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The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from t

by runeks 9y ago

The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from taxes. This makes it impossible to know how much money the government will have to pay out a basic income next year. So a family that has gotten used to, say, $15,000 in basic income one year, may only get half of that the next year, because government can't predict its tax income for the next year. Add to this the fact that basic income takes away, at least some of, the reason to work in the first place, which means that the very foundation of governments paying out basic incomes -- income from taxation -- is affected by paying out basic income. The result is an unstable system with feedback loops, where paying out a lot of basic income one year results in fewer taxes the next year, which means the government has less money to pay out in basic income that year, causing people to need to a job, which increases taxes the next year, after which the government can pay out more in basic income. Predicting this oscillation is essential to making basic income work, and I'm not confident it's possible at all, at least not when we need to be as sure about it as we do when we're talking about money that people need to buy food.

jknz 9y ago
This criticism also applies to unemployment benefits in western European countries. If a large chunk of the population suddenly becomes unemployed, then the gov has less tax revenue but more employment benefits to cover. Unemployment benefits cannot be guaranteed without either expanding the national debt or printing money. A sane government behavior would be to spend in year n the known tax revenue of year (n-1), and nothing more.
- ZeroGravitas 9y ago
  And this is in fact sometimes suggested as one of the key benefits. If an area suddently has a lot of people out of work with no safety net it causes a ripple effect as they curtail their spending massively at local businesses, and the next domino gets toppled. With unemployment benefit the goverment automatically injects cash into the area to forstall this outcome.
aetherson 9y ago
The government manages to fund the military and social security and medicare despite the fact that tax returns vary from year to year. It can deficit spend and inflate the currency as needed. In the very long term, nothing is guaranteed, but there is no basis to believe that the tax base will drop by 50% next year, and ample reason to believe the contrary.
learc83 9y ago
>where paying out a lot of basic income one year results in fewer taxes the next year, which means the government has less money to pay out in basic income that year, causing people to need to a job, which increases taxes the next year, after which the government can pay out more in basic income. There are problems that need to be solved, but the one you have here you just invented. Government programs don't work like this. They aren't pegged to revenue. The problem you described with oscillations and feedback loops is exactly one of the primary criticisms of attempts at forcing the government to balance the budget each year.
jhayward 9y ago
Government spending does not work like household budgeting. There is no significant reason for revenue and expenditure to be matched over any given period. There is almost literally nothing one can intuit about how government spending works that compares it to households or individual spending.
bbctol 9y ago
What? The government sets budgets for the long term all the time, even leaving aside the fact that it's pretty able to predict its tax income for the next year.
dragonwriter 9y ago
> The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from taxes. This makes it impossible to know how much money the government will have to pay out a basic income next year. So a family that has gotten used to, say, $15,000 in basic income one year, may only get half of that the next year, because government can't predict its tax income for the next year. This is only a problem for a government constrained to short-term budget balance (U.S. states largely are for their operating budgets, but the federal government is not.)

by runeks 9y ago

jknz 9y ago

This criticism also applies to unemployment benefits in western European countries. If a large chunk of the population suddenly becomes unemployed, then the gov has less tax revenue but more employment benefits to cover. Unemployment benefits cannot be guaranteed without either expanding the national debt or printing money. A sane government behavior would be to spend in year n the known tax revenue of year (n-1), and nothing more.

ZeroGravitas 9y ago
And this is in fact sometimes suggested as one of the key benefits. If an area suddently has a lot of people out of work with no safety net it causes a ripple effect as they curtail their spending massively at local businesses, and the next domino gets toppled. With unemployment benefit the goverment automatically injects cash into the area to forstall this outcome.

aetherson 9y ago

The government manages to fund the military and social security and medicare despite the fact that tax returns vary from year to year. It can deficit spend and inflate the currency as needed. In the very long term, nothing is guaranteed, but there is no basis to believe that the tax base will drop by 50% next year, and ample reason to believe the contrary.

learc83 9y ago

>where paying out a lot of basic income one year results in fewer taxes the next year, which means the government has less money to pay out in basic income that year, causing people to need to a job, which increases taxes the next year, after which the government can pay out more in basic income. There are problems that need to be solved, but the one you have here you just invented. Government programs don't work like this. They aren't pegged to revenue. The problem you described with oscillations and feedback loops is exactly one of the primary criticisms of attempts at forcing the government to balance the budget each year.

jhayward 9y ago

Government spending does not work like household budgeting. There is no significant reason for revenue and expenditure to be matched over any given period. There is almost literally nothing one can intuit about how government spending works that compares it to households or individual spending.

bbctol 9y ago

What? The government sets budgets for the long term all the time, even leaving aside the fact that it's pretty able to predict its tax income for the next year.

dragonwriter 9y ago

> The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from taxes. This makes it impossible to know how much money the government will have to pay out a basic income next year. So a family that has gotten used to, say, $15,000 in basic income one year, may only get half of that the next year, because government can't predict its tax income for the next year. This is only a problem for a government constrained to short-term budget balance (U.S. states largely are for their operating budgets, but the federal government is not.)