4 ms·

I think it works best as a negative income tax. If you make no money, you get a refundable credit up to, say $25k/year. This would phase out as you earn income,

by imgabe 10y ago

I think it works best as a negative income tax. If you make no money, you get a refundable credit up to, say $25k/year. This would phase out as you earn income, so that once you're earning over $25k you're paying in and not getting the credit. This way people still have an incentive to work if they want more, but they won't starve if they earn less. This way you're not giving a flat $25k to someone who's already earning $100k. But if that person loses their job, they'll still get enough to live on.

petra 10y ago
Without a reasonable estimate on how much money that will require that's still very vague.
adangert 10y ago
True but you don't want to incentivize not working though
- ant6n 10y ago
  The incentive to work comes from making the basic income "minimal", but also from allowing people to keep the first couple of thousand they make. Right now if you receive welfare, and you make a dollar, you lose a dollar of welfare. That's the actual disincentive to work.
- matt4077 10y ago
  Actually, you (they) kinda do want to incentivise not working. The idea is that, currently, "not working" is dis-incentivised to such a degree that it creates more problems than it solves. Consider: - For currently unemployed people: are they lacking in motivation, or in ability? - For people who legitimately cannot find employment: is it moral to expose them to policies aimed at punishing 'freeloaders'? - Considering existing work-requirements even for basic assistance with food and housing: is it correct to say these operate from a model of human motivation where people stop trying as soon as they can afford the basic necessities of life? - Do you stop trying as soon as you know you have enough food and a roof over your head for the foreseeable future? - Do you know anybody who does that? - If people are forced into jobs with the thread of starvation or homelessness, what are the trade-offs they are required to make? I. e. to what degree is this forcing short-termism, and hindering their ability to invest time into, for example, education? - To what degree does the looming threat of starvation compromise the position of low-income workers in negotiations with employers? - Consider some model citizen from the lower middle class that you can think of: maybe a factory worker from the midwest, or an accountant's clerk in Houston, whatever... They have been gainfully employed for all their (adult) life, and will be for the foreseeable future. Question: How much needless anxiety is that person possibly experiencing, because they are just some random economic events away from complete destitution? - To what degree could society profit by mitigating some of the risks associated with attempting something new?
chumali 10y ago
If the amount you receive is inversely proportional to how much you earn then this effectively creates a marginal tax on earnings, therefore creating a disincentive to seek further employment for fear of losing existing benefits. This is one of the main problems UBI seeks to address by not being means tested like current benefits. If instead of phasing out the earned credit for any earnings below $25k/year it was just withdrawn above that threshold (an effective marginal tax rate of 100% beteen $25k-$50k/year) then you would get clustering of incomes at just under $25k/year with no incomes between $25k-$50k/year. Potentially you could phase it out starting at $25k as arguably the incentive effects are less pronounced at higher incomes. Obviously this could not be considered universal however.
- jfoutz 10y ago
  As a concrete example, the original formulation was a 2 for 1 tax credit. Let's say taxes are 10% if BI is $1000 dollars, and you earn no money, you get $1000. if you earn $500, ($50 in taxes), you get 2 for one credits, so that pulls $25 out of your 1000, you take home $500 for working, and $975 for BI. if you earn $100000, $10000 in taxes, you get a 2 for one credit, so only $8000 in taxes. BI makes it always better to earn some money. People always seem to forget the tax credit side, and assume we're just writing everyone a check.
- imgabe 10y ago
  I think I get what you're saying, and that's the problem with the hard cutoffs we have for aid now. Wouldn't it be solved by just making it completely smooth up to 25k/year? If you earn $0, you get $25k. If you earn $10k, you get $15k If you earn $24999, you get a $1 credit. Anything $25k and up, you get 0 credits, with a progressive tax scheme to support the above. I guess it's not "universal" per se, but the only means testing would be to figure out how much income you made, which the government already does in the course of collecting income taxes anyway.
  - schrodinger 10y ago
    What's the point in taking a $10k a year job in that hypothetical implementation?

by imgabe 10y ago

petra 10y ago

Without a reasonable estimate on how much money that will require that's still very vague.

adangert 10y ago

True but you don't want to incentivize not working though

ant6n 10y ago
The incentive to work comes from making the basic income "minimal", but also from allowing people to keep the first couple of thousand they make. Right now if you receive welfare, and you make a dollar, you lose a dollar of welfare. That's the actual disincentive to work.
matt4077 10y ago
Actually, you (they) kinda do want to incentivise not working. The idea is that, currently, "not working" is dis-incentivised to such a degree that it creates more problems than it solves. Consider: - For currently unemployed people: are they lacking in motivation, or in ability? - For people who legitimately cannot find employment: is it moral to expose them to policies aimed at punishing 'freeloaders'? - Considering existing work-requirements even for basic assistance with food and housing: is it correct to say these operate from a model of human motivation where people stop trying as soon as they can afford the basic necessities of life? - Do you stop trying as soon as you know you have enough food and a roof over your head for the foreseeable future? - Do you know anybody who does that? - If people are forced into jobs with the thread of starvation or homelessness, what are the trade-offs they are required to make? I. e. to what degree is this forcing short-termism, and hindering their ability to invest time into, for example, education? - To what degree does the looming threat of starvation compromise the position of low-income workers in negotiations with employers? - Consider some model citizen from the lower middle class that you can think of: maybe a factory worker from the midwest, or an accountant's clerk in Houston, whatever... They have been gainfully employed for all their (adult) life, and will be for the foreseeable future. Question: How much needless anxiety is that person possibly experiencing, because they are just some random economic events away from complete destitution? - To what degree could society profit by mitigating some of the risks associated with attempting something new?

chumali 10y ago

If the amount you receive is inversely proportional to how much you earn then this effectively creates a marginal tax on earnings, therefore creating a disincentive to seek further employment for fear of losing existing benefits. This is one of the main problems UBI seeks to address by not being means tested like current benefits. If instead of phasing out the earned credit for any earnings below $25k/year it was just withdrawn above that threshold (an effective marginal tax rate of 100% beteen $25k-$50k/year) then you would get clustering of incomes at just under $25k/year with no incomes between $25k-$50k/year. Potentially you could phase it out starting at $25k as arguably the incentive effects are less pronounced at higher incomes. Obviously this could not be considered universal however.

jfoutz 10y ago
As a concrete example, the original formulation was a 2 for 1 tax credit. Let's say taxes are 10% if BI is $1000 dollars, and you earn no money, you get $1000. if you earn $500, ($50 in taxes), you get 2 for one credits, so that pulls $25 out of your 1000, you take home $500 for working, and $975 for BI. if you earn $100000, $10000 in taxes, you get a 2 for one credit, so only $8000 in taxes. BI makes it always better to earn some money. People always seem to forget the tax credit side, and assume we're just writing everyone a check.
imgabe 10y ago
I think I get what you're saying, and that's the problem with the hard cutoffs we have for aid now. Wouldn't it be solved by just making it completely smooth up to 25k/year? If you earn $0, you get $25k. If you earn $10k, you get $15k If you earn $24999, you get a $1 credit. Anything $25k and up, you get 0 credits, with a progressive tax scheme to support the above. I guess it's not "universal" per se, but the only means testing would be to figure out how much income you made, which the government already does in the course of collecting income taxes anyway.
- schrodinger 10y ago
  What's the point in taking a $10k a year job in that hypothetical implementation?