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Doing some back of the envelope math, US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play wit

Doing some back of the envelope math, US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with. How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.

deadmetheny 9y ago
It wouldn't. That's exactly why UBI doesn't pass muster - the per capita is much higher since 323 million is the entire population, disregarding the unemployed, children, retired, etc. Then you still have to have the requisite safety nets for people too irresponsible to handle a direct UBI cash infusion, or set up even more bureaucracies that handle housing credits, food credits, etc. It just leads to an expensive sprawling bureaucratic nightmare where the end result is even more expensive government services, and prices inevitably end up rising because suddenly everyone has all this extra money to spend that's guaranteed. The numbers haven't ever and will never add up, unless you just advocate straight-up jacking the taxes on the upper brackets sky-high.
- evanlivingston 9y ago
  Yes, I advocate that.
Danihan 9y ago
The math doesn't work and has never worked. UBI proponents will never talk math because it doesn't add up, even with the most casual analysis. $12k is the cited number that you see a lot in basic income discussions. That's just over the poverty level. That's not enough to live on and it's practically a bonus for some members of this site. It's not enough to do anything with. Even upon receiving that, many people would still work massive hours to obtain the best house on the block. But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. As you stated, that IS the entire budget. Now basic income advocates will say you can make up some if not most of that by cutting welfare programs, but given the nature of welfare programs - good luck. That UBI stipend is also not enough to pay for healthcare, so you can't cut that. How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too? I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today. There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare reform is honestly about the last problem we'd need to discuss.
- drb91 9y ago
  I mean, tax the hell out of wealth. The math has never been the problem; it's always been taxing the wealthy that causes the conversation to die.
  - stcredzero 9y ago
    The math has never been the problem; it's always been taxing the wealthy that causes the conversation to die. The problem with taxing the wealthy, is that they generally have an outsized share of the political power. I think that a better solution, from a political and psychological standpoint, would involve a voluntary system. If just rent could be covered, this would be the equivalent of $12k per year in many parts of the US: http://www.elledecor.com/life-culture/news/a7635/german-village-with-88-cent-rent/ http://www.elledecor.com/life-culture/news/a7635/german-vill...
    - frgtpsswrdlame 9y ago
      >The problem with taxing the wealthy, is that they generally have an outsized share of the political power. I think that a better solution, from a political and psychological standpoint, would involve a voluntary system. If just rent could be covered, this would be the equivalent of $12k per year in many parts of the US: By voluntary system you mean the wealthy voluntarily turning over the wealth that they won't let us tax them for? It doesn't make sense.
      - stcredzero 9y ago
        By voluntary system you mean the wealthy voluntarily turning over the wealth that they won't let us tax them for? It doesn't make sense. Many other cultures have a gift economy, where the powerful voluntarily redistribute their wealth in exchange for status. Culture is very powerful, often overpowering pure economics. Warren Buffet and Bill Gates have already pledged huge fractions of their wealth towards the common good. On the other hand, the historical record on politically forcing the wealthy to hand over their wealth also supports the notion of voluntarism. It's the society and culture which are the overarching influences. If we changed the culture such that trusts supporting intentional communities were the way the wealthy could have a meaningful impact and legacy, then we could conceivably house over half of the US in virtually free housing. Arguably, living, thriving creative communities would be far more meaningful than plaques in a museum, park benches, and buildings on a college campus. (Colleges are over-funded and in a bubble as it is.)
cm2012 9y ago
BI would get marginally smaller the more money you make. Not a steep cutoff like current services for poor, but it would probably be taxed as income so someone making 20'l,000 gets the full 7k, someone making 150k makes 3.5k.
- bduerst 9y ago
  Is this Sam Altman's version of UBI? Because I've heard everything from what you're saying, to negative income tax, and to flat, unweighted income for everyone.
- astrocat 9y ago
  Isn't the whole point of UBI that it isn't progressive, but rather universal? Otherwise, it's essentially just another form of progressive income tax, where the bottom of the scale is a negative income tax. Right?
  - frgtpsswrdlame 9y ago
    Well UBI is going to be funded by a progressive income tax regardless. We can toss "Universal" around all we like but the reality is that the rich are going to net lose and the poor will net win.
  - kim_waxkoz 9y ago
    completely wrong and frankly im shocked you have the gaul to think so
  - maxerickson 9y ago
    The universal part just means there's not much process associated with it, you just get the payment.
badestrand 9y ago
Obviously the UBI would be a redistribution of money and not "everyone gets X more". Imagine the average guy getting 20k/yr in UBI while also paying 20k/yr more in taxes. As taxes are in % and UBI is fix, generally rich people would end up with less and poor people and families with more money.
davmre 9y ago
One possible mechanism is a social wealth fund that would gradually come to own (and distribute the proceeds from) a nontrivial portion of the national capital. Matt Bruenig wrote a NYTimes oped about this idea: https://www.nytimes.com/2017/11/30/opinion/inequality-social-wealth-fund.html https://www.nytimes.com/2017/11/30/opinion/inequality-social... with some suggestions for populating the fund: > Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? Some of the concrete ways this could happen are through the transfer of existing federal assets like land, buildings and portions of the wireless spectrum into the new fund. Other measures could include increases in taxes on capital that affect mostly the wealthy such as estate, dividend and financial transaction taxes and the creation of a new type of corporate tax that requires companies to directly issue new shares to the social wealth fund on an annual basis and during certain corporate moves such as initial public offerings, mergers and acquisitions. > Another way to bring assets into the fund would be to modify the way the Federal Reserve pumps money into the economy. Currently, the central bank does that by buying up Treasury bonds. If instead we used newly created money to buy up stocks that are then deposited into the social wealth fund, it would gradually socialize wealth ownership without the need to raise taxes on anyone. As Roger Farmer and Miles Kimball have argued, these kinds of asset purchases could also be ramped up during recessions, allowing the federal government to acquire significant portions of the national wealth relatively cheaply while also stabilizing financial markets and stimulating the economy." Noah Smith makes the additional economic case that a social wealth fund is a buffer against decreasing labor share of income driven by technological change: https://www.bloomberg.com/view/articles/2017-12-05/robot-takeover-matters-less-if-we-re-all-shareholders https://www.bloomberg.com/view/articles/2017-12-05/robot-tak...
- coffeemug 9y ago
  Thanks for pointing to this; I've heard of the idea before, but never as cogently argued for. The NYT article is a really, really good read.
- creaghpatr 9y ago
  I mean sure, you could seize the means of production and capital and pump a bunch of currency into the economy, but that's just textbook communism. This is literally what Venezuela did with its oil supply.
Density 9y ago
I'd like to do what the GOP did for the tax break and claim that the increase to the GDP by this additional influx of money will vastly increase our growth by an unrealistic amount!
Suncho 9y ago
> Doing some back of the envelope math, US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with. The government doesn't face what we would think of as a typical budget constraint. There is a limit to how much money the government can spend, but that limit is determined by how much spending the productive economy can absorb without causing inflation or interest rates or taxes that are too high. It's the amount that closes the output gap without attempting to push past it. The only way we can discover the appropriate amount of basic income by gradually ramping it up until further incremental increases no longer provide a benefit.
dragonwriter 9y ago
> Doing some back of the envelope math, US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with. > How would a BI work By increasing revenue, for one thing. > Seems like BI would need big tax increases to become viable. Yes, essentially no one, including BI proponents, disputes this.
LrnByTeach 9y ago
Interesting numbers !!! > US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with. > How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.
TheSpiceIsLife 9y ago
I thought the idea is that as you earn more from working / investments your UBI payment would be decreased, so that only those who earn below a particular threshold receive the full rate.
- tom_mellior 9y ago
  No two people agree exactly on their preferred UBI model, but I think the mainstream idea is giving everyone the exact same amount. Those who have higher income will then pay more in (progressive) taxes. This way there is no need for an extra means testing bureaucracy.
nkoren 9y ago
I left a rather hot-blooded response to somebody else below, but given that your question is obviously sincere, I'll post a redacted version of it here (this is probably bad HN form, sorry): The trick with Universal Basic Income is that it Universal. It is paid to everyone. That means everyone is both a contributor to it and a recipient of it. So you can't add up the cost without also considering the benefit. If you give me ten dollars and I give you nine dollars, it doesn't mean that you're down by ten dollars. UBI must be looked at in this way. At a national level, it's just a straightforward cash transfer. The national cost plus the national benefit would simply be zero. But of course what people are really interested in is how much it would cost them. The per capita Gross National Income is $58,000. To extract a $12,000 UBI from that $58,000 -- via a simple individual flat-tax -- would require a 20% tax rate. However, the person making $58,000 would also receive $12,000 per year in UBI. So they would pay $12k and receive $12k, making the total cost to them zero. Of course the person earning earning $100k will also have to pay 20%, and they of would only receive $12,000 back as UBI -- putting them -$20k + $12k = $8k out of pocket. So for everyone earning $100k, the cost of UBI is 8% of their net income. Actually -- because about a quarter of this UBI could replace existing benefits programs, the tax increase would be closer to 8% * 75% = 6%. So although it would notionally require a 20% tax increase (or 15%, if you account for the savings it would create), for the vast majority of Americans it would cost nothing, and for no American would it cast more than 20%. Here is how it would break down: Income pre-UBI | Income post-UBI | cost/benefit | Tax increase | % of Americans at or below [1] ---------------|-----------------|--------------|--------------|--------------- $0 | $12,000 | + $12,000 | N/A | $20,000 | $28,000 | + $8,000 | N/A | 35% $40,000 | $44,000 | + $4,000 | N/A | 61% $60,000 | $60,000 | N/A | N/A | 77% $80,000 | $76,000 | - $4,000 | 5% (4%) | 86% $100,000 | $92,000 | - $8,000 | 8% (6%) | 91% $120,000 | $108,000 | - $12,000 | 10% (7.5%) | 93% (?) And those are the hard numbers. To support a national income UBI of $12,000 via a simple, equitable flat-tax, this is what it would take. 77% of Americans would pay nothing and would in fact be net beneficiaries. 9% of Americans would pay up to 4% in additional taxes. 5% of Americans would pay up to 6% in additional taxes. 3% of Americans would pay up to 7.5% in additional taxes, and so forth. A very very small number of billionaires would see an effective tax increase of 20%. THAT is how you finance a UBI. 1: https://en.wikipedia.org/wiki/Personal_income_in_the_United_States https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
tom_mellior 9y ago
> 3k for military That's an interesting point, especially concerning the US. My understanding is that many (not all) people join the US military mainly because they can't get other jobs or find other ways to finance college. With the UBI, this motivation will disappear, and with it a whole lot of military spending.
refurb 9y ago
One argument, although I haven't run the numbers, is that most of the money would be clawed back for anyone making over a certain income level. Below that, the person is able to keep an increasing amount of money. So net-net, it's only the bottom end of the income levels that keep the entire payment.

deadmetheny 9y ago

It wouldn't. That's exactly why UBI doesn't pass muster - the per capita is much higher since 323 million is the entire population, disregarding the unemployed, children, retired, etc. Then you still have to have the requisite safety nets for people too irresponsible to handle a direct UBI cash infusion, or set up even more bureaucracies that handle housing credits, food credits, etc. It just leads to an expensive sprawling bureaucratic nightmare where the end result is even more expensive government services, and prices inevitably end up rising because suddenly everyone has all this extra money to spend that's guaranteed. The numbers haven't ever and will never add up, unless you just advocate straight-up jacking the taxes on the upper brackets sky-high.

evanlivingston 9y ago
Yes, I advocate that.

Danihan 9y ago

The math doesn't work and has never worked. UBI proponents will never talk math because it doesn't add up, even with the most casual analysis. $12k is the cited number that you see a lot in basic income discussions. That's just over the poverty level. That's not enough to live on and it's practically a bonus for some members of this site. It's not enough to do anything with. Even upon receiving that, many people would still work massive hours to obtain the best house on the block. But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. As you stated, that IS the entire budget. Now basic income advocates will say you can make up some if not most of that by cutting welfare programs, but given the nature of welfare programs - good luck. That UBI stipend is also not enough to pay for healthcare, so you can't cut that. How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too? I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today. There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare reform is honestly about the last problem we'd need to discuss.

drb91 9y ago
I mean, tax the hell out of wealth. The math has never been the problem; it's always been taxing the wealthy that causes the conversation to die.
- stcredzero 9y ago
  The math has never been the problem; it's always been taxing the wealthy that causes the conversation to die. The problem with taxing the wealthy, is that they generally have an outsized share of the political power. I think that a better solution, from a political and psychological standpoint, would involve a voluntary system. If just rent could be covered, this would be the equivalent of $12k per year in many parts of the US: http://www.elledecor.com/life-culture/news/a7635/german-village-with-88-cent-rent/ http://www.elledecor.com/life-culture/news/a7635/german-vill...
  - frgtpsswrdlame 9y ago
    >The problem with taxing the wealthy, is that they generally have an outsized share of the political power. I think that a better solution, from a political and psychological standpoint, would involve a voluntary system. If just rent could be covered, this would be the equivalent of $12k per year in many parts of the US: By voluntary system you mean the wealthy voluntarily turning over the wealth that they won't let us tax them for? It doesn't make sense.
    - stcredzero 9y ago
      By voluntary system you mean the wealthy voluntarily turning over the wealth that they won't let us tax them for? It doesn't make sense. Many other cultures have a gift economy, where the powerful voluntarily redistribute their wealth in exchange for status. Culture is very powerful, often overpowering pure economics. Warren Buffet and Bill Gates have already pledged huge fractions of their wealth towards the common good. On the other hand, the historical record on politically forcing the wealthy to hand over their wealth also supports the notion of voluntarism. It's the society and culture which are the overarching influences. If we changed the culture such that trusts supporting intentional communities were the way the wealthy could have a meaningful impact and legacy, then we could conceivably house over half of the US in virtually free housing. Arguably, living, thriving creative communities would be far more meaningful than plaques in a museum, park benches, and buildings on a college campus. (Colleges are over-funded and in a bubble as it is.)

cm2012 9y ago

BI would get marginally smaller the more money you make. Not a steep cutoff like current services for poor, but it would probably be taxed as income so someone making 20'l,000 gets the full 7k, someone making 150k makes 3.5k.

bduerst 9y ago
Is this Sam Altman's version of UBI? Because I've heard everything from what you're saying, to negative income tax, and to flat, unweighted income for everyone.
astrocat 9y ago
Isn't the whole point of UBI that it isn't progressive, but rather universal? Otherwise, it's essentially just another form of progressive income tax, where the bottom of the scale is a negative income tax. Right?
- frgtpsswrdlame 9y ago
  Well UBI is going to be funded by a progressive income tax regardless. We can toss "Universal" around all we like but the reality is that the rich are going to net lose and the poor will net win.
- kim_waxkoz 9y ago
  completely wrong and frankly im shocked you have the gaul to think so
- maxerickson 9y ago
  The universal part just means there's not much process associated with it, you just get the payment.

badestrand 9y ago

Obviously the UBI would be a redistribution of money and not "everyone gets X more". Imagine the average guy getting 20k/yr in UBI while also paying 20k/yr more in taxes. As taxes are in % and UBI is fix, generally rich people would end up with less and poor people and families with more money.

davmre 9y ago

One possible mechanism is a social wealth fund that would gradually come to own (and distribute the proceeds from) a nontrivial portion of the national capital. Matt Bruenig wrote a NYTimes oped about this idea: https://www.nytimes.com/2017/11/30/opinion/inequality-social-wealth-fund.html https://www.nytimes.com/2017/11/30/opinion/inequality-social... with some suggestions for populating the fund: > Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? Some of the concrete ways this could happen are through the transfer of existing federal assets like land, buildings and portions of the wireless spectrum into the new fund. Other measures could include increases in taxes on capital that affect mostly the wealthy such as estate, dividend and financial transaction taxes and the creation of a new type of corporate tax that requires companies to directly issue new shares to the social wealth fund on an annual basis and during certain corporate moves such as initial public offerings, mergers and acquisitions. > Another way to bring assets into the fund would be to modify the way the Federal Reserve pumps money into the economy. Currently, the central bank does that by buying up Treasury bonds. If instead we used newly created money to buy up stocks that are then deposited into the social wealth fund, it would gradually socialize wealth ownership without the need to raise taxes on anyone. As Roger Farmer and Miles Kimball have argued, these kinds of asset purchases could also be ramped up during recessions, allowing the federal government to acquire significant portions of the national wealth relatively cheaply while also stabilizing financial markets and stimulating the economy." Noah Smith makes the additional economic case that a social wealth fund is a buffer against decreasing labor share of income driven by technological change: https://www.bloomberg.com/view/articles/2017-12-05/robot-takeover-matters-less-if-we-re-all-shareholders https://www.bloomberg.com/view/articles/2017-12-05/robot-tak...

coffeemug 9y ago
Thanks for pointing to this; I've heard of the idea before, but never as cogently argued for. The NYT article is a really, really good read.
creaghpatr 9y ago
I mean sure, you could seize the means of production and capital and pump a bunch of currency into the economy, but that's just textbook communism. This is literally what Venezuela did with its oil supply.

Density 9y ago

I'd like to do what the GOP did for the tax break and claim that the increase to the GDP by this additional influx of money will vastly increase our growth by an unrealistic amount!

Suncho 9y ago

> Doing some back of the envelope math, US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with. The government doesn't face what we would think of as a typical budget constraint. There is a limit to how much money the government can spend, but that limit is determined by how much spending the productive economy can absorb without causing inflation or interest rates or taxes that are too high. It's the amount that closes the output gap without attempting to push past it. The only way we can discover the appropriate amount of basic income by gradually ramping it up until further incremental increases no longer provide a benefit.

dragonwriter 9y ago

> Doing some back of the envelope math, US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with. > How would a BI work By increasing revenue, for one thing. > Seems like BI would need big tax increases to become viable. Yes, essentially no one, including BI proponents, disputes this.

LrnByTeach 9y ago

Interesting numbers !!! > US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with. > How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.

TheSpiceIsLife 9y ago

I thought the idea is that as you earn more from working / investments your UBI payment would be decreased, so that only those who earn below a particular threshold receive the full rate.

tom_mellior 9y ago
No two people agree exactly on their preferred UBI model, but I think the mainstream idea is giving everyone the exact same amount. Those who have higher income will then pay more in (progressive) taxes. This way there is no need for an extra means testing bureaucracy.

nkoren 9y ago

I left a rather hot-blooded response to somebody else below, but given that your question is obviously sincere, I'll post a redacted version of it here (this is probably bad HN form, sorry): The trick with Universal Basic Income is that it Universal. It is paid to everyone. That means everyone is both a contributor to it and a recipient of it. So you can't add up the cost without also considering the benefit. If you give me ten dollars and I give you nine dollars, it doesn't mean that you're down by ten dollars. UBI must be looked at in this way. At a national level, it's just a straightforward cash transfer. The national cost plus the national benefit would simply be zero. But of course what people are really interested in is how much it would cost them. The per capita Gross National Income is $58,000. To extract a $12,000 UBI from that $58,000 -- via a simple individual flat-tax -- would require a 20% tax rate. However, the person making $58,000 would also receive $12,000 per year in UBI. So they would pay $12k and receive $12k, making the total cost to them zero. Of course the person earning earning $100k will also have to pay 20%, and they of would only receive $12,000 back as UBI -- putting them -$20k + $12k = $8k out of pocket. So for everyone earning $100k, the cost of UBI is 8% of their net income. Actually -- because about a quarter of this UBI could replace existing benefits programs, the tax increase would be closer to 8% * 75% = 6%. So although it would notionally require a 20% tax increase (or 15%, if you account for the savings it would create), for the vast majority of Americans it would cost nothing, and for no American would it cast more than 20%. Here is how it would break down: Income pre-UBI | Income post-UBI | cost/benefit | Tax increase | % of Americans at or below [1] ---------------|-----------------|--------------|--------------|--------------- $0 | $12,000 | + $12,000 | N/A | $20,000 | $28,000 | + $8,000 | N/A | 35% $40,000 | $44,000 | + $4,000 | N/A | 61% $60,000 | $60,000 | N/A | N/A | 77% $80,000 | $76,000 | - $4,000 | 5% (4%) | 86% $100,000 | $92,000 | - $8,000 | 8% (6%) | 91% $120,000 | $108,000 | - $12,000 | 10% (7.5%) | 93% (?) And those are the hard numbers. To support a national income UBI of $12,000 via a simple, equitable flat-tax, this is what it would take. 77% of Americans would pay nothing and would in fact be net beneficiaries. 9% of Americans would pay up to 4% in additional taxes. 5% of Americans would pay up to 6% in additional taxes. 3% of Americans would pay up to 7.5% in additional taxes, and so forth. A very very small number of billionaires would see an effective tax increase of 20%. THAT is how you finance a UBI. 1: https://en.wikipedia.org/wiki/Personal_income_in_the_United_States https://en.wikipedia.org/wiki/Personal_income_in_the_United_...

tom_mellior 9y ago

> 3k for military That's an interesting point, especially concerning the US. My understanding is that many (not all) people join the US military mainly because they can't get other jobs or find other ways to finance college. With the UBI, this motivation will disappear, and with it a whole lot of military spending.

refurb 9y ago

One argument, although I haven't run the numbers, is that most of the money would be clawed back for anyone making over a certain income level. Below that, the person is able to keep an increasing amount of money. So net-net, it's only the bottom end of the income levels that keep the entire payment.