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60% is absurd. That’s effectively a 60% income tax on the bottom bracket and will certainly decentivize work. I’ve only seen such a number suggested by South A
by akvadrako 7y ago
60% is absurd. That’s effectively a 60% income tax on the bottom bracket and will certainly decentivize work.
I’ve only seen such a number suggested by South African UBI proponents.
- zozbot234 7y agoIt will disincentivize work to some extent, among a comparative minority of UBI recipients. But the flip side is that by keeping the break-even point at a reasonable level and not pushing it too high, you actively slash costs for the program as a whole. The effect of having moderately-high clawbacks at the low end ripples upward, saving a comparable disincentive for every income above the breakeven point. This is a key insight about non-linear income taxation which is borne out by computer modeling of the "optimal" (utility-maximizing) tax rate structure, and economists who are knowledgeable about the subject do agree on this. It's not really controversial.