6 ms·

I don't see how they would afford this. Rough approximations show that even giving $20 a month to India's 900 million adult population would mean an annual expe

by gyey 10y ago

I don't see how they would afford this. Rough approximations show that even giving $20 a month to India's 900 million adult population would mean an annual expenditure of 216 billion dollars, more than 4 times the country's annual defence budget. Where does all this money come from? Increased taxes from the middle class (so that they pay $40 to get $20)?

IslaDeEncanta 10y ago
There's a class of wealthy people they can tap into.
- ythn 10y ago
  You gotta be careful of the Laffer Curve[0] though. Tap into the rich too much and they'll leave. Make it illegal to leave... well, your country is going downhill fast. [0] https://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve
  - panglott 10y ago
    What is the revenue-maximizing rate of taxation under the Laffer curve?
    - deleted 10y ago
      [deleted]
    - gertef 10y ago
      The exact value is near impossible to pinpoint, but you can find it by gradient methods. One thing for certain is that it's lower than the rate I currently pay. ;-)
    - IslaDeEncanta 10y ago
      About 70% of income, according to estimates. It varies for other taxes (capital, consumption, etc.). Source article: http://www.sciencedirect.com/science/article/pii/S030439321100064X http://www.sciencedirect.com/science/article/pii/S0304393211...
  - lawless123 10y ago
    "You gotta be careful of the Laffer Curve[0] though. Tap into the rich too much and they'll leave." We should tap into it on a global scale. We'll have Moon colonies in no time!
  - thesimpsons1022 10y ago
    the laffer curve and supply side economics is junk/propoganda masquerading as economics. It's about as real as the scientific studies exxon releases against global warming.
    - ythn 10y ago
      > economics in general is junk and a bogus field FTFY
  - thesimpsons1022 10y ago
    the laffer curve and supply side economics is junk/propoganda masquerading as economics. It's about as real as the scientific studies exxon releases against global warming.
  - gertef 10y ago
    They won't leave if it costs them access to the hugely profitable domestic market that makes them rich.
- jerf 10y ago
  Numbers? Plus at societal scale "wealth" doesn't necessarily work the way it does at the personal level. I can go to the gas pump and buy as much gas as I could personally want at the price posted on the sign. You'll find that if you stepped out and tried to buy ten billion gallons of gas at that price that the situation will change in numerous ways. Confiscating the "wealth" of the rich and trying to use it to buy things that nobody is even making right now is not something you can casually assume will work; the economy itself will need time to adjust before it could even supply the desired goods at such a different scale. The point here being not that it's impossible, or even undesirable, but merely that naively taking stock of what "the wealthy" have by current measures and assuming you can confiscate arbitrary amounts of it and use it to buy arbitrary amounts of consumer goods without having to account for any of the prices of the goods involved in that operation changing in the process isn't effective.
- forrestthewoods 10y ago
  India's nominal GDP is $1,820 per person.
  - IslaDeEncanta 10y ago
    Which is a lot more than $240.
chiph 10y ago
This is what I point out whenever BI is brought up as a possibility in the US. With 1/4 the population of India, higher GDP, and allowing for all the existing entitlement programs being retired, we can't afford it either. The math just doesn't work out. Edit: Some grossly simplified numbers. Assumptions: BI matches poverty level. Everyone gets BI (parents receive their children's payments until they reach majority). Family size is 3 (average household size is really 2.54 persons in the US) US Population: 312 million, which is 104 million families (households). The Census dept. says poverty level for a family of 3 is $20,000, so that's what BI must match. This gives us annual BI payments of $2.08 trillion. Savings from shuttered entitlement programs: Medicare, Medicaid, CHIP, ACA subsidies: $938 billion. EITC & CTC: $362 billion. Total savings is $1.3 trillion annually. But what about Social Security (OASI/DI) with $888 billion in payments? Since that's a pay-it-forward program we can't end it suddenly (it'd be political suicide, in any case). It'd have to be tapered off in some fashion. The trust fund (Al Gore's "Lock Box") doesn't exist as a big pile of money to be tapped, as that has been turned into US-issued Treasury Bonds. So there's a shortfall of about $810 billion each year. Could we tap into the money sent to the Pentagon? Yes, but that's "only" $610 billion and we'd have a military that isn't being paid and with increasingly obsolete equipment. Not a good situation.
- Sone7 10y ago
  What are you basing that on? I don't buy the idea that America can't afford basic food and shelter for every man woman and child for even a second. Have you ever thought about how much poverty is negatively affecting the potential future of the US? I suspect the cost to society of children growing up in an environment with constant hunger is much, much larger than the cost of feeding that kid.
  - chiph 10y ago
    See my edit, with some super-simplified numbers.
- woofyman 10y ago
  >Savings from shuttered entitlement programs: Medicare, Medicaid, CHIP, ACA subsidies: $938 billion You're proposing eliminating the health care of 120 million people? What we really need is universal, single payer health care.
jganetsk 10y ago
You can raise income taxes on the employed pay for UBI for the unemployed. Therefore, the cost would only be $20 * India's unemployed adult population, which is a lot less than 900 million.
- surfmike 10y ago
  That is also no longer a Universal Basic Income.
  - bryanlarsen 10y ago
    The OP is suggesting that taxes on the employed go up by >= $20 at the same time that they receive a check for $20. No net benefit for the employed while they are employed, but the checks keep coming even if employment stops.
    - surfmike 10y ago
      Ok, but that's still increasing marginal rates even if you ignore the unemployed. Consider the case where you have 100 people, one that earns $1/week, one that earns $2/week, etc. and the last person earns $100/week. A $20/week UBI for all of them would cost $2000/week. You would need a flat tax of 39.6% on everyone to cover that. So everyone's marginal tax rate increases, with the associated deadweight losses. tldr; you can't just hand wave and say a redistributional tax scheme is free since it all balances out across the population.
      - jganetsk 10y ago
        No one even came close to suggesting that a redistributional tax scheme is free. But interestingly: basic income provides more benefits with as income inequality goes up. That is, if everyone in society already has the same level of income, there would be no way to finance basic income through income tax. You would collect the same amount of tax from every person and then give it right back to them. However, in your hypothetical distribution, that one person at the top is singlehandedly providing the basic income of 2% of the population. And we are using your proposed very fair taxation scheme of flat tax. And in reality, income distributions are far more skewed than your hypothetical distribution.
austincheney 10y ago
The money comes from sacrificing existing entitlement programs, which might actually cost more. Think about it like this in the US: Imagine giving everybody a basic income and eliminating minimum wage, social security, medicare, welfare, and so forth... Naturally some people would become wealthier (paying down existing debts) and some people would become poorer (spending money more rapidly and increasing their debt burden), but these are personal decisions.
- pkaye 10y ago
  So you are taking money out of social security and medicare which currently people earned (you return is somewhat proportional to how much taxes you paid) into a general pool? In that case, we should start applying FICA taxes on investment income also then because then it is a general tax.
  - Jarwain 10y ago
    I would think that medicare becomes a sort of single-payer system; you get the same Basic Income and the costs of the insurance come from the pool. I do think that some aspects of our tax system could be reworked. Creating a wealth tax and removing income and other redundant taxes seems to be a popular idea[1] [1](http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequality-tax-wealth-not-income.html http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequali...)
  - gertef 10y ago
    money is fungible, and SS benefits are extremely extremely loosely proportional to how much taxes you paid.
- chimeracoder 10y ago
  > Think about it like this in the US: Imagine giving everybody a basic income and eliminating minimum wage, social security, medicare, welfare, and so forth... What happens when someone inevitably spends their entire income on non-essential expenses, or bets it all on black, or gets talked into making a bad investment, leaving them with no money in the bank? Do we just tell them, "well, suck it up and get a job"? "Sorry, you can't feed yourself because you made your choice on how to spend your money"? Replacing all other entitlement programs with a cash handout is a political non-starter.

by gyey 10y ago

IslaDeEncanta 10y ago

There's a class of wealthy people they can tap into.

ythn 10y ago
You gotta be careful of the Laffer Curve[0] though. Tap into the rich too much and they'll leave. Make it illegal to leave... well, your country is going downhill fast. [0] https://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve
- panglott 10y ago
  What is the revenue-maximizing rate of taxation under the Laffer curve?
  - deleted 10y ago
    [deleted]
  - gertef 10y ago
    The exact value is near impossible to pinpoint, but you can find it by gradient methods. One thing for certain is that it's lower than the rate I currently pay. ;-)
  - IslaDeEncanta 10y ago
    About 70% of income, according to estimates. It varies for other taxes (capital, consumption, etc.). Source article: http://www.sciencedirect.com/science/article/pii/S030439321100064X http://www.sciencedirect.com/science/article/pii/S0304393211...
- lawless123 10y ago
  "You gotta be careful of the Laffer Curve[0] though. Tap into the rich too much and they'll leave." We should tap into it on a global scale. We'll have Moon colonies in no time!
- thesimpsons1022 10y ago
  the laffer curve and supply side economics is junk/propoganda masquerading as economics. It's about as real as the scientific studies exxon releases against global warming.
  - ythn 10y ago
    > economics in general is junk and a bogus field FTFY
- thesimpsons1022 10y ago
  the laffer curve and supply side economics is junk/propoganda masquerading as economics. It's about as real as the scientific studies exxon releases against global warming.
- gertef 10y ago
  They won't leave if it costs them access to the hugely profitable domestic market that makes them rich.
jerf 10y ago
Numbers? Plus at societal scale "wealth" doesn't necessarily work the way it does at the personal level. I can go to the gas pump and buy as much gas as I could personally want at the price posted on the sign. You'll find that if you stepped out and tried to buy ten billion gallons of gas at that price that the situation will change in numerous ways. Confiscating the "wealth" of the rich and trying to use it to buy things that nobody is even making right now is not something you can casually assume will work; the economy itself will need time to adjust before it could even supply the desired goods at such a different scale. The point here being not that it's impossible, or even undesirable, but merely that naively taking stock of what "the wealthy" have by current measures and assuming you can confiscate arbitrary amounts of it and use it to buy arbitrary amounts of consumer goods without having to account for any of the prices of the goods involved in that operation changing in the process isn't effective.
forrestthewoods 10y ago
India's nominal GDP is $1,820 per person.
- IslaDeEncanta 10y ago
  Which is a lot more than $240.

chiph 10y ago

This is what I point out whenever BI is brought up as a possibility in the US. With 1/4 the population of India, higher GDP, and allowing for all the existing entitlement programs being retired, we can't afford it either. The math just doesn't work out. Edit: Some grossly simplified numbers. Assumptions: BI matches poverty level. Everyone gets BI (parents receive their children's payments until they reach majority). Family size is 3 (average household size is really 2.54 persons in the US) US Population: 312 million, which is 104 million families (households). The Census dept. says poverty level for a family of 3 is $20,000, so that's what BI must match. This gives us annual BI payments of $2.08 trillion. Savings from shuttered entitlement programs: Medicare, Medicaid, CHIP, ACA subsidies: $938 billion. EITC & CTC: $362 billion. Total savings is $1.3 trillion annually. But what about Social Security (OASI/DI) with $888 billion in payments? Since that's a pay-it-forward program we can't end it suddenly (it'd be political suicide, in any case). It'd have to be tapered off in some fashion. The trust fund (Al Gore's "Lock Box") doesn't exist as a big pile of money to be tapped, as that has been turned into US-issued Treasury Bonds. So there's a shortfall of about $810 billion each year. Could we tap into the money sent to the Pentagon? Yes, but that's "only" $610 billion and we'd have a military that isn't being paid and with increasingly obsolete equipment. Not a good situation.

Sone7 10y ago
What are you basing that on? I don't buy the idea that America can't afford basic food and shelter for every man woman and child for even a second. Have you ever thought about how much poverty is negatively affecting the potential future of the US? I suspect the cost to society of children growing up in an environment with constant hunger is much, much larger than the cost of feeding that kid.
- chiph 10y ago
  See my edit, with some super-simplified numbers.
woofyman 10y ago
>Savings from shuttered entitlement programs: Medicare, Medicaid, CHIP, ACA subsidies: $938 billion You're proposing eliminating the health care of 120 million people? What we really need is universal, single payer health care.

jganetsk 10y ago

You can raise income taxes on the employed pay for UBI for the unemployed. Therefore, the cost would only be $20 * India's unemployed adult population, which is a lot less than 900 million.

surfmike 10y ago
That is also no longer a Universal Basic Income.
- bryanlarsen 10y ago
  The OP is suggesting that taxes on the employed go up by >= $20 at the same time that they receive a check for $20. No net benefit for the employed while they are employed, but the checks keep coming even if employment stops.
  - surfmike 10y ago
    Ok, but that's still increasing marginal rates even if you ignore the unemployed. Consider the case where you have 100 people, one that earns $1/week, one that earns $2/week, etc. and the last person earns $100/week. A $20/week UBI for all of them would cost $2000/week. You would need a flat tax of 39.6% on everyone to cover that. So everyone's marginal tax rate increases, with the associated deadweight losses. tldr; you can't just hand wave and say a redistributional tax scheme is free since it all balances out across the population.
    - jganetsk 10y ago
      No one even came close to suggesting that a redistributional tax scheme is free. But interestingly: basic income provides more benefits with as income inequality goes up. That is, if everyone in society already has the same level of income, there would be no way to finance basic income through income tax. You would collect the same amount of tax from every person and then give it right back to them. However, in your hypothetical distribution, that one person at the top is singlehandedly providing the basic income of 2% of the population. And we are using your proposed very fair taxation scheme of flat tax. And in reality, income distributions are far more skewed than your hypothetical distribution.

austincheney 10y ago

The money comes from sacrificing existing entitlement programs, which might actually cost more. Think about it like this in the US: Imagine giving everybody a basic income and eliminating minimum wage, social security, medicare, welfare, and so forth... Naturally some people would become wealthier (paying down existing debts) and some people would become poorer (spending money more rapidly and increasing their debt burden), but these are personal decisions.

pkaye 10y ago
So you are taking money out of social security and medicare which currently people earned (you return is somewhat proportional to how much taxes you paid) into a general pool? In that case, we should start applying FICA taxes on investment income also then because then it is a general tax.
- Jarwain 10y ago
  I would think that medicare becomes a sort of single-payer system; you get the same Basic Income and the costs of the insurance come from the pool. I do think that some aspects of our tax system could be reworked. Creating a wealth tax and removing income and other redundant taxes seems to be a popular idea[1] [1](http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequality-tax-wealth-not-income.html http://www.nytimes.com/2012/11/19/opinion/to-reduce-inequali...)
- gertef 10y ago
  money is fungible, and SS benefits are extremely extremely loosely proportional to how much taxes you paid.
chimeracoder 10y ago
> Think about it like this in the US: Imagine giving everybody a basic income and eliminating minimum wage, social security, medicare, welfare, and so forth... What happens when someone inevitably spends their entire income on non-essential expenses, or bets it all on black, or gets talked into making a bad investment, leaving them with no money in the bank? Do we just tell them, "well, suck it up and get a job"? "Sorry, you can't feed yourself because you made your choice on how to spend your money"? Replacing all other entitlement programs with a cash handout is a political non-starter.