4 ms·

But then you’re talking about the effects of a high marginal tax rate, not UBI.

danenania 3y ago
I'm talking about the effects of wealth redistribution vs. money supply expansion. Redistribution doesn't necessarily increase prices since the total amount of purchasing power in the market doesn't change. It's certainly not as simplistic as "rent gets increased in proportion to the amount of the UBI" as you're implying.
- ethanbond 3y ago
  Taking into account redistribution, the story is even more bleak, not less. Lower income housing prices will rise faster than higher income housing prices.
  - danenania 3y ago
    Why? What makes prices go up given a constant money supply?
    - ethanbond 3y ago
      The ability to charge more? Analogous example in minimum wage increases: https://www.sciencedirect.com/science/article/abs/pii/S0094119021001030 https://www.sciencedirect.com/science/article/abs/pii/S00941... Evictions went down for 3 months, then rose again back to their prior levels as landlords increased rents.
      - danenania 3y ago
        Again, it’s not clear that they’d be able to charge more given that less purchasing power for high income earners would push real estate prices (and therefore rents) downward. In the study you posted, it’s not possible to isolate the variable. Many things could have affected the (minor) changes in rents. Not a good analysis. Minimum wage increases purchasing power for the employed workers, but also increases unemployment, which has the opposite effect on prices.
        ethanbond 3y ago
        The decreased purchasing power at the high end 1) is a consequence of taxes, not UBI itself, and 2) wouldn’t push prices down for lower income housing writ large. At the absolute margins, a high-income earner who is being taxed into lower-income housing is increasing competition among tenants for the same low-income housing, which will increase those prices. If you want to tax high-income people into lower-income housing then just increase their taxes. What does UBI have to do with any of that? It’s not possible to “isolate the variable” in any economic study ever, so I suppose both of us will have to argue from conjecture. My conjecture, as a landlord, is that if incomes go up in my market, that is unambiguous signal that I can increase my prices. Your conjecture is “you won’t be able to,” but I already know I’m able to. That is how I’ve already set the price I charge. The best possible news for me, an absentee landlord, is a big company with high salaries opening an office nearby. Same as every other landlord.
        danenania 3y ago
        > is a consequence of taxes, not UBI itself A distinction without a difference imo. My point is that how you pay for it is what determines the impact on prices, but I think we’re basically rehashing demand-side vs. supply-side economics at this point. > I already know I’m able to You don’t decide the market rate by yourself. And I don’t think you’re properly accounting for how UBI impacts this in aggregate.
        ethanbond 3y ago
        No, how you pay for it doesn't change UBI's effect on pricing. UBI has exactly the effect I'm describing. Separately, a tax scheme may have a different, countervailing effect, regardless of whether or not it's related to UBI. That countervailing effect could arguably overcome UBI's positive pressure on prices, but it's a totally separate effect from a separate policy and even still your explanation of the mechanism looks totally incoherent. Please explain how taxing high-income people into low-income housing doesn't increase the prices of traditionally low-income housing.
        3y ago

I'm talking about the effects of wealth redistribution vs. money supply expansion. Redistribution doesn't necessarily increase prices since the total amount of purchasing power in the market doesn't change. It's certainly not as simplistic as "rent gets increased in proportion to the amount of the UBI" as you're implying.

ethanbond 3y ago
Taking into account redistribution, the story is even more bleak, not less. Lower income housing prices will rise faster than higher income housing prices.
- danenania 3y ago
  Why? What makes prices go up given a constant money supply?
  - ethanbond 3y ago
    The ability to charge more? Analogous example in minimum wage increases: https://www.sciencedirect.com/science/article/abs/pii/S0094119021001030 https://www.sciencedirect.com/science/article/abs/pii/S00941... Evictions went down for 3 months, then rose again back to their prior levels as landlords increased rents.
    - danenania 3y ago
      Again, it’s not clear that they’d be able to charge more given that less purchasing power for high income earners would push real estate prices (and therefore rents) downward. In the study you posted, it’s not possible to isolate the variable. Many things could have affected the (minor) changes in rents. Not a good analysis. Minimum wage increases purchasing power for the employed workers, but also increases unemployment, which has the opposite effect on prices.
      - ethanbond 3y ago
        The decreased purchasing power at the high end 1) is a consequence of taxes, not UBI itself, and 2) wouldn’t push prices down for lower income housing writ large. At the absolute margins, a high-income earner who is being taxed into lower-income housing is increasing competition among tenants for the same low-income housing, which will increase those prices. If you want to tax high-income people into lower-income housing then just increase their taxes. What does UBI have to do with any of that? It’s not possible to “isolate the variable” in any economic study ever, so I suppose both of us will have to argue from conjecture. My conjecture, as a landlord, is that if incomes go up in my market, that is unambiguous signal that I can increase my prices. Your conjecture is “you won’t be able to,” but I already know I’m able to. That is how I’ve already set the price I charge. The best possible news for me, an absentee landlord, is a big company with high salaries opening an office nearby. Same as every other landlord.
        danenania 3y ago
        > is a consequence of taxes, not UBI itself A distinction without a difference imo. My point is that how you pay for it is what determines the impact on prices, but I think we’re basically rehashing demand-side vs. supply-side economics at this point. > I already know I’m able to You don’t decide the market rate by yourself. And I don’t think you’re properly accounting for how UBI impacts this in aggregate.
        ethanbond 3y ago
        No, how you pay for it doesn't change UBI's effect on pricing. UBI has exactly the effect I'm describing. Separately, a tax scheme may have a different, countervailing effect, regardless of whether or not it's related to UBI. That countervailing effect could arguably overcome UBI's positive pressure on prices, but it's a totally separate effect from a separate policy and even still your explanation of the mechanism looks totally incoherent. Please explain how taxing high-income people into low-income housing doesn't increase the prices of traditionally low-income housing.
        3y ago