast we are improving our civilisation Yes, when you consider the global problems we have with energy, climate, food supplies, water supplies, and general poverty it's pretty selfish to just stop pushing forward.
ZenoArrow 10y ago
> "UBI comes from tax money though." Not necessarily. It's quite possible to have UBI be part of the money creation process. In order to understand this approach, it's useful to understand how money is currently created. I'd recommend the 4 minute video found here as a starting point: http://positivemoney.org/ http://positivemoney.org/ New money is necessary for our current economy to function. Making UBI part of the distribution of this new money makes it possible to get spending power directly in the hands of all citizens, as well as doing so without raising money through taxation.

by RyanZAG 10y ago

zackmorris 10y ago

While this is true mathematically, I prefer to think about the opportunity cost of not having a UBI. I (like perhaps many people on HN) basically wasted my 20s trying to make rent while I worked on my shareware game company. I basically failed at that and all of that code went obsolete before it earned me income. Had I had a relatively small UBI of perhaps $12,000 per year, I could have met expenses long enough to get ahead of the curve. I wouldn't have spent that time burned out and getting sucked into dead end $20,000 per year jobs that took all of my time and energy. So for me, not having a UBI and throwing away a rather prolific 20 something probably cost the US GDP growth whatever my business might have contributed for a decade, say whatever a typical game developer salary might be (perhaps $60k/yr), call it $600,000. That could easily be 2, 4, 10 times that much if we grew enough to hire other employees. By not investing in the workforce like the country did with public works before the information age started in 1980, my generation (gen x) lost out on at least a 5x rate of return. My struggles happened just before Prosper and Kickstarter got big, so I ran up staggering credit card debt. Had we chosen a more progressive route, even at a 20% tax rate I would have paid the government back what it paid me, with the bonus of life sucking a whole lot less. I think a UBI might be one of the few things that can raise the 10% startup success rate because it attacks burn rate directly. It would also allow startups to focus on things more meaningful than video games and social media apps because it wouldn’t just be about trying to get enough F.U. money to get left alone anymore. I had always planned to save enough to be able to work on AI and alternative energy, and now with consistent hard work I have a chance of doing it, but with a middle aged realism that is just not helping my motivation. To be 20 again and told “go do all the things” is one of my deepest wishes and I hope it happens for future generations.

superuser2 10y ago
That $600k of production is based on the idea that you would have worked at some point, and people would have consumed your work. That is very different from "let's all stop producing and consuming."
- ido 10y ago
  Produced and consumed digital works, which have no deleterious effects on the environment.
  - superuser2 10y ago
    Okay - the growth sector these days (to the extent that there is one) is already services not manufacturing.
  - stevenwiles 10y ago
    You're saying energy is free?
    - ido 10y ago
      The electricity required for running a computer is negligible compared to, say, manufacturing a car. And we can eventually move most/all electricity production to green methods but manufacturing physical items will always require physical resources.
  - shawn-butler 10y ago
    The production and consumption of digital works has plenty of "deleterious" effects on the environment.
galtwho 10y ago
I disagree that the economy lost out in the situation you gave. In the absence of your success, some other games developer generated 600K of benefit for the economy. + or - a few 1000's yeah sure his game would have been crappier than yours

jganetsk 10y ago

UBI comes from tax money though. If the idea behind UBI is that people don't need to go work, and won't go buy McDonalds anymore, then tax income is going to plummet. If tax income plummets, what pays for UBI ? People will still have the same incentive to work they always had (to make money) -- but some people will quit jobs they don't like, which will drive wages up (due to falling supply in the labor market). But the reason why UBI is so interesting now is that, with increasing automation, increased wages will have less of an impact on general prices. So prices will hold steady, as people continue to go to McDonalds. Note that there are other ways to collect tax revenue: sales tax, VAT tax, property tax, wealth tax, etc. UBI can only succeed if people continue to consume, preferably at higher levels than currently What basis do you have for saying this? Deflation may actually be beneficial in a basic income scenario (falling prices makes a fixed basic income worth more). If UBI encouraged too large a portion of the population to pursue non-taxable income (say, making art and games and giving them away for free because they don't need money), then UBI would collapse from lack of income. Why would they give it away for free when they could sell it for money instead?

benologist 10y ago
> Why would they give it away for free when they could sell it for money instead? I think the entire line of thinking is a bit flawed... UBI isn't about making sure any thing we do for money today remains a skill that anyone else will pay for. Like with open source some software will be given away, most software will not exclusively solve a problem or even do it well and complex problems will still require paid collaboration to produce complex software.
- solotronics 10y ago
  I think there is a third path that could work even better. If you think about how money really works it first goes to those the bankers deem most worthy. Tech founders, producers of fine products, schools. It flows down a cascade of people's perceptions. If you really think about it money does not necessarily go to that which benefits society as a whole, it does somewhat, but it really the majority goes to those that have the perception of being the best from the perspective of a small subset of society. Possibly a more impartial and scientific method of deciding who gets money would be more beneficial instead of the whim of cabals of bankers.

hx87 10y ago

> If the idea behind UBI is that people don't need to go work, and won't go buy McDonalds anymore, then tax income is going to plummet. The idea is that people don't need to go work, because robots do all the work, and thus any economic value attached to labor, either real or nominal, converges to zero. It doesn't matter whether people have financial incentives to do work, because people /do no work/. You don't tax labor income to finance UBI, because nobody will have labor income; all taxes will be on capital of some sort, such as land or securities, and such taxes would be sustainable because all income will accrue to capital and none to labor.

hueving 10y ago
So why would anybody bother to put themselves through school to become something like a doctor or an engineer to build the robots that do all of the work?
- coryrc 10y ago
  Some of us enjoy building robots and having more than a basic standard of living.
- true_religion 10y ago
  People are geared to competing with one another in the social domain. In order to maintain status, people will continue to get well educated and 'contribute to society' in some way rather than simply sit and be mediocre. Granted, if you have a UBI, lots more people can maintain their status by say.... becoming top ranked at a video game, but even then so long as it doesn't lead to societal collapse... does it really matter how fast we are improving our civilisation? I'm willing to allow us to improve slower if it means we grant everyone freedom from worrying where their next meal is coming from.
  - hueving 10y ago
    >does it really matter how fast we are improving our civilisation Yes, when you consider the global problems we have with energy, climate, food supplies, water supplies, and general poverty it's pretty selfish to just stop pushing forward.

ZenoArrow 10y ago

> "UBI comes from tax money though." Not necessarily. It's quite possible to have UBI be part of the money creation process. In order to understand this approach, it's useful to understand how money is currently created. I'd recommend the 4 minute video found here as a starting point: http://positivemoney.org/ http://positivemoney.org/ New money is necessary for our current economy to function. Making UBI part of the distribution of this new money makes it possible to get spending power directly in the hands of all citizens, as well as doing so without raising money through taxation.