5 ms·

1) UBI is not UBI unless everyone gets it. 2) Any income surplus generated by UBI is rapidly consumed by middle people and rent-seekers. That’s how we get infl

1) UBI is not UBI unless everyone gets it. 2) Any income surplus generated by UBI is rapidly consumed by middle people and rent-seekers. That’s how we get inflation.

dragonwriter 5y ago
> Any income surplus generated by UBI Typical UBI proposals are funded, e.g., by additional progressive taxes, and so no actual income surplus is generated (in a first-order analysis), income is redistributed, compressing distribution.
- adolph 5y ago
  > funded, e.g., by additional progressive taxes At which point the proposal becomes a welfare system that pointlessly disburses and claws-back cash.
  - dragonwriter 5y ago
    Not really. The fundamental problem of means-tested welfare programs that UBI addresses remain: (1) Eliminates multiple sets of inefficient benefits/eligibility bureaucracy that duplicates functionality already performed as part of taxing authority. (2) Eliminates a counterproductive incentives associated with typical means-tested benefit eligibility, which has clawbacks at low income levels and rapid marginal rate (sometimes exceeding 100% with marginal income when tallied across all means-tested programs; this effect creates a barrier to progress beyond a low income level. (While progressive income taxes may be raised from previous levels to fund it, when viewed as clawbacks these changes typically kick in at much higher income levels and lower marginal rates than typical means-tested benefit clawback.)
    - account42 5y ago
      (3) Eliminates the psychological torment that being subjected to a means-tested welfare program can inflict.
    - adolph 5y ago
      From a US point of view, when was the last time any entrenched bureaucracy was eliminated? As a baby step in redundancy reduction, is it realistic to think that UBI going to get rid of a program like WIC, against the full power of big ag brandishing starving baby pictures? Your second point acknowledges that taxing away UBI through progressive tax rates is a clawback. As I read it, your idea is that the increased marginal taxation due to the clawback will occur at higher income levels than exist with current programs. Why not just change the existing tax rates instead of sending out cash and taxing it back?
      - dragonwriter 5y ago
        > From a US point of view, when was the last time any entrenched bureaucracy was eliminated? The most recent that springs to mind is the elimination of most of the conscription-related bureaucracy post-Vietnam. > Your second point acknowledges that taxing away UBI through progressive tax rates is a clawback. As I read it, your idea is that the increased marginal taxation due to the clawback will occur at higher income levels than exist with current programs. Why not just change the existing tax rates instead of sending out cash and taxing it back? A baseline tax credit plus adjustments to existing rates is widely recognized as one mechanism for implementing a UBI, but even the there is often a desire to have an estimated advance mechanism, to avoid a delay of potentially more than a year from when people enter the UBI-covered population and when they start benfiting from it.
        adolph 5y ago
        > elimination of most of the conscription-related bureaucracy I was just thinking of that as an entrenched bureaucracy example but decided to focus things on an entitlement program. Despite having zero purpose for 49 years, Selective Service still manages to spend $26m/year [0]. > often a desire to have an estimated advance mechanism, to avoid a delay of potentially more than a year The model for advance payments on an upcoming year's tax credits already exists [1]. I can see how this doesn't address downward change in income, but also don't see how that couldn't be added. 0. https://www.sss.gov/wp-content/uploads/2022/03/Annual-Report-2021-3-24-22.pdf https://www.sss.gov/wp-content/uploads/2022/03/Annual-Report... 1. https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021 https://www.irs.gov/credits-deductions/advance-child-tax-cre...
lostphilosopher 5y ago
Does anyone have a good explanation (or resource) for why this wouldn’t happen?
- aaronblohowiak 5y ago
  Because you increase taxes to offset it so no net new money is added to the system. Everyone gets ubi but only some people get new taxes.
- bo1024 5y ago
  The theory is just supply and demand, which is how prices are determined in a competitive market. If you give everyone $20k, would you expect grocery stores to raise the price of bananas to $20/lb? Probably not, since people can just go to the grocery store down the street. Now if everyone suddenly wanted to buy more bananas with their new cash that would have an effect, but that’s how markets are supposed to work. In practice it probably depends on a lot of factors and would need empirical studies.
  - webstrand 5y ago
    Why wouldn't rent just increase to capture this new income for most people? If UBI is high enough to afford mortgage payments on an owned house, housing prices will skyrocket (even more than now) until those receiving the UBI are priced out of the market once again. Because once the mortgage is paid off, the value of the property is expected to grow, and that's a bet lots of people are taking, even now in this crazy market.
    - seanmcdirmid 5y ago
      We could do what they do in Japan and deprecate housing as it ages. Very few people buy second hand properties, so a house is a liability that needs to be demolished vs land without one. It also helps if no one believes in property speculation because of a huge property bubble that burst in the 80s.
      - 5y ago
tacitusarc 5y ago
I do not understand what you are trying to convey through either of these points. Would you mind clarifying?
- ars 5y ago
  He's saying that if everyone has extra money, then everyone can afford higher prices. Since they can afford higher prices, people will charge those higher prices. And you are back where you started.
  - bo1024 5y ago
    That’s not how market prices are generally set. Competition and demand keep them low. It might happen the way you describe sometimes but it’s far from a guarantee.
    - shukantpal 5y ago
      Then you can simply encourage competition to drive down prices lower.
    - ars 5y ago
      You'd think so, but history shows different. If everyone has the same extra money, prices go up to match. It's a type of inflation I guess.
  - dragonwriter 5y ago
    > He's saying that if everyone has extra money, then everyone can afford higher prices. UBI only gives everyone extra money if it is unfunded; typical UBI proposals are funded by either increased progressive income taxes or cutting other spending (which produces income to the recipient), and so is (in first order effects) zero-sum. (Typically, it replaces rapid clawbacks from means testing with slow clawbacks by progressive tax increases.)
- bduerst 5y ago
  There are goods and services with income-elastic pricing, like housing. UBI indirectly and unfairly benefits only the people who control those goods and services. If everyone made $1000 more per month, housing prices would raise up to that amount for everyone. This means the majority of the UBI raise would go into just the landlords pockets. This is why many welfare programs are expense- or need-dependent, because it maximizes the benefit to those who need it without impacting price inflation as much.
bo1024 5y ago
I agree with #1, although also with the person who mentioned taxes can be changed to effectively control who gets how much net benefit. On #2 I think your claim needs evidence or support, I doubt that would be true for the most part (maybe to some extent).
- ethanbond 5y ago
  The evidence for 2) is literally all around you. Why is an empty shack-sized lot in Palo Alto worth $1MM+? Simply and only because the people there earn enough money to buy it.

1) UBI is not UBI unless everyone gets it. 2) Any income surplus generated by UBI is rapidly consumed by middle people and rent-seekers. That’s how we get inflation.

dragonwriter 5y ago

> Any income surplus generated by UBI Typical UBI proposals are funded, e.g., by additional progressive taxes, and so no actual income surplus is generated (in a first-order analysis), income is redistributed, compressing distribution.

adolph 5y ago
> funded, e.g., by additional progressive taxes At which point the proposal becomes a welfare system that pointlessly disburses and claws-back cash.
- dragonwriter 5y ago
  Not really. The fundamental problem of means-tested welfare programs that UBI addresses remain: (1) Eliminates multiple sets of inefficient benefits/eligibility bureaucracy that duplicates functionality already performed as part of taxing authority. (2) Eliminates a counterproductive incentives associated with typical means-tested benefit eligibility, which has clawbacks at low income levels and rapid marginal rate (sometimes exceeding 100% with marginal income when tallied across all means-tested programs; this effect creates a barrier to progress beyond a low income level. (While progressive income taxes may be raised from previous levels to fund it, when viewed as clawbacks these changes typically kick in at much higher income levels and lower marginal rates than typical means-tested benefit clawback.)
  - account42 5y ago
    (3) Eliminates the psychological torment that being subjected to a means-tested welfare program can inflict.
  - adolph 5y ago
    From a US point of view, when was the last time any entrenched bureaucracy was eliminated? As a baby step in redundancy reduction, is it realistic to think that UBI going to get rid of a program like WIC, against the full power of big ag brandishing starving baby pictures? Your second point acknowledges that taxing away UBI through progressive tax rates is a clawback. As I read it, your idea is that the increased marginal taxation due to the clawback will occur at higher income levels than exist with current programs. Why not just change the existing tax rates instead of sending out cash and taxing it back?
    - dragonwriter 5y ago
      > From a US point of view, when was the last time any entrenched bureaucracy was eliminated? The most recent that springs to mind is the elimination of most of the conscription-related bureaucracy post-Vietnam. > Your second point acknowledges that taxing away UBI through progressive tax rates is a clawback. As I read it, your idea is that the increased marginal taxation due to the clawback will occur at higher income levels than exist with current programs. Why not just change the existing tax rates instead of sending out cash and taxing it back? A baseline tax credit plus adjustments to existing rates is widely recognized as one mechanism for implementing a UBI, but even the there is often a desire to have an estimated advance mechanism, to avoid a delay of potentially more than a year from when people enter the UBI-covered population and when they start benfiting from it.
      - adolph 5y ago
        > elimination of most of the conscription-related bureaucracy I was just thinking of that as an entrenched bureaucracy example but decided to focus things on an entitlement program. Despite having zero purpose for 49 years, Selective Service still manages to spend $26m/year [0]. > often a desire to have an estimated advance mechanism, to avoid a delay of potentially more than a year The model for advance payments on an upcoming year's tax credits already exists [1]. I can see how this doesn't address downward change in income, but also don't see how that couldn't be added. 0. https://www.sss.gov/wp-content/uploads/2022/03/Annual-Report-2021-3-24-22.pdf https://www.sss.gov/wp-content/uploads/2022/03/Annual-Report... 1. https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021 https://www.irs.gov/credits-deductions/advance-child-tax-cre...

lostphilosopher 5y ago

Does anyone have a good explanation (or resource) for why this wouldn’t happen?

aaronblohowiak 5y ago
Because you increase taxes to offset it so no net new money is added to the system. Everyone gets ubi but only some people get new taxes.
bo1024 5y ago
The theory is just supply and demand, which is how prices are determined in a competitive market. If you give everyone $20k, would you expect grocery stores to raise the price of bananas to $20/lb? Probably not, since people can just go to the grocery store down the street. Now if everyone suddenly wanted to buy more bananas with their new cash that would have an effect, but that’s how markets are supposed to work. In practice it probably depends on a lot of factors and would need empirical studies.
- webstrand 5y ago
  Why wouldn't rent just increase to capture this new income for most people? If UBI is high enough to afford mortgage payments on an owned house, housing prices will skyrocket (even more than now) until those receiving the UBI are priced out of the market once again. Because once the mortgage is paid off, the value of the property is expected to grow, and that's a bet lots of people are taking, even now in this crazy market.
  - seanmcdirmid 5y ago
    We could do what they do in Japan and deprecate housing as it ages. Very few people buy second hand properties, so a house is a liability that needs to be demolished vs land without one. It also helps if no one believes in property speculation because of a huge property bubble that burst in the 80s.
    - 5y ago

tacitusarc 5y ago

I do not understand what you are trying to convey through either of these points. Would you mind clarifying?

ars 5y ago
He's saying that if everyone has extra money, then everyone can afford higher prices. Since they can afford higher prices, people will charge those higher prices. And you are back where you started.
- bo1024 5y ago
  That’s not how market prices are generally set. Competition and demand keep them low. It might happen the way you describe sometimes but it’s far from a guarantee.
  - shukantpal 5y ago
    Then you can simply encourage competition to drive down prices lower.
  - ars 5y ago
    You'd think so, but history shows different. If everyone has the same extra money, prices go up to match. It's a type of inflation I guess.
- dragonwriter 5y ago
  > He's saying that if everyone has extra money, then everyone can afford higher prices. UBI only gives everyone extra money if it is unfunded; typical UBI proposals are funded by either increased progressive income taxes or cutting other spending (which produces income to the recipient), and so is (in first order effects) zero-sum. (Typically, it replaces rapid clawbacks from means testing with slow clawbacks by progressive tax increases.)
bduerst 5y ago
There are goods and services with income-elastic pricing, like housing. UBI indirectly and unfairly benefits only the people who control those goods and services. If everyone made $1000 more per month, housing prices would raise up to that amount for everyone. This means the majority of the UBI raise would go into just the landlords pockets. This is why many welfare programs are expense- or need-dependent, because it maximizes the benefit to those who need it without impacting price inflation as much.

bo1024 5y ago

I agree with #1, although also with the person who mentioned taxes can be changed to effectively control who gets how much net benefit. On #2 I think your claim needs evidence or support, I doubt that would be true for the most part (maybe to some extent).

ethanbond 5y ago
The evidence for 2) is literally all around you. Why is an empty shack-sized lot in Palo Alto worth $1MM+? Simply and only because the people there earn enough money to buy it.