4 ms·

> The answer is that it's much simpler to send everyone a check. Seems even easier to increase the standard tax deduction we already have and are familiar with

> The answer is that it's much simpler to send everyone a check. Seems even easier to increase the standard tax deduction we already have and are familiar with. Then you can increase tax rates to make sure those evil rich people don't see any benefit.

AnthonyMouse 6y ago
The standard deduction doesn't allow for negative rates, which means it can't be used to replace means-tested assistance programs in the same way as a UBI. The EITC does, but it has a cutoff with the aforementioned problems, and if it didn't (and the amount was high enough to replace the other programs) it would be hard to distinguish from a UBI, outside of the easily-gamed income requirement which does little more in practice than discriminate against honest homemakers who don't get to claim it.
- dahfizz 6y ago
  You're right, I meant tax credit and not deduction. My point is that a negative tax rate would be straightforward to implement and would be the path of least resistance to a UBI.
  - AnthonyMouse 6y ago
    Yes, having a large unconditional "standard tax credit" with no phase out would just be another name for a UBI. Realistically what you have to do at that point is to use a flatter rate structure instead of a phase-out so that the credit is paid back by the time you get to higher income levels, but that's much better than the existing nonsense where the marginal rate structure goes all over the place from sometimes >90% at low income levels (from phase outs) to ~20% in the middle and then back up to 30+%. You get a strongly progressive effective rate just from the credit, so at that point you can use something like a 35% fixed marginal rate and simplify everything else too. Interestingly this also means it doesn't even have to be an individual income tax. You could use VAT or charge payroll tax to employers and get the same result without individuals even having to file tax returns anymore.
  - dodobirdlord 6y ago
    Sure, NIT + control of income tax rates is isomorphic to UBI + control of income tax rates in terms of how much money people get in a year. The core downside of piggybacking on the existing tax refund system is that individuals would get their NIT refund once per year, and spiky distribution has problems. One of the core benefits of NIT/UBI is that many inefficient means-tested welfare programs could be ended without people starving, going homeless, using the ER as healthcare, etc. But if the distributions are a year apart plenty of people are going to exhaust their money and require those welfare programs to continue, now all the more inefficient because the relevant population in smaller. NIT has to be tabulated based on income, but UBI can be monthly/weekly/daily/whatever frequency.
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jpindar 6y ago
You can't buy food with a piece of paper that says you're supposed to get a tax deduction next year.
- sdinsn 6y ago
  But you can buy food with the extra money from your tax deduction last year. Meaning, your problem is only a one-time, short-term problem. You aren't arguing in good faith if you try to use that to discredit his proposed solution.

AnthonyMouse 6y ago

The standard deduction doesn't allow for negative rates, which means it can't be used to replace means-tested assistance programs in the same way as a UBI. The EITC does, but it has a cutoff with the aforementioned problems, and if it didn't (and the amount was high enough to replace the other programs) it would be hard to distinguish from a UBI, outside of the easily-gamed income requirement which does little more in practice than discriminate against honest homemakers who don't get to claim it.

dahfizz 6y ago
You're right, I meant tax credit and not deduction. My point is that a negative tax rate would be straightforward to implement and would be the path of least resistance to a UBI.
- AnthonyMouse 6y ago
  Yes, having a large unconditional "standard tax credit" with no phase out would just be another name for a UBI. Realistically what you have to do at that point is to use a flatter rate structure instead of a phase-out so that the credit is paid back by the time you get to higher income levels, but that's much better than the existing nonsense where the marginal rate structure goes all over the place from sometimes >90% at low income levels (from phase outs) to ~20% in the middle and then back up to 30+%. You get a strongly progressive effective rate just from the credit, so at that point you can use something like a 35% fixed marginal rate and simplify everything else too. Interestingly this also means it doesn't even have to be an individual income tax. You could use VAT or charge payroll tax to employers and get the same result without individuals even having to file tax returns anymore.
- dodobirdlord 6y ago
  Sure, NIT + control of income tax rates is isomorphic to UBI + control of income tax rates in terms of how much money people get in a year. The core downside of piggybacking on the existing tax refund system is that individuals would get their NIT refund once per year, and spiky distribution has problems. One of the core benefits of NIT/UBI is that many inefficient means-tested welfare programs could be ended without people starving, going homeless, using the ER as healthcare, etc. But if the distributions are a year apart plenty of people are going to exhaust their money and require those welfare programs to continue, now all the more inefficient because the relevant population in smaller. NIT has to be tabulated based on income, but UBI can be monthly/weekly/daily/whatever frequency.

deleted 6y ago

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jpindar 6y ago

You can't buy food with a piece of paper that says you're supposed to get a tax deduction next year.

sdinsn 6y ago
But you can buy food with the extra money from your tax deduction last year. Meaning, your problem is only a one-time, short-term problem. You aren't arguing in good faith if you try to use that to discredit his proposed solution.