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This is not necessarily true because it's forgetting the potential countervailing impact of progressive taxation. With basic arithmetic we can show that UBI+mo
by hntrader 6y ago
This is not necessarily true because it's forgetting the potential countervailing impact of progressive taxation.
With basic arithmetic we can show that UBI+more progressive taxation can create the identical first-order outcome as traditional welfare+less progressive taxation. The function marginal_tax_rate(income) can be optimized to make the outcomes the same.
[EDIT - What I'm describing here is just the negative income tax, as another poster mentioned]
- Traster 6y agoYes, what you're doing is creating the exact same benefits system but calling it "negative taxation" in order to have the same ability to target you by definition recreate the same complexity.
- hntrader 6y agoIt's not the same system, they're quite different. It is non-prescriptive, so it has less potential for bureaucratic waste than a means-tested system that is prescriptive about where the funds go, or worse yet explicitly spends the funds on specific publicly run programs that may or may not be efficiently ran and may or may not be what poor people need. Also, the marginal tax rate gradient under negative tax is gradual instead of a cliff (which is usually the case in means tested systems) which helps to avoid the disincentive problem.