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https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax Negative income tax (more emphasis) + basic income (less em

https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax Negative income tax (more emphasis) + basic income (less emphasis) would be a better system. A negative income tax would encourage people to work. Basic income by itself may just remove some barriers to working but may not result in a change (basic income > costs).

IgorPartola 10y ago
If a society produces so much value that everyone can be provided with a basic income that is greater than cost of living, why is that a bad thing?
- TheProbabilist 10y ago
  I'm positive that this answer won't be appetizing if you belong to the dyed in the wool, coastal progressive contingent, heavily represented here on HN. Given the recent political developments (not just here in the U.S. but across the world including Europe), it is high time we speak frankly and not say things couched in vain pleasantries, suited to people who'd rather not hear or say anything disagreeable, to keep up appearances. Having said that, if you want the honest truth as to why _some_ people may have an objection I'm willing to explain. People who are unlucky to be earning just enough to be excluded in one way or the other, from these UBI handouts ( which already happen in disguised means and forms, but more on that later [1] ) but not enough - from their wages & other sources of income - to be living a comfortable life will find themselves asking how is it that suddenly a) their kids cannot get into those choice daycare centers which weren't so crammed only a few years ago b) the economy classes on most flights are filled with the riffraff & people from outside of the income/social classes they're accustomed to c) their favorite restaurants are always booked or have lines out the door ( a perennial theme in SF ) [2] d) the rent pressure is greater for a smaller inventory of listings in the desirable neighborhoods e) their friends cannot afford to socialize as frequently as they once did ( or worse, have moved to a different part of the country simply because it is no longer affordable to remain ) due to the same wage pressures In other words people are mostly fine with any entitlements to the poor & disadvantaged as long as it doesn't threaten their way of life or become a competitive element to the comforts & privileges they are accustomed to. Once those things are threatened people find it difficult to accommodate those things, even if it makes numerical sense - as in say an universal extra $10,000 bump to _absolutely everyone_ regardless of income class ( if that is what they even _mean_ when they say UBI; I doubt it is ) might only mean that Person X can send his kids to a much more exclusive summer camp every year but now that same bump in income means more crowded classrooms for the same kids during the rest of the year because Person Y can now afford to send his or her kids to the school for privileged kids. More directly - and less politely - people don't want a handout-receiver ( and how you define that term depends on your political slant and can mean anyone from a lowly UBI claimant to a loftily paid city worker in any large progressive city[2] ) suddenly being able to afford the same niceties of life that they see themselves slaving at their 9-to-5s for. Economists and policy makers can couch it in clever speak but it really is that simple. [1] S.F. spends record $241 million on homeless, can’t track results http://www.sfchronicle.com/bayarea/article/S-F-spends-record-241-million-on-homeless-6808319.php http://www.sfchronicle.com/bayarea/article/S-F-spends-record... [2] Report: San Francisco has the highest density of restaurants in America, by far http://insidescoopsf.sfgate.com/blog/2012/08/01/report-san-francisco-has-the-highest-density-of-restaurants-in-america-by-far/ http://insidescoopsf.sfgate.com/blog/2012/08/01/report-san-f... [3] This San Francisco Janitor Made More Than $270,000 Last Year http://time.com/4555692/san-francisco-bart-janitor-salary/ http://time.com/4555692/san-francisco-bart-janitor-salary/
  - aninhumer 10y ago
    >People who are unlucky to be earning just enough to be excluded in one way or the other, from these UBI handouts Universal Basic Income means there are no such people, by definition. >as in say an universal extra $10,000 bump to _absolutely everyone_ regardless of income class ( if that is what they even _mean_ when they say UBI; I doubt it is ) Yes it is. That is the definition of UBI. >a) their kids cannot get into those choice daycare centers which weren't so crammed only a few years ago >c) their favorite restaurants are always booked or have lines out the door ( a perennial theme in SF ) [2] Your reference contradicts your point. It says SF has more restaurants per household than elsewhere, so one would assume they are much less crowded on average. Moreover, if services start to become crowded as a result of increased demand, then new ones will open to cater to that demand. > d) the rent pressure is greater for a smaller inventory of listings in the desirable neighborhoods There's plenty of affordable desirable housing available, the problem is that it's nowhere near the jobs people need to pay for it. If you pay people Basic Income, they can afford to move out of the expensive cities which in turn reduces demand for housing within them.
  - Futurebot 10y ago
    An actual UBI (which this isn't) is by definition universal. Everyone gets it regardless of income or whether or not they work.
  - oceante 10y ago
    Your comment is distinctly American. The rest of the world is perfectly happy with universal healthcare, strong social safety nets, and "handouts" to children. How do you think Brexit was sold to the British? Do you realize that the Brexiters (and all the European nativists) have been selling their agenda primarily on the basis that it would mean more handouts? America is different. And we all know what that difference is. Americans are very much unique in rejecting basic social guarantees out of the fear that the "wrong people" will benefit.
    - virmundi 10y ago
      I don't think that this is due to "fear that the 'wrong people' will benefit". I think the fear is that such programs will sap our will to improve. We fear becoming European. We fear becoming docile wards of the state. Keep in mind that everyone in the US descends from people that decided that the risk of exposure, wolves and bears was more tolerable than staying with their peers. We now stand at a crossroads unseen by past humanity: unnecessary man. How do we deal with the fact that a portion of our population, perhaps even half, is quickly becoming a millstone about society's neck? Ideas like UBI are our first attempt to deal humanly. Soon we'll probably add to UBI voluntary sterilization or other population controls. How will we collectively in the West solve this? Burdening our State coffers by maintaining useless populations might not be the best thing.
- pbhjpbhj 10y ago
  Because then the rich people can't afford to buy dozens of excessively expensive cars, or own several houses, or have other people do all the menial chores for them, ...
sonthonax 10y ago
Negative income tax would be a blatant subsidisation of labour, which has it's own issues. In another sense, it's just welfare, but a highly regressive one. More income would go to those who are poor but in work, and less to those for what ever reason (like disability) unable to work. If you were to further lower the costs of labour, you risk stymieing actual economic growth which comes from improvements in efficiency. For instance, why use a machine when you can just hire more people? Also what would the effect on monetary policy be? If this was funded though an income tax, would the lower savings rates of the poor, put more money in circulation, thus increasing inflation? Could you account for the change in prices driven by an increase in demand from those who's labour isn't actually valuable enough to sustain their consumption. I don't claim to have the answers to welfare, but I really think that we should aim for a solution that provides as little market distortion as possible. I sincerely think that a negative tax would be a huge unwelcome and ineffective distortion in the labour market.
- throwaway729 10y ago
  > For instance, why use a machine when you can just hire more people? Politics could become a reason -- the people who are being replaced by machines become a powerful force, have a strong work-based ethic (different from "work ethic"), and care more about their well-being than the overall efficiency of the economy.
  - transposed 10y ago
    Interesting point, I had not considered that. Either way, I'm curious to see more adoption of UBI - even if it is a small, homogeneous population. Maybe working class beneficiaries of UBI could dedicate a larger portion of their time to volunteering, or re-training.
- gohrt 10y ago
  How is subsidization of labor worse than subsidization of non-labor?
  - Cakez0r 10y ago
aninhumer 10y ago
Negative Income Tax is mathematically equivalent to Basic Income, in that either can produce the same income function with the right tax bands. However, there would likely be implementation differences in practice as a consequence of their framing.
- biobob 10y ago
  This is only when you view income in isolation. Negative Income Tax requires the person to work, while Basic Income doesn't. Moreover Negative Income Tax could support very unproductive jobs that the economy doesn't really need.
  - aninhumer 10y ago
    No, NIT doesn't require people to work unless you make that a specific requirement. For example, if you have a negative tax of 25% on income below $40k, unemployed people on $0 income will receive a $10k tax credit. This is equivalent to $10k Basic Income with a 25% tax bracket up to $40k earned income, since in both cases people earning $0 get $10k and people earning $40k get $40k. You could make it a requirement to work, but then people could just get trivial jobs for $1 just to get the tax credit.

IgorPartola 10y ago

If a society produces so much value that everyone can be provided with a basic income that is greater than cost of living, why is that a bad thing?

TheProbabilist 10y ago
I'm positive that this answer won't be appetizing if you belong to the dyed in the wool, coastal progressive contingent, heavily represented here on HN. Given the recent political developments (not just here in the U.S. but across the world including Europe), it is high time we speak frankly and not say things couched in vain pleasantries, suited to people who'd rather not hear or say anything disagreeable, to keep up appearances. Having said that, if you want the honest truth as to why _some_ people may have an objection I'm willing to explain. People who are unlucky to be earning just enough to be excluded in one way or the other, from these UBI handouts ( which already happen in disguised means and forms, but more on that later [1] ) but not enough - from their wages & other sources of income - to be living a comfortable life will find themselves asking how is it that suddenly a) their kids cannot get into those choice daycare centers which weren't so crammed only a few years ago b) the economy classes on most flights are filled with the riffraff & people from outside of the income/social classes they're accustomed to c) their favorite restaurants are always booked or have lines out the door ( a perennial theme in SF ) [2] d) the rent pressure is greater for a smaller inventory of listings in the desirable neighborhoods e) their friends cannot afford to socialize as frequently as they once did ( or worse, have moved to a different part of the country simply because it is no longer affordable to remain ) due to the same wage pressures In other words people are mostly fine with any entitlements to the poor & disadvantaged as long as it doesn't threaten their way of life or become a competitive element to the comforts & privileges they are accustomed to. Once those things are threatened people find it difficult to accommodate those things, even if it makes numerical sense - as in say an universal extra $10,000 bump to _absolutely everyone_ regardless of income class ( if that is what they even _mean_ when they say UBI; I doubt it is ) might only mean that Person X can send his kids to a much more exclusive summer camp every year but now that same bump in income means more crowded classrooms for the same kids during the rest of the year because Person Y can now afford to send his or her kids to the school for privileged kids. More directly - and less politely - people don't want a handout-receiver ( and how you define that term depends on your political slant and can mean anyone from a lowly UBI claimant to a loftily paid city worker in any large progressive city[2] ) suddenly being able to afford the same niceties of life that they see themselves slaving at their 9-to-5s for. Economists and policy makers can couch it in clever speak but it really is that simple. [1] S.F. spends record $241 million on homeless, can’t track results http://www.sfchronicle.com/bayarea/article/S-F-spends-record-241-million-on-homeless-6808319.php http://www.sfchronicle.com/bayarea/article/S-F-spends-record... [2] Report: San Francisco has the highest density of restaurants in America, by far http://insidescoopsf.sfgate.com/blog/2012/08/01/report-san-francisco-has-the-highest-density-of-restaurants-in-america-by-far/ http://insidescoopsf.sfgate.com/blog/2012/08/01/report-san-f... [3] This San Francisco Janitor Made More Than $270,000 Last Year http://time.com/4555692/san-francisco-bart-janitor-salary/ http://time.com/4555692/san-francisco-bart-janitor-salary/
- aninhumer 10y ago
  >People who are unlucky to be earning just enough to be excluded in one way or the other, from these UBI handouts Universal Basic Income means there are no such people, by definition. >as in say an universal extra $10,000 bump to _absolutely everyone_ regardless of income class ( if that is what they even _mean_ when they say UBI; I doubt it is ) Yes it is. That is the definition of UBI. >a) their kids cannot get into those choice daycare centers which weren't so crammed only a few years ago >c) their favorite restaurants are always booked or have lines out the door ( a perennial theme in SF ) [2] Your reference contradicts your point. It says SF has more restaurants per household than elsewhere, so one would assume they are much less crowded on average. Moreover, if services start to become crowded as a result of increased demand, then new ones will open to cater to that demand. > d) the rent pressure is greater for a smaller inventory of listings in the desirable neighborhoods There's plenty of affordable desirable housing available, the problem is that it's nowhere near the jobs people need to pay for it. If you pay people Basic Income, they can afford to move out of the expensive cities which in turn reduces demand for housing within them.
- Futurebot 10y ago
  An actual UBI (which this isn't) is by definition universal. Everyone gets it regardless of income or whether or not they work.
- oceante 10y ago
  Your comment is distinctly American. The rest of the world is perfectly happy with universal healthcare, strong social safety nets, and "handouts" to children. How do you think Brexit was sold to the British? Do you realize that the Brexiters (and all the European nativists) have been selling their agenda primarily on the basis that it would mean more handouts? America is different. And we all know what that difference is. Americans are very much unique in rejecting basic social guarantees out of the fear that the "wrong people" will benefit.
  - virmundi 10y ago
    I don't think that this is due to "fear that the 'wrong people' will benefit". I think the fear is that such programs will sap our will to improve. We fear becoming European. We fear becoming docile wards of the state. Keep in mind that everyone in the US descends from people that decided that the risk of exposure, wolves and bears was more tolerable than staying with their peers. We now stand at a crossroads unseen by past humanity: unnecessary man. How do we deal with the fact that a portion of our population, perhaps even half, is quickly becoming a millstone about society's neck? Ideas like UBI are our first attempt to deal humanly. Soon we'll probably add to UBI voluntary sterilization or other population controls. How will we collectively in the West solve this? Burdening our State coffers by maintaining useless populations might not be the best thing.
pbhjpbhj 10y ago
Because then the rich people can't afford to buy dozens of excessively expensive cars, or own several houses, or have other people do all the menial chores for them, ...

sonthonax 10y ago

Negative income tax would be a blatant subsidisation of labour, which has it's own issues. In another sense, it's just welfare, but a highly regressive one. More income would go to those who are poor but in work, and less to those for what ever reason (like disability) unable to work. If you were to further lower the costs of labour, you risk stymieing actual economic growth which comes from improvements in efficiency. For instance, why use a machine when you can just hire more people? Also what would the effect on monetary policy be? If this was funded though an income tax, would the lower savings rates of the poor, put more money in circulation, thus increasing inflation? Could you account for the change in prices driven by an increase in demand from those who's labour isn't actually valuable enough to sustain their consumption. I don't claim to have the answers to welfare, but I really think that we should aim for a solution that provides as little market distortion as possible. I sincerely think that a negative tax would be a huge unwelcome and ineffective distortion in the labour market.

throwaway729 10y ago
> For instance, why use a machine when you can just hire more people? Politics could become a reason -- the people who are being replaced by machines become a powerful force, have a strong work-based ethic (different from "work ethic"), and care more about their well-being than the overall efficiency of the economy.
- transposed 10y ago
  Interesting point, I had not considered that. Either way, I'm curious to see more adoption of UBI - even if it is a small, homogeneous population. Maybe working class beneficiaries of UBI could dedicate a larger portion of their time to volunteering, or re-training.
gohrt 10y ago
How is subsidization of labor worse than subsidization of non-labor?
- Cakez0r 10y ago

aninhumer 10y ago

Negative Income Tax is mathematically equivalent to Basic Income, in that either can produce the same income function with the right tax bands. However, there would likely be implementation differences in practice as a consequence of their framing.

biobob 10y ago
This is only when you view income in isolation. Negative Income Tax requires the person to work, while Basic Income doesn't. Moreover Negative Income Tax could support very unproductive jobs that the economy doesn't really need.
- aninhumer 10y ago
  No, NIT doesn't require people to work unless you make that a specific requirement. For example, if you have a negative tax of 25% on income below $40k, unemployed people on $0 income will receive a $10k tax credit. This is equivalent to $10k Basic Income with a 25% tax bracket up to $40k earned income, since in both cases people earning $0 get $10k and people earning $40k get $40k. You could make it a requirement to work, but then people could just get trivial jobs for $1 just to get the tax credit.