4 ms·

Set the income tax rate to 100 %, give an equal share of that money to every citizen. That should check all three boxes, shouldn't it?

by danbruc 10y ago

BenjiWiebe 10y ago
Personally I wouldn't bother working very hard if income tax was 100%.
- danbruc 10y ago
  The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic income scheme or otherwise. That my example is exceptionally poor in this regard should not matter too much for the point addressed unless you want to hint at a problem with sustainability. That might or might not be the case depending on the behavior of the people but given that universal basic income proponents argue that people would not get lazy and exploit the system I am happy to make that assumption. In case that turns out to be false, it is certainly possible to tweak the scheme in such a way that there remains an incentive not to become lazy, for example by lowering the 100 % tax rate but still keeping it high.
  - AnimalMuppet 10y ago
    Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free. Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.
    - danbruc 10y ago
      First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services. You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.
  - orangecat 10y ago
    The point of the UBI is that we are already giving things away for free, and we're doing it inefficiently and creating bad incentives in the process. Right now it's entirely possible for a low-income worker to get a raise and end up worse off, because they cross the threshold for a means-tested program and lose more in benefits than the amount of the rais. The question shouldn't be "would a UBI discourage work", it should be "would a UBI discourage work more than the current system does", and there are strong arguments that it would not.
dllthomas 10y ago
Given just how poor the incentives wind up being, I think with current technology that it would be unlikely to tick the second box.
- danbruc 10y ago
  That is a general problem with universal basic income schemes. Unless technology and automation is advanced enough to provide goods and services for basics needs without requiring any labor at all, the scheme will fail in the worst case, i.e. everyone decides to stop working. And there is not much you can do against that, at best you can devise an incentive structure that makes it unlikely that you will hit the worst case scenario. But without robots doing all the work, there is no way such a scheme can work unconditionally no matter how the people are deciding to live their lives.
  - dllthomas 10y ago
    > Unless technology and automation is advanced enough to provide goods and services for basics needs without requiring any labor at all, the scheme will fail in the worst case, i.e. everyone decides to stop working. I mean, of course the scheme will fail if everyone stops working. But if not enough people are working to make enough stuff to satisfy demand, you'll see inflation, the BI will fall below someone's comfort level, and they'll get to work. This assumes you don't peg the BI to actual or expected inflation - don't do that! (Another way of phrasing this - In theory a scheme can be unconditional in nominal terms while allowed to float in real terms, and ideally the feedback will allow us to keep real value distributed at some optimal level based on what society can bear. Whether that can translate into practice is an open question.)
    - danbruc 9y ago
      If you understand it this way, then why wouldn't my original example be sufficient? The incentive structure might be really bad, but once you start starving you should certainly consider working again. Actually it seems almost everything would be workable in this way. Unless you structure a system in a way that it is simply unable to produce the required goods and services or makes access to them impossible for at least some, then at some ultimate point life threatening forces will set the incentives. In reality, I guess, people would just overthrow your shitty system or circumvent it with black markets. So after thinking a bit longer about this, the requirements given in the initial comment seem not to be as straight forward as they may appear at first. What does sustainable mean? Is it sustainable if we make use of hunger to convince people to work? Is it implementable at the current population level if it entails something that the current population would never accept, say for ideological or religious reasons?

Set the income tax rate to 100 %, give an equal share of that money to every citizen. That should check all three boxes, shouldn't it?

by danbruc 10y ago

Set the income tax rate to 100 %, give an equal share of that money to every citizen. That should check all three boxes, shouldn't it?

BenjiWiebe 10y ago

Personally I wouldn't bother working very hard if income tax was 100%.

danbruc 10y ago
The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic income scheme or otherwise. That my example is exceptionally poor in this regard should not matter too much for the point addressed unless you want to hint at a problem with sustainability. That might or might not be the case depending on the behavior of the people but given that universal basic income proponents argue that people would not get lazy and exploit the system I am happy to make that assumption. In case that turns out to be false, it is certainly possible to tweak the scheme in such a way that there remains an incentive not to become lazy, for example by lowering the 100 % tax rate but still keeping it high.
- AnimalMuppet 10y ago
  Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free. Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.
  - danbruc 10y ago
    First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services. You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.
- orangecat 10y ago
  The point of the UBI is that we are already giving things away for free, and we're doing it inefficiently and creating bad incentives in the process. Right now it's entirely possible for a low-income worker to get a raise and end up worse off, because they cross the threshold for a means-tested program and lose more in benefits than the amount of the rais. The question shouldn't be "would a UBI discourage work", it should be "would a UBI discourage work more than the current system does", and there are strong arguments that it would not.

dllthomas 10y ago

Given just how poor the incentives wind up being, I think with current technology that it would be unlikely to tick the second box.

danbruc 10y ago
That is a general problem with universal basic income schemes. Unless technology and automation is advanced enough to provide goods and services for basics needs without requiring any labor at all, the scheme will fail in the worst case, i.e. everyone decides to stop working. And there is not much you can do against that, at best you can devise an incentive structure that makes it unlikely that you will hit the worst case scenario. But without robots doing all the work, there is no way such a scheme can work unconditionally no matter how the people are deciding to live their lives.
- dllthomas 10y ago
  > Unless technology and automation is advanced enough to provide goods and services for basics needs without requiring any labor at all, the scheme will fail in the worst case, i.e. everyone decides to stop working. I mean, of course the scheme will fail if everyone stops working. But if not enough people are working to make enough stuff to satisfy demand, you'll see inflation, the BI will fall below someone's comfort level, and they'll get to work. This assumes you don't peg the BI to actual or expected inflation - don't do that! (Another way of phrasing this - In theory a scheme can be unconditional in nominal terms while allowed to float in real terms, and ideally the feedback will allow us to keep real value distributed at some optimal level based on what society can bear. Whether that can translate into practice is an open question.)
  - danbruc 9y ago
    If you understand it this way, then why wouldn't my original example be sufficient? The incentive structure might be really bad, but once you start starving you should certainly consider working again. Actually it seems almost everything would be workable in this way. Unless you structure a system in a way that it is simply unable to produce the required goods and services or makes access to them impossible for at least some, then at some ultimate point life threatening forces will set the incentives. In reality, I guess, people would just overthrow your shitty system or circumvent it with black markets. So after thinking a bit longer about this, the requirements given in the initial comment seem not to be as straight forward as they may appear at first. What does sustainable mean? Is it sustainable if we make use of hunger to convince people to work? Is it implementable at the current population level if it entails something that the current population would never accept, say for ideological or religious reasons?