5 ms·

Claims like this about UBI are simply unknown. You can't say it with any certainty, not even close. To begin to have UBI you'd have to increase taxes substantia

Claims like this about UBI are simply unknown. You can't say it with any certainty, not even close. To begin to have UBI you'd have to increase taxes substantially, and you'd have to prove that doing that would actually lead to better results for businesses and the people.

zozbot234 5y ago
> To begin to have UBI you'd have to increase taxes substantially These would be far less of a burden than the implied taxes arising due to existing means-tested welfare. The incentive distorting effect from that sort of means-testing is extremely high, and the whole point of the UBI/NIT is to dispense with that.
- deleted 5y ago
  [deleted]
Ericson2314 5y ago
You don't have to pay for UBI. You can just print more money. There are many things in between. Getting rid of reserve requirements and zero interest rates loans vs UBI can be viewed as points in a larger continuous space. We know there are aggregate demand issues, and we now know that simply issuing more credit "the normal way" seems to cause asset bubbles before boosting demand for labor, so we should be open to trying other things even if we don't know exactly what will happen. Or read Kaleki in 1943 https://delong.typepad.com/kalecki43.pdf https://delong.typepad.com/kalecki43.pdf, who predicted all of this (UBI resistance, direct gov investment resistance, The keynesian collapse in the 1970s, trying to boost employment by boosting private investment alone not working....). Incredible and saddening.
- imtringued 5y ago
  "It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire; and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders." That is is just plain corruption. Leaders (whether in governments or businesses) would rather have power for themselves than well-being for the country. Honestly, I had a hunch that developed nations didn't have less corruption, rather, the impact of corruption has been softened. Each individual industry leader might be corrupt but given enough competing industries their power diminishes. This is why government corruption is primarily associated with oil countries (or other resources) because controlling that single industry is the same as controlling the entire country. You can clearly see it in Germany as well. Merkel and her party have close connections with specific industries commonly associated with Germany, the most prominent examples are car manufacturing because it is an export industry and the coal industry because Germany is resource poor (coal is all we have). If you work at VW CDU is the party you vote for...
  - Ericson2314 5y ago
    It's selfish, but the funny thing is it probably isn't corruption by western definitions! If you own a business and extract as much profits as possible --- not corruption. If you own a business and install your kid as middle manager to extract more money to your family -- corruption! There's a quip that corruption is a term to penalize regions with larger extended families and kinship groups --- because the most galling corruption to the west is helping that 3rd cousin or clan member or whatever. But that is a real cop-out when in the west few know their 3rd cousin or are in a clan --- easy avoid nepotism when you don't know of the person!
AnthonyMouse 5y ago
The taxes thing confuses people mostly because they don't understand how existing phase outs work. Right now the government pays benefits that are already close to what a UBI would pay, but in food/education/housing/other assistance. Then those benefits aggressively phase out. The phase outs are crazy. First, they invert what you want from a progressive tax system, because lower income people are paying the highest marginal rates. You might be paying a "10% tax rate" but if you're also losing $0.50 of every dollar to benefits phase outs, your marginal rate in practice is 60%. Worse, because the benefits phase outs are individual to every program, they overlap randomly to nonsensical effect. Someone making $20,000 might have a marginal rate of 80%, at $24,000 it's 110%, at $28,000 it's down to 40% but at $30,000 its back up to 60%. This is obviously very stupid and creates bad incentives. Now suppose we align all the phase outs so that a) the phase out rate is uniform across all programs and b) we don't have lower income people paying higher marginal rates than higher income people. Then you might have something this. Everyone pays a 10% tax rate from $0 to $60,000 and a 30% tax rate after, and benefits phase out at a rate of 20% from $0 to $60,000 and are fully phased out by $60,000. Well, it turns out this is mathematically equivalent to paying the benefits to everyone unconditionally and having a flat 30% tax rate starting from $0. And if you convert all the benefits to cash instead of food vouchers and such then you have a UBI. On paper eliminating the phase outs costs a ton of money -- everyone making $60,000 would have to pay $12,000 more in taxes! But then they all receive a $12,000 UBI and it just cancels out. The primary transfer effect is really in not having such aggressive phase outs, i.e. not putting such high marginal rates on lower income people. The effect is that they have more money, and higher income people have to pay higher taxes to pay for it. But not by the full amount of the UBI, only by the difference between the status quo of aggressive phase outs and the less aggressive ones that make the marginal rate curve not so silly. You end up with a modest transfer from higher income people to lower income people, vs. the status quo. And then, because lower income people are more likely to spend what they receive than higher income people, you get more consumer demand, which is good for businesses. You also have a greater incentive to work for lower income people, because they get to keep 70% of what they earn instead of 40% (or -10%).
- fuzzfactor 5y ago
  >they overlap randomly to nonsensical effect. Lots of the nonsensical stuff is not exactly random. Still the finances could be balanced like this and you could end up with an equal number of recipients receiving the same average benefit. Perhaps some efficiency through consolidation. There is serious consensus that this amount has not been enough for a while which is one of the things that sparks the discussion about UBI more often. Walmart & McDonalds might presently be employing the most noticable share of present recipients, but that is far from universal. Yet. Just like with health care, to get anywhere near universal you're going to have to tax something having deeper pockets than mere income no matter how many of the top wage-earners get high brackets and have loopholes closed. You're going to have to tax commerce. If that could be done plus phase out the income levies, that would be the best thing for a consumer economy in over 100 years.

zozbot234 5y ago

> To begin to have UBI you'd have to increase taxes substantially These would be far less of a burden than the implied taxes arising due to existing means-tested welfare. The incentive distorting effect from that sort of means-testing is extremely high, and the whole point of the UBI/NIT is to dispense with that.

deleted 5y ago
[deleted]

Ericson2314 5y ago

You don't have to pay for UBI. You can just print more money. There are many things in between. Getting rid of reserve requirements and zero interest rates loans vs UBI can be viewed as points in a larger continuous space. We know there are aggregate demand issues, and we now know that simply issuing more credit "the normal way" seems to cause asset bubbles before boosting demand for labor, so we should be open to trying other things even if we don't know exactly what will happen. Or read Kaleki in 1943 https://delong.typepad.com/kalecki43.pdf https://delong.typepad.com/kalecki43.pdf, who predicted all of this (UBI resistance, direct gov investment resistance, The keynesian collapse in the 1970s, trying to boost employment by boosting private investment alone not working....). Incredible and saddening.

imtringued 5y ago
"It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire; and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders." That is is just plain corruption. Leaders (whether in governments or businesses) would rather have power for themselves than well-being for the country. Honestly, I had a hunch that developed nations didn't have less corruption, rather, the impact of corruption has been softened. Each individual industry leader might be corrupt but given enough competing industries their power diminishes. This is why government corruption is primarily associated with oil countries (or other resources) because controlling that single industry is the same as controlling the entire country. You can clearly see it in Germany as well. Merkel and her party have close connections with specific industries commonly associated with Germany, the most prominent examples are car manufacturing because it is an export industry and the coal industry because Germany is resource poor (coal is all we have). If you work at VW CDU is the party you vote for...
- Ericson2314 5y ago
  It's selfish, but the funny thing is it probably isn't corruption by western definitions! If you own a business and extract as much profits as possible --- not corruption. If you own a business and install your kid as middle manager to extract more money to your family -- corruption! There's a quip that corruption is a term to penalize regions with larger extended families and kinship groups --- because the most galling corruption to the west is helping that 3rd cousin or clan member or whatever. But that is a real cop-out when in the west few know their 3rd cousin or are in a clan --- easy avoid nepotism when you don't know of the person!

AnthonyMouse 5y ago

The taxes thing confuses people mostly because they don't understand how existing phase outs work. Right now the government pays benefits that are already close to what a UBI would pay, but in food/education/housing/other assistance. Then those benefits aggressively phase out. The phase outs are crazy. First, they invert what you want from a progressive tax system, because lower income people are paying the highest marginal rates. You might be paying a "10% tax rate" but if you're also losing $0.50 of every dollar to benefits phase outs, your marginal rate in practice is 60%. Worse, because the benefits phase outs are individual to every program, they overlap randomly to nonsensical effect. Someone making $20,000 might have a marginal rate of 80%, at $24,000 it's 110%, at $28,000 it's down to 40% but at $30,000 its back up to 60%. This is obviously very stupid and creates bad incentives. Now suppose we align all the phase outs so that a) the phase out rate is uniform across all programs and b) we don't have lower income people paying higher marginal rates than higher income people. Then you might have something this. Everyone pays a 10% tax rate from $0 to $60,000 and a 30% tax rate after, and benefits phase out at a rate of 20% from $0 to $60,000 and are fully phased out by $60,000. Well, it turns out this is mathematically equivalent to paying the benefits to everyone unconditionally and having a flat 30% tax rate starting from $0. And if you convert all the benefits to cash instead of food vouchers and such then you have a UBI. On paper eliminating the phase outs costs a ton of money -- everyone making $60,000 would have to pay $12,000 more in taxes! But then they all receive a $12,000 UBI and it just cancels out. The primary transfer effect is really in not having such aggressive phase outs, i.e. not putting such high marginal rates on lower income people. The effect is that they have more money, and higher income people have to pay higher taxes to pay for it. But not by the full amount of the UBI, only by the difference between the status quo of aggressive phase outs and the less aggressive ones that make the marginal rate curve not so silly. You end up with a modest transfer from higher income people to lower income people, vs. the status quo. And then, because lower income people are more likely to spend what they receive than higher income people, you get more consumer demand, which is good for businesses. You also have a greater incentive to work for lower income people, because they get to keep 70% of what they earn instead of 40% (or -10%).

fuzzfactor 5y ago
>they overlap randomly to nonsensical effect. Lots of the nonsensical stuff is not exactly random. Still the finances could be balanced like this and you could end up with an equal number of recipients receiving the same average benefit. Perhaps some efficiency through consolidation. There is serious consensus that this amount has not been enough for a while which is one of the things that sparks the discussion about UBI more often. Walmart & McDonalds might presently be employing the most noticable share of present recipients, but that is far from universal. Yet. Just like with health care, to get anywhere near universal you're going to have to tax something having deeper pockets than mere income no matter how many of the top wage-earners get high brackets and have loopholes closed. You're going to have to tax commerce. If that could be done plus phase out the income levies, that would be the best thing for a consumer economy in over 100 years.