4 ms·

> The only long term solution is a basic income system We already have basic income (guaranteed income/'living wage'/whatever buzzword you want to use) in the

> The only long term solution is a basic income system We already have basic income (guaranteed income/'living wage'/whatever buzzword you want to use) in the US, it's called... welfare and disability.

tjic 14y ago
This is the point made by blogger The Last Psychiatrist.
michaelochurch 14y ago
That's closer to a minimum income program, in any case. The difference is that a basic income means that X amount is paid to everyone. There's no "welfare valley" (or plateau). Every $1 earned on the market is $1 (less taxes) earned.
deleted 14y ago
[deleted]
jchrisa 14y ago
There are BIG problems with welfare that are solved by giving it to Bill Gates also. For starters, right now the income you get when you transition off of welfare is taxed at greater than 100% - why work when you can get paid more to do nothing and get paid more?
- yebyen 14y ago
  Is that really true? Explain Are you saying that welfare income is not taxed, but when you earn the minimum amount required in order to be denied welfare, it's less than the welfare check / also taxed? I am not sure that's the same as 'taxed greater than 100%' -- that would mean that you've earned $10, so pay $13 in taxes. The math might work if you had actually been earning welfare; if you mean something else than what I'm saying, please explain.
  - scarmig 14y ago
    Well, we're talking about effective marginal rates, not the listed amounts. The next dollar would be taxed at 20% or whatever the listed rate is. However, if you also lose a dollar of welfare, the tax rate is actually 120%, at least in terms of how incentives influence someone's marginal decisions.
    - JamisonM 14y ago
      It is a little bit worse than this in many cases actually, you pay tax on your earnings AND you have to cover the costs of getting to and from work and things like childcare while you are at work. That being said, my experience is that among the poor there are very few that are not interested in working but I know of at least one person who did pull out of the workforce after finding that they were further behind with a job. Make of it what you will, I think it is a condemnation of low-skill labor rates, not of the welfare state.
    - vacri 14y ago
      It's not that hard to figure out - you just set a tax-free threshold of at least the amount of the minimum income. Minmimum income is $10k? Then the first $10k of any private income is tax-free. To entice people to work, you'd probably do it so that it takes a bit more than a dollar of private income to remove one dollar of minimum income, so that you're always better off if you work, and if you properly set up your tax rates, there will never be a point where you are a cent worse off for earning an extra dollar.
      - scarmig 14y ago
        You still might face very high effective marginal tax rates, though, even if below 100%: instead of an hour of work costing you money, an hour of work might effectively be worth $2.00. Still a huge disincentive. That's really hard to avoid when you do have conditional benefits that phase out with higher income. To "properly set up your tax rates" amounts to not having conditional benefits, which is a basic income under another name.
      - mgkimsal 14y ago
mjn 14y ago
The U.S. has a fairly weak welfare system, especially if you don't have kids. The EITC for people without kids maxes out at $487/yr. And many other assistance programs, such as Section 8 housing, are full in most of the country and not accepting new entrants (in SF even the waitlist is closed). In places where you can manage to get on the waitlist, it may take 2, 3, 4 years to qualify. Hardly equivalent to a minimum income, whose point is to function as an immediate/constant floor.

tjic 14y ago

This is the point made by blogger The Last Psychiatrist.

michaelochurch 14y ago

That's closer to a minimum income program, in any case. The difference is that a basic income means that X amount is paid to everyone. There's no "welfare valley" (or plateau). Every $1 earned on the market is $1 (less taxes) earned.

deleted 14y ago

[deleted]

jchrisa 14y ago

There are BIG problems with welfare that are solved by giving it to Bill Gates also. For starters, right now the income you get when you transition off of welfare is taxed at greater than 100% - why work when you can get paid more to do nothing and get paid more?

yebyen 14y ago
Is that really true? Explain Are you saying that welfare income is not taxed, but when you earn the minimum amount required in order to be denied welfare, it's less than the welfare check / also taxed? I am not sure that's the same as 'taxed greater than 100%' -- that would mean that you've earned $10, so pay $13 in taxes. The math might work if you had actually been earning welfare; if you mean something else than what I'm saying, please explain.
- scarmig 14y ago
  Well, we're talking about effective marginal rates, not the listed amounts. The next dollar would be taxed at 20% or whatever the listed rate is. However, if you also lose a dollar of welfare, the tax rate is actually 120%, at least in terms of how incentives influence someone's marginal decisions.
  - JamisonM 14y ago
    It is a little bit worse than this in many cases actually, you pay tax on your earnings AND you have to cover the costs of getting to and from work and things like childcare while you are at work. That being said, my experience is that among the poor there are very few that are not interested in working but I know of at least one person who did pull out of the workforce after finding that they were further behind with a job. Make of it what you will, I think it is a condemnation of low-skill labor rates, not of the welfare state.
  - vacri 14y ago
    It's not that hard to figure out - you just set a tax-free threshold of at least the amount of the minimum income. Minmimum income is $10k? Then the first $10k of any private income is tax-free. To entice people to work, you'd probably do it so that it takes a bit more than a dollar of private income to remove one dollar of minimum income, so that you're always better off if you work, and if you properly set up your tax rates, there will never be a point where you are a cent worse off for earning an extra dollar.
    - scarmig 14y ago
      You still might face very high effective marginal tax rates, though, even if below 100%: instead of an hour of work costing you money, an hour of work might effectively be worth $2.00. Still a huge disincentive. That's really hard to avoid when you do have conditional benefits that phase out with higher income. To "properly set up your tax rates" amounts to not having conditional benefits, which is a basic income under another name.
    - mgkimsal 14y ago

mjn 14y ago

The U.S. has a fairly weak welfare system, especially if you don't have kids. The EITC for people without kids maxes out at $487/yr. And many other assistance programs, such as Section 8 housing, are full in most of the country and not accepting new entrants (in SF even the waitlist is closed). In places where you can manage to get on the waitlist, it may take 2, 3, 4 years to qualify. Hardly equivalent to a minimum income, whose point is to function as an immediate/constant floor.