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New Bill Would Give Nearly Every Californian $1,000/Month
- kingkawn 7y agoI do not understand the logic of excluding people who already receive social support benefits like Medicaid, as they are the ones who would benefit the most
- RaptorJ 7y agoWell I think you've identified the 'logic' exactly -- use UBI as a wedge to dismantle the welfare state.
- cmendel 7y ago...You think that the policy of "Give everyone 1000 USD per month" is designed to dismantle? the welfare state?
- joshuamorton 7y agoAlso it's funded with a VAT, not an income tax, so it very strongly resembles a FairTax plan which is...strange. Edit: "FairTax plan", not a "fair tax plan", apparently people on HN are less immediately familiar with the term than I expected.
- ajmurmann 7y agoIsn't VAT a regressive tax, since poor usually have to spend a lot larger percentage of their income than the wealthy? I thought that was generally considered less fair than a progressive tax?
- sgc 7y agoYes.
- numpad0 7y agoAgreed but fair is nuanced
- BurningFrog 7y agoWell... The good thing with a VAT is that it's very simple and hard to evade. Income taxes that are progressive on paper can become anything but with enough accountants massaging your accounts. But with a VAT, everyone just pays it. And those accountants can do productive work that benefits society.
- maxlybbert 7y agoI think the original comment should have been “sounds like a FairTax ( http://fairtax.org/ http://fairtax.org/ ) system.” The FairTax is a libertarian proposal for a national VAT or sales tax, but — to reduce the regressive effects of a sales tax — to send everybody a “pre-bate” (money equal to the tax a person would expect to pay for food, rent, etc.). I don’t know if the California bill is actually based on the FairTax proposal, but it does have both components, even if it uses different names.
- joshuamorton 7y agoYes, I was specifically talking about the FairTax scheme, which is a libertarian and oft-considered regressive tax scheme. Hence my bafflement at it being pushed by a seemingly liberal-for-california state legislator.
- onetimemanytime 7y agoFirst it's not happening. I can promise the moon, just elect me. But the idea is that everyone gets $xxx a month, and if you get SS you already have something.
- numpad0 7y agoI don’t either but I’ve heard the purpose of BI is to roll up every benefits into a single unconditional monetary compensation. If so, sort of logical. Whether BI is right or logical is probably an another discussion.
- pkaye 7y agoEven Social Security?
- pmoriarty 7y agoI also don't get how they can call it "Universal" when not everybody gets it.
- deleted 7y ago[deleted]
- rahimnathwani 7y agoPerhaps they intend UBI to be a substitute for existing benefits, rather than an add-on?
- mehrdadn 7y agoBut they get affected by the taxes? So they'd be worse off than they are now?
- rahimnathwani 7y agoThe Medicaid income threshold is something like $1300/month. If you're earning that much, then the amount going on non-medical, non-food, non-rent stuff is probably under $500/month. Assuming you're currently paying sales tax on those purchases at ~7%, and this proposal increases that to 10%, you're paying an extra $15/month in tax. (This was a quick calculation based on info from the internet, so I could be mistaken.) BUT if you can buy medical insurance for less than $1000/month, then can you give up the Medicaid benefit and have the $1000 instead? If so, as long as medical insurance doesn't cost more than $985/month, you're better off with the higher tax and the $1000, than with the Medicaid benefit.
- nodesocket 7y agoI don't understand the logic of instead just providing a $12,000 California tax deduction or lowering CA sales tax. Moot to me, I left CA for Tennessee two years ago. I prefer to just save way more money by not paying any state income taxes.
- refurb 7y agoI would assume it because the people who need it the most don’t pay any state income tax or spend enough on sales taxes. You could do it through a tax credit however.
- occamrazor 7y agoThe tax credit however is paid out once a year. Regular monthly payment mayhelp budgeting and disincentivize impulsive large expenses.
- yellow_lead 7y agoThat's interesting. I would consider moving to California to do nothing if it passed.
- sixothree 7y agoSo... $12k is a pay raise for you?
- deleted 7y ago[deleted]
- throwaway2048 7y agoGood luck living on $1000 a month anywhere in California
- onlyrealcuzzo 7y agoI think you could maybe do it if you lived in a garbage can in Joshua Tree and ate a lot of beans.
- yellow_lead 7y agoI was thinking of a dorm or hostel. My food and rent could potentially be covered, leaving me to work on personal research or a business from cafes.
- sixothree 7y agoThat sounds very different than "doing nothing".
- yellow_lead 7y agoApologies, I was thinking froma GDP perspective.
- 7y ago
- 013a 7y agoUBI is often combined with the idea that increases in automation hurt job growth, especially low income ones. But, of course, this bill isn't funded through tax increases on businesses or the wealthy. Its funded through a tax increase on non-essential goods and services. Insane.
- Retric 7y agoThese can be functionally equivalent as profits are eventually spent by somebody. The real question is not what general tax system you use, but rather what you exempt from the taxes. That and how much profit from other areas ends up in California vs profit from California ending up in other areas etc.
- klipt 7y agoIn the Bay Area, this would probably just increase rents by $1000/month because the housing market is very inelastic.
- tehlike 7y agogreat time to introduce state-wide rent control.
- stass 7y agoWhich will make housing even more scarce.
- ajmurmann 7y agoOr finally build some housing where it's most in demand.
- katmannthree 7y agoModest housing at that, not the "luxury" apartments that are springing up everywhere.
- yenwodyah 7y agoAny new housing is good, even if it's luxury; when people move into luxury apartments, it relieves demand on wherever they were living before, lowering prices.
- erik_seaberg 7y agoThis. If we refuse to build luxury housing, people who could afford it will just outbid everyone on whatever we do build, because they need to live somewhere. And it may look like they're springing up everywhere but we're barely treading water, the absolute numbers still aren't keeping up with influx.
- BurningFrog 7y ago
- irjustin 7y agoI'm all for UBI. I definitely think there are bigger things to tackle like healthcare, but there's absolutely nothing wrong with trying to push this front as well. FWIW, I had an interesting discussion where UBI is not a socialist construct but actually more born out of capitalism to keep the masses happy.
- akvadrako 7y agoUBI isn’t socialist at all - it’s very market oriented and reduces the power of government. This is why many of the earliest supporters we’re libertarians like Friedman and Murray. Though they usually called it negative income tax, the output curves can be made the same.
- redis_mlc 7y agoI read the article. The problem with any US government plan is the lack of sound policies. After you start with policy goals, then you can look at UBI, high-density housing, service industry staffing in the Bay Area, infrastructure maintenance, etc. together. Having said that, the most visible problems with UBI that should be addressed (in policy. see above.) are: 1) Would it further inflate rental prices? 2) Is voting for free money the fatal flaw in democracy that this unattributed quote says, "When the people find that they can vote themselves money, that will herald the end of the republic." Modern Greece is an economic cripple from public sector benefits for example, as are all US cities. What happens when you expand that to the population at large? 3) In this proposal, what would be the effect on the industries taxed? Would people shop out of state? Would they avoid online merchants? etc. The political issue is that any party that promotes UBI will be accused of pandering to their base by the other party. And it's an effective argument in the absence of, again, policy. I would go so far as to say this. The most patriotic thing that Bay Area residents could do is to finance Yang or Sanders to create a PAC to design and promote logical government fiscal policy for 10-20 years, then become the third political party for elections.
- bogidon 7y agoOn point 2) my unchecked intuition says this: US cities are forced to provide services more than non-urban communities* because their needy are more visible. Because they provide services, they attract more people needing them. My guess is that $1000/month (which as you say is like the state providing services to everyone living in it regardless of where they live), would increase the mobility of low-income recipients, allowing them to spend their money on cheaper housing away from expensive urban centers. In other words, it might alleviate some of the pressure on cities. *rural homelessness exists in the US too, I don't think it's as prevalent though
- um_ya 7y agoWouldn't it be great if California implemented some laws contingent on the funds coming from current waste and abuse? For instance, "UBI must be funded by reducing current waste and abuse in California". If Democrats wanted to implement UBI, they would have to work for it, by solving real spending problems, rather than draining the taxpayer further.
- justlexi93 7y agoSo the Bill benefits anyone spending less then 10k/month on the non exempted things... I make about this much and feel this type of tax may actually help me spend better. If they added additional exemptions for local and US goods this could be really neat.
- jmpman 7y agoI’ve always thought that this is going to hit illegal immigrants hardest. Rents on the low end are going to rise by $1000/month, and those without the subsidy aren’t going to be able to compete. Or California could provide $1000/month to illegal immigrants, but I doubt that would pass even in California.
- ethanbond 7y agoGreat that landlords will ultimately get this as a windfall and normal people will see no improvement in lifestyle eh?
- adolph 7y agoWell, the bill just says resident so maybe Oregonians can take a cash vacation. http://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200AB2712&showamends=false http://leginfo.legislature.ca.gov/faces/billCompareClient.xh...
- DougN7 7y agoIt’s like nobody understands supply and demand
- daenz 7y agoEveryday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over. It's easier to think about that way.
- speedplane 7y ago> Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over. Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service. Prices only approach the cost of production when there is strong competition among industry players. Basic tactics like branding, consolidation, and lack of transparency in an industry help subvert competition.
- sergiotapia 7y agoUnder this proposed bill how are they going to prevent illegals from claiming this benefit? I didn't see it mentioned in the article.
- SlowRobotAhead 7y agoIDK. One side says “it doesn’t because you need to pay for them and that’s that” and the other side says “a wall”. So... imma sit this one out.
- daenz 7y agoWhy do you think should they prevent illegals from benefiting?
- sergiotapia 7y agoWhy do you think illegals should benefit from a foreign government? If I suddenly moved to Estonia, should I be entitled to benefits from that government? I don't think I should.
- daenz 7y ago>Why do you think illegals should benefit from a foreign government? I don't think that, I am undecided.
- lidHanteyk 7y agoWhy do you think that people who are not citizens of their resident state are automatically "illegal"? The European Union has made great strides with their experiments in allowing laborers to freely flow across borders, and we now know that it is a boon to economies when labor is allowed to migrate freely. I mean, guessing that you're living in the USA, you right now are benefiting massively from a system of migrant labor [0] involving the flow of people across the USA-Mexico borders. (And also the USA-Canada border, although somehow I imagine that that bothers you less.) It seems short-sighted to consider laborers as unfit for the job market just because they have a different country of origin, and it is almost common sense that one should pay taxes where one makes their income and pays their rent and groceries; it is at least economic sense and part of how most countries design their tax systems. [0] https://en.wikipedia.org/wiki/Migrant_worker#United_States https://en.wikipedia.org/wiki/Migrant_worker#United_States
- dpc_pw 7y ago"The program would be paid for with a state value-added tax of 10 percent on goods and services, with exemptions for (...)" VAT is such a PITA (I'm originally European, so I know a thing or two about it). Tons of additional paperwork, plenty of room for fraud and cheating (like https://en.wikipedia.org/wiki/Missing_trader_fraud https://en.wikipedia.org/wiki/Missing_trader_fraud ). Just be honest about it, increase existing property taxes, which people already pay anyway and are naturally progressive and avoid creating complications. Also, I would start with lower amounts, and see what actually happens. And ... Why wouldn't every capable homeless person from all over US move to California if they would be paid to do it (and I can't imagine more forgiving weather for homelessness, anyway)?
- daveyb 7y agoAgreed, but sadly, I would expect a meaningful property tax increase to met with impenetrable resistance in CA. Property owners have a very large influence in the state.
- dpc_pw 7y agoI realize that, but it's still stupid. It's a tax. We'll pay it one way or another. I am planing to buy a house in CA, and it doesn't really matter to me that much if it's taken from me at the register, in the property tax or from my salary. So if you have take our money, just don't waste our time with VAT paperwork. The coming decade is truly going to be a shitshow. Redistribution pressions will grow as wealth inequality increases, and pension crisis is getting closer and closer.
- pmoriarty 7y agoThere are people who own property in California but don't live in California (and not even in the US sometimes). They wouldn't pay California VAT because they need not buy anything there. The people most affected by a California VAT would be California residents who can't afford to shop elsewhere... ie. the poor. Fortunately some necessities like food seem to be excluded from the VAT (at least in this iteration of the bill), but I'm still concerned that the poor will be unduly burdened by it, and not even get to benefit because they're probably already on Medi-Cal (California's Medicaid program) so they won't be eligible for the UBI unless they give up Medi-Cal.
- Rebelgecko 7y agoInteresting that they'd pay for it via something regressive like sales tax (maybe a bit less regressive because it doesn't include groceries, but still)
- refurb 7y agoIf you make food, housing, education and healthcare tax exempt, it’s not regressive at all.
- fountainofage 7y agoTaxing anything at a flat rate without regard for a person's ability to pay is going to pretty much wind up as a regressive tax. Not saying this is good or bad, just that it is what it is.
- JauntTrooper 7y ago30 million adults in California x $1,000 x 12 months = $360 billion / year. 20% of adults are on Medicaid though, so if they're excluded it's $288 billion / year. California's total current budget is around $210 billion. So taxes would more than double. On average each adult's taxes would go up by the amount of the UBI. The specifics of who would bear more of a tax burden would depend on how it's taxed. Under this plan, taxing consumption and excluding Medicaid recipients would mean the tax burden would fall disproportionately on low income households.
- speedplane 7y ago> 30 million adults in California x $1,000 x 12 months = $360 billion / year. 20% of adults are on Medicaid though, so if they're excluded it's $288 billion / year. This is the real fear that progressives have about UBI... that it's a replacement for government services. Converting government healthcare into an equivalent check will effectively take away healthcare from millions of people.
- thedance 7y agoAh yes, Yang gathered "a surprising amount of support" and I guess nobody was as surprised as Yang, who came in eighth place in New Hampshire behind Tulsi Gabbard with a number of votes indistinguishable from none after getting 1% of votes in Iowa. As we can see Yang's UBI platform is sweeping across the American imagination.
- akvadrako 7y agoYang got 5% in Iowa. 1% is for the second count when you are supposed to focus to the top vote getters.
- dragonwriter 7y agoIt excludes recipients in programs that cover well over a quarter of the state’s population, so, no, not “nearly every Californian”.
- blackrock 7y agoHow about an alternative idea. The cost of housing is insane. Prop 13 protects those that were able to buy a home when prices were cheaper, but it screws over the future generations. Is this fair? How about the state pays the remainder of housing costs, after a basic commitment amount is met? Say, a person buys a house. He should be responsible for the first 20 years of payments, which is based on a percentage of his net earnings, like 35% to 40%. If he stays there for 20 years, and completes the mortgage program, then the house is his. The government will pay the difference, and close out the loan. He will need to continue to pay the property tax to live there, but that’s now like a cheap rent. The unit must be his primary residence. He cannot rent it out for 20 years. He can transfer it to an immediate offspring or spouse, like a child or wife, upon his death. I chose 20 years, because this is a long enough time to make a commitment to a location, without being forced to work for 30 years to pay off the loan. And a 35-40% of net, so that he isn’t house poor. So he can start the program when he is 25 years old, and by the time he is 45 years old, then the house/apartment/condo is his. This now would tie the price of housing to the price of median pay, instead of some arbitrary market rate. The short sighted thing that politicians fail to see with the housing crisis, is that it destroys the future fabric of American society. People get priced out of housing markets, and cannot raise a family, because everything is just too expensive. We need a different way to look at things. The current method is flawed, and has outlived its usefulness.
- refurb 7y agoStarting at 25? What if they start a family and need a bigger place? What if they get a different job and need to move?
- purplezooey 7y agoHonestly can we just build some housing. Vote out your state senator if he/she voted against SB 50. That's the way more urgent issue.
- alpineidyll3 7y agoGradschool stipend for all? ;P The knock on effects of this type of policy are basically impossible to predict when instituted in something giant and diverse like CA imo. I don't think the experiment would cost much though or endanger much. It's too bad laws can't be introduced on an experimental basis with measurement policies.
- RickJWagner 7y agoIncreasing sales tax 10% in a state with super-high cost of living does not seem like the right move.
- mike50 7y agoOriginal source required.