5 ms·

The hard part is that UBI is extremely, extremely expensive. The variant I'm in favour of goes something like: 1. $12k / year to everyone 2. 50% flat tax (on

The hard part is that UBI is extremely, extremely expensive. The variant I'm in favour of goes something like: 1. $12k / year to everyone 2. 50% flat tax (on non-UBI income) 3. Small federal land value tax on non-wilderness properties 4. Tax on non-resident property owners 5. UBI for citizens only (to mitigate people traveling here just to not work) But try passing that ^ in any major democracy. You can't. The reason is that the winners of the current system (most seniors, top half of wage earners, the international elite) are the ones that either vote, or set political agendas. They like being able to hire [personal helpers, maids, warehouse workers] for $12 an hour. For a true UBI we need to raise taxes and prices a lot and that will have downsides (at least in the short term) for probably 50 to 60% of the population. We will lose workers. Real output will fall. Taxes will have to go up and we will lose some people to other job markets. So instead people nibble around the policy edges.

Retric 5y ago
Implementing social security in the first place took massive social upheaval. UBI as a thought experiment is never going to happen, it would take a massive political movement or economic apocalypse.
- VWWHFSfQ 5y ago
  I think it's pretty likely that some country will actually try it. Most likely one of the oil-rich welfare states in the nordics. I doubt it lasts very long though especially after they start seeing an explosion of immigration. From my experience, the citizens of those north European countries don't like people that don't look like them.
  - pc86 5y ago
    As a general rule, people in aggregate don't like people that don't look like them. It's certainly not specific to northern Europe.
  - merpnderp 5y ago
    If they see an explosion of immigration, it’s because of the illegal immigrant labor market created by the massive spike in wages and massive decline in available labor. The governments can’t keep people out but also can’t make the new people citizens else it would instantly bankrupt UBI. This seems like the Achilles heel of UBI.
    - Retric 5y ago
      There are two option either immigrants are allowed to integrate with society at which point UBI should be close to cost neutral, or they aren’t allowed to integrate with society at which point immigrants don’t qualify for UBI.
      - nybble41 5y ago
        I don't see anything about being "allowed to integrate with society" which would make it "cost neutral" for someone to immigrate to a country and begin drawing a UBI without any obligation to work for it. (Of course if one does have to work for it then it's not UBI; that's just a regular job.)
        Retric 5y ago
        It’s not a question of what a single immigrant does, but what all immigrants do as a group. It might be that immigrants on net cost more in UBI than they contributed to the UBI program but such imbalance could just as easily go the other direction. In the end working must provide incentives for natives to work for any UBI system to exist and those same incentives would apply to immigrants.
        nybble41 5y ago
        > working must provide incentives for natives to work for any UBI system to exist Well, yes, and that's kind of an unsolved problem. The immigration issue doesn't help. > It’s not a question of what a single immigrant does, but what all immigrants do as a group. Agreed, but what kind of immigrants will a country with a UBI (available to immigrants) tend to attract, ones that want to work or ones that want to collect the UBI? The former group would be better served immigrating somewhere else with lower taxes and no UBI. Like-minded "natives" would most likely do the same, to some extent, though leaving one's birth country is not something undertaken lightly.
- imtringued 5y ago
  A land value tax would be more useful if someone wants to play social upheaval poker. The Danes have an incredibly long history of land value taxation where every time special interests abolished it, things go to shit very quickly and they recovered very quickly once the tax was reinstated.
deleted 5y ago
[deleted]
pydry 5y ago
Passing a flat tax in a major democracy is difficult because it's a tax designed to be heavily regressive whilst sounding vaguely fair if you dont pay too much attention. It's equally hard if not harder to pass a well run progressive tax (e.g. a land value tax). Instead we get a hodgepodge of progressive and regressive combined to reflect the power struggle between oligarchy and democracy that makes up most western power centers. Also we get mollified with political pipe dreams designed to be easy to murder in their sleep (e.g. UBI) to take the heat off more "dangerous to profit" policies like minimum wage hikes.
DocTomoe 5y ago
If you raise taxes and prices a lot, UBI will become basically useless, because it's effects will be eaten up by inflation. Hell, why wouldn't I increase rent to the UBI amount?
- bryanlarsen 5y ago
  If UBI doesn't increase the money supply (aka it is paid for with taxing), it shouldn't increase inflation.
  - pc86 5y ago
    Strictly speaking this isn't the case. If you define inflation with a set CPI basket, and your redistribution moves money to people whose purchasing is more correlated with that basket than the people you're taking the money from, inflation will increase.
  - collegeburner 5y ago
    Wrong, money velocity and demand (both probably go up under this scheme) can increase inflation. So can shortages caused by a big demand spike.
    - bryanlarsen 5y ago
      Demand for food and housing doesn't go up with UBI, there are still the same number of people.
      - collegeburner 5y ago
        More desirable food (organic, grass fed, whatever) and more desirable housing will both have increased demand, especially short term. Also even if we hold food and housing constant, more money frees up what people formerly spent on food and housing to spend on other stuff so demand increases there. America has very high marginal propensity to consume so most of this will be spent. An additional tax that redistributes primarily will also be spent much more because poor and middle class have higher MPC than rich.
leeroyjenkins11 5y ago
If the government takes half of what I make it would probably be time for a revolution. I make a good living, but having half of what I make support 3 other people that are not my family and just giving them cash. Like being on the afternoon of Wednesday and realizing that all the work I did in the week so far was taken away to give to someone else without my input is insane. And I give over 10 percent of what I earn to charity, but I decide what causes to support and who to help. The nibbling around the policy is because they know what you proposed would mean they get tared and feathered so they just use it as an excuse to buy votes.
- DocG 5y ago
  I think most of EU countries your total tax burden is already 50% of what employer pays. Mostly we don't see that part and only talk about what employer has to pay that is less than 50% But even some countries at certain brackets have the only income tax part over 50%. So flat 50% of total tax burden would not be unheard of.
- mollerhoj 5y ago
  Hello from Scandinavia. No Revolutions in sight, government takes 70% (taking both tax and vat into account)
  - macilacilove 5y ago
    you can not take both income tax and VAT into account, because VAT is payed by the retailer really. That would count VAT twice.
    - 0xfaded 5y ago
      The retailer gets to claim any VAT they pay back from the government. Individuals do pay 60-70% tax (if you include payroll), but it's better to look at the overall taxation rate which is ~50% of GDP.
- tweetle_beetle 5y ago
  You have enough to support 6 people, but, because you donate enough to support 0.6 to a beneficiary of your choice, a revolution would be required if you only had enough to support 3? Where do you want the money for UBI come from, or do you just not want it full stop?
dagw 5y ago
The problem with a high flat tax on the first dollar earned over UBI is that it creates stronger disincentives to work. As to point 5, I would exclude citizens not living full time in the country and possibly include non-citizens who have qualified for permanent residency and have lived full time in the country for N years.
- 3pt14159 5y ago
  I agree with your latter point. Fully out of country[0] citizens and maybe permanent residents after a certain amount of time. But not the high flat tax thing. For the income portion of my compensation, I pay around 50% and it's not bad. With a UBI and a flat tax we don't have to make exceptions for married couples or non-married couples. The marginal dollar is always taxed the same. And if you're making, say, $60k a year that would be $42k after the UBI so the effective tax rate is 30% which seems reasonable. [0] There have been years where I was out of country for long enough to not have to pay taxes to Canada if I had been in one spot, but I'd moved around enough not to qualify to pay anywhere else so I was still paying taxes to Canada despite not being here for a while. Common enough digital nomad thing.
snidane 5y ago
UBI can work if and only if you can curb monopoly private taxes (real estate rents, fees, tips). Otherwise any money handed out freely to people end up immediately eaten up by monopoly private taxes for having no competition to level prices down. Case in point: give out $1000 dollars in UBI, expect rents increase by about that amount within the next 2 years as current leases expire. To implement UBI you must first get of private taxes one by one, then reduce the public income and consumption taxes and then with much of the costs lifted up off the middle class you realize you have a society that is freed up of (feu)dal taxes again and doesn't need any welfare nor UBI anymore.
- beeboop 5y ago
  >Case in point: give out $1000 dollars in UBI, expect rents increase by about that amount within the next 2 years as current leases expire. I see no evidence that this would be the case

Retric 5y ago

Implementing social security in the first place took massive social upheaval. UBI as a thought experiment is never going to happen, it would take a massive political movement or economic apocalypse.

VWWHFSfQ 5y ago
I think it's pretty likely that some country will actually try it. Most likely one of the oil-rich welfare states in the nordics. I doubt it lasts very long though especially after they start seeing an explosion of immigration. From my experience, the citizens of those north European countries don't like people that don't look like them.
- pc86 5y ago
  As a general rule, people in aggregate don't like people that don't look like them. It's certainly not specific to northern Europe.
- merpnderp 5y ago
  If they see an explosion of immigration, it’s because of the illegal immigrant labor market created by the massive spike in wages and massive decline in available labor. The governments can’t keep people out but also can’t make the new people citizens else it would instantly bankrupt UBI. This seems like the Achilles heel of UBI.
  - Retric 5y ago
    There are two option either immigrants are allowed to integrate with society at which point UBI should be close to cost neutral, or they aren’t allowed to integrate with society at which point immigrants don’t qualify for UBI.
    - nybble41 5y ago
      I don't see anything about being "allowed to integrate with society" which would make it "cost neutral" for someone to immigrate to a country and begin drawing a UBI without any obligation to work for it. (Of course if one does have to work for it then it's not UBI; that's just a regular job.)
      - Retric 5y ago
        It’s not a question of what a single immigrant does, but what all immigrants do as a group. It might be that immigrants on net cost more in UBI than they contributed to the UBI program but such imbalance could just as easily go the other direction. In the end working must provide incentives for natives to work for any UBI system to exist and those same incentives would apply to immigrants.
        nybble41 5y ago
        > working must provide incentives for natives to work for any UBI system to exist Well, yes, and that's kind of an unsolved problem. The immigration issue doesn't help. > It’s not a question of what a single immigrant does, but what all immigrants do as a group. Agreed, but what kind of immigrants will a country with a UBI (available to immigrants) tend to attract, ones that want to work or ones that want to collect the UBI? The former group would be better served immigrating somewhere else with lower taxes and no UBI. Like-minded "natives" would most likely do the same, to some extent, though leaving one's birth country is not something undertaken lightly.
imtringued 5y ago
A land value tax would be more useful if someone wants to play social upheaval poker. The Danes have an incredibly long history of land value taxation where every time special interests abolished it, things go to shit very quickly and they recovered very quickly once the tax was reinstated.

deleted 5y ago

[deleted]

pydry 5y ago

Passing a flat tax in a major democracy is difficult because it's a tax designed to be heavily regressive whilst sounding vaguely fair if you dont pay too much attention. It's equally hard if not harder to pass a well run progressive tax (e.g. a land value tax). Instead we get a hodgepodge of progressive and regressive combined to reflect the power struggle between oligarchy and democracy that makes up most western power centers. Also we get mollified with political pipe dreams designed to be easy to murder in their sleep (e.g. UBI) to take the heat off more "dangerous to profit" policies like minimum wage hikes.

DocTomoe 5y ago

If you raise taxes and prices a lot, UBI will become basically useless, because it's effects will be eaten up by inflation. Hell, why wouldn't I increase rent to the UBI amount?

bryanlarsen 5y ago
If UBI doesn't increase the money supply (aka it is paid for with taxing), it shouldn't increase inflation.
- pc86 5y ago
  Strictly speaking this isn't the case. If you define inflation with a set CPI basket, and your redistribution moves money to people whose purchasing is more correlated with that basket than the people you're taking the money from, inflation will increase.
- collegeburner 5y ago
  Wrong, money velocity and demand (both probably go up under this scheme) can increase inflation. So can shortages caused by a big demand spike.
  - bryanlarsen 5y ago
    Demand for food and housing doesn't go up with UBI, there are still the same number of people.
    - collegeburner 5y ago
      More desirable food (organic, grass fed, whatever) and more desirable housing will both have increased demand, especially short term. Also even if we hold food and housing constant, more money frees up what people formerly spent on food and housing to spend on other stuff so demand increases there. America has very high marginal propensity to consume so most of this will be spent. An additional tax that redistributes primarily will also be spent much more because poor and middle class have higher MPC than rich.

leeroyjenkins11 5y ago

If the government takes half of what I make it would probably be time for a revolution. I make a good living, but having half of what I make support 3 other people that are not my family and just giving them cash. Like being on the afternoon of Wednesday and realizing that all the work I did in the week so far was taken away to give to someone else without my input is insane. And I give over 10 percent of what I earn to charity, but I decide what causes to support and who to help. The nibbling around the policy is because they know what you proposed would mean they get tared and feathered so they just use it as an excuse to buy votes.

DocG 5y ago
I think most of EU countries your total tax burden is already 50% of what employer pays. Mostly we don't see that part and only talk about what employer has to pay that is less than 50% But even some countries at certain brackets have the only income tax part over 50%. So flat 50% of total tax burden would not be unheard of.
mollerhoj 5y ago
Hello from Scandinavia. No Revolutions in sight, government takes 70% (taking both tax and vat into account)
- macilacilove 5y ago
  you can not take both income tax and VAT into account, because VAT is payed by the retailer really. That would count VAT twice.
  - 0xfaded 5y ago
    The retailer gets to claim any VAT they pay back from the government. Individuals do pay 60-70% tax (if you include payroll), but it's better to look at the overall taxation rate which is ~50% of GDP.
tweetle_beetle 5y ago
You have enough to support 6 people, but, because you donate enough to support 0.6 to a beneficiary of your choice, a revolution would be required if you only had enough to support 3? Where do you want the money for UBI come from, or do you just not want it full stop?

dagw 5y ago

The problem with a high flat tax on the first dollar earned over UBI is that it creates stronger disincentives to work. As to point 5, I would exclude citizens not living full time in the country and possibly include non-citizens who have qualified for permanent residency and have lived full time in the country for N years.

3pt14159 5y ago
I agree with your latter point. Fully out of country[0] citizens and maybe permanent residents after a certain amount of time. But not the high flat tax thing. For the income portion of my compensation, I pay around 50% and it's not bad. With a UBI and a flat tax we don't have to make exceptions for married couples or non-married couples. The marginal dollar is always taxed the same. And if you're making, say, $60k a year that would be $42k after the UBI so the effective tax rate is 30% which seems reasonable. [0] There have been years where I was out of country for long enough to not have to pay taxes to Canada if I had been in one spot, but I'd moved around enough not to qualify to pay anywhere else so I was still paying taxes to Canada despite not being here for a while. Common enough digital nomad thing.

snidane 5y ago

UBI can work if and only if you can curb monopoly private taxes (real estate rents, fees, tips). Otherwise any money handed out freely to people end up immediately eaten up by monopoly private taxes for having no competition to level prices down. Case in point: give out $1000 dollars in UBI, expect rents increase by about that amount within the next 2 years as current leases expire. To implement UBI you must first get of private taxes one by one, then reduce the public income and consumption taxes and then with much of the costs lifted up off the middle class you realize you have a society that is freed up of (feu)dal taxes again and doesn't need any welfare nor UBI anymore.

beeboop 5y ago
>Case in point: give out $1000 dollars in UBI, expect rents increase by about that amount within the next 2 years as current leases expire. I see no evidence that this would be the case