4 ms·

Why would the tax be regressive?

eanzenberg 6y ago
Also, how can it be funded by vat anyways? We’re talking about trillions per year to fund. Are you taxing cars 1000%? It doesn’t add up.
- snovv_crash 6y ago
  I think you're overestimating how much would be paid out. Taxes can go up on the employed by roughly what they receive in UBI, unemployed get UBI instead of unemployment benefits. It all balances out.
  - eanzenberg 6y ago
    This is not a VAT anymore. Why do UBI specialists sidestepped how this gets funded? What is there to hide?
    - jacobr1 6y ago
      I don't think there is a widespread agreement amongst proponents on how things are to be funded. Some want it to be revenue natural, others a wealth tax, others VAT, others via printing money, others a mix. I'm not sure UBI is the right way to go. But if we are to do it, my own current thinking that you start by trying to keep it neutral in the tax code (so most families get increased taxes that claw back the majority of the UBI value) But then we need need to account for additional funds needed beyond that: - Those currently earning less than would be clawed back (net-recipients of UBI) - Those who we would expect to become net-recipients, that would also cut back on their current earnings. The latter group, I'd expect to be smaller than some suspect, but still big enough that it needs to taken into account. So how much extra are we talking about? Back of the envelope math starting from: https://dqydj.com/average-median-top-household-income-percentiles/ https://dqydj.com/average-median-top-household-income-percen... 127,679,100 households in the US, in 2018 If we take the approach that this acts as an income floor (the clawbacks per above), and we set that floor at $40k. We can see that 33% make less than that from the data. For laziness sake, I'll assume a linear transition from 0% to 33%. That would imply $20k/year at 16%, which is roughly what the data shows. So we can assume an average of 20k UBI for 33% of households as the net benefit. 127,679,100 * $20000 * 0.33 = $843B Then we need to take into account those that stop earning. So let's round it up to a trillion. Note household income already take into account existing transfers like social security and unemployment benefits so we can't subtract those out as savings. The US is wealthy enough to raise taxes by a trillion/year. It is something like 5% GDP. But that is a massive increase. It doesn't come for free with "neutral" taxation. On the other hand, we could have a lower floor, but then I don't think we actually get the benefits.
bostonvaulter2 6y ago
Because the combination of UBI + VAT will be progressive for the majority of US citizens.

Also, how can it be funded by vat anyways? We’re talking about trillions per year to fund. Are you taxing cars 1000%? It doesn’t add up.

snovv_crash 6y ago
I think you're overestimating how much would be paid out. Taxes can go up on the employed by roughly what they receive in UBI, unemployed get UBI instead of unemployment benefits. It all balances out.
- eanzenberg 6y ago
  This is not a VAT anymore. Why do UBI specialists sidestepped how this gets funded? What is there to hide?
  - jacobr1 6y ago
    I don't think there is a widespread agreement amongst proponents on how things are to be funded. Some want it to be revenue natural, others a wealth tax, others VAT, others via printing money, others a mix. I'm not sure UBI is the right way to go. But if we are to do it, my own current thinking that you start by trying to keep it neutral in the tax code (so most families get increased taxes that claw back the majority of the UBI value) But then we need need to account for additional funds needed beyond that: - Those currently earning less than would be clawed back (net-recipients of UBI) - Those who we would expect to become net-recipients, that would also cut back on their current earnings. The latter group, I'd expect to be smaller than some suspect, but still big enough that it needs to taken into account. So how much extra are we talking about? Back of the envelope math starting from: https://dqydj.com/average-median-top-household-income-percentiles/ https://dqydj.com/average-median-top-household-income-percen... 127,679,100 households in the US, in 2018 If we take the approach that this acts as an income floor (the clawbacks per above), and we set that floor at $40k. We can see that 33% make less than that from the data. For laziness sake, I'll assume a linear transition from 0% to 33%. That would imply $20k/year at 16%, which is roughly what the data shows. So we can assume an average of 20k UBI for 33% of households as the net benefit. 127,679,100 * $20000 * 0.33 = $843B Then we need to take into account those that stop earning. So let's round it up to a trillion. Note household income already take into account existing transfers like social security and unemployment benefits so we can't subtract those out as savings. The US is wealthy enough to raise taxes by a trillion/year. It is something like 5% GDP. But that is a massive increase. It doesn't come for free with "neutral" taxation. On the other hand, we could have a lower floor, but then I don't think we actually get the benefits.

bostonvaulter2 6y ago

Because the combination of UBI + VAT will be progressive for the majority of US citizens.