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Progressive taxation that starts from negative tax rate and goes upwards from there as more income is generate by working more is quite reasonable. You always

by yason 13y ago

Progressive taxation that starts from negative tax rate and goes upwards from there as more income is generate by working more is quite reasonable. You always get something but most people want slightly more or much more, so they can choose to work just enough to get what they wanted. The tax rate goes up as the more work you do, so at some point you actually start paying taxes instead of receiving money as negative taxes. In this scheme, if you work more then you always get more money. Currently it doesn't always make sense to go to work because welfare/unemployment subsidies will disappear at some point.

scarmig 13y ago
Progressive taxation has always been something of a hack: it's easier to get a greater proportion of someone's money when they're relatively well off than when they can barely pay for food and housing. Perhaps for good reason. But one of the compelling parts of a basic income is that it cuts away the moral argument for progressive taxation: the basic income amount people are provided is enough to pay for the necessities of life, which is what progressive taxation tries to allow for. Replacing the progressive income tax with a basic income funded by a flat tax on all earned income combines the respective moral appeals of progressive and flat taxation while also being more economically efficient.
- keithnoizu 13y ago
  The premise for the progressive tax is that those that have benefited the most from the infrastructure provided by the government should repay the most. I don't think that tenant disappears the second you include a basic income allotment.
  - scarmig 13y ago
    In my experience, most educated proponents of progressive taxation believe in something like "the marginal utility per dollar for poor people is higher than that of rich people, and the government should attempt to tax toward some concept of equi-utility," though I'm certainly open to hearing that that's not what most believe. In other words, taxing $1 from a poor person takes food out of their mouth while taxing $1 from a rich person delays the purchase of a new yacht by 1 second, so we should take that money from the person who'll lose less utility by its taking. We also don't realistically attempt to tax people according to some abstract conception of who has benefited the most from government infrastructure.
    - keithnoizu 13y ago
      Also true, and equally applicable even if a base income were provided.
  - yummyfajitas 13y ago
    But if that were the case, then we would have a progressive consumption tax, not a progressive income tax. Consumption is the benefit received from society. Income is merely potential consumption. And the rich tend not to consume to their full potential - rather, they tend to reinvest significant chunks of their income in society instead.
- fulafel 13y ago
  > one of the compelling parts of a basic income is that it cuts away the moral argument for progressive taxation: the basic income amount people are provided is enough to pay for the necessities of life It doesn't provide for necessities in many (most?) of the basic income proposals. Many proposals still leave a lot of the circumstance dependent benefits in place (eg providing for kids if you have them) so the basic income can be kept fairly low. But yes, tax progression it does replace.
masklinn 13y ago
> welfare/unemployment subsidies will disappear at some point. Indeed, as a houseworker my parents employed discovered a decade or so ago (she had been completely out of the loop and on welfare for a decade or so, started trying to fix things by doing housework in order to "re-integrate") who one day found out she'd gone above the magical threshold and had lost a number of benefits including holidays subsidies for her children which her income wouldn't compensate by a very long shot. Sharp cutoffs on welfare are a disincentive, because they create a serious discontinuity in which your effective income craters as you lose all benefits but your income doesn't come close to compensating, and thus you work harder but your quality of life declines.
josephlord 13y ago
I think this is the sensible implementation of the basic income. You get basic payment and then you can get rid of not just many benefits but also tax allowances and thresholds and pay a flat rate on all earned income. This would eliminate further the cliffs/incentive changes with the basic income payment added to the tax the actual effect would be pretty progressive while everyone (who earns anything above the basic) would feel they are contributing. What I have never done is really make an attempt to calculate the necessary rate of tax to support a useful basic income. I suspect it would be quite high.

by yason 13y ago

scarmig 13y ago

Progressive taxation has always been something of a hack: it's easier to get a greater proportion of someone's money when they're relatively well off than when they can barely pay for food and housing. Perhaps for good reason. But one of the compelling parts of a basic income is that it cuts away the moral argument for progressive taxation: the basic income amount people are provided is enough to pay for the necessities of life, which is what progressive taxation tries to allow for. Replacing the progressive income tax with a basic income funded by a flat tax on all earned income combines the respective moral appeals of progressive and flat taxation while also being more economically efficient.

keithnoizu 13y ago
The premise for the progressive tax is that those that have benefited the most from the infrastructure provided by the government should repay the most. I don't think that tenant disappears the second you include a basic income allotment.
- scarmig 13y ago
  In my experience, most educated proponents of progressive taxation believe in something like "the marginal utility per dollar for poor people is higher than that of rich people, and the government should attempt to tax toward some concept of equi-utility," though I'm certainly open to hearing that that's not what most believe. In other words, taxing $1 from a poor person takes food out of their mouth while taxing $1 from a rich person delays the purchase of a new yacht by 1 second, so we should take that money from the person who'll lose less utility by its taking. We also don't realistically attempt to tax people according to some abstract conception of who has benefited the most from government infrastructure.
  - keithnoizu 13y ago
    Also true, and equally applicable even if a base income were provided.
- yummyfajitas 13y ago
  But if that were the case, then we would have a progressive consumption tax, not a progressive income tax. Consumption is the benefit received from society. Income is merely potential consumption. And the rich tend not to consume to their full potential - rather, they tend to reinvest significant chunks of their income in society instead.
fulafel 13y ago
> one of the compelling parts of a basic income is that it cuts away the moral argument for progressive taxation: the basic income amount people are provided is enough to pay for the necessities of life It doesn't provide for necessities in many (most?) of the basic income proposals. Many proposals still leave a lot of the circumstance dependent benefits in place (eg providing for kids if you have them) so the basic income can be kept fairly low. But yes, tax progression it does replace.

masklinn 13y ago

> welfare/unemployment subsidies will disappear at some point. Indeed, as a houseworker my parents employed discovered a decade or so ago (she had been completely out of the loop and on welfare for a decade or so, started trying to fix things by doing housework in order to "re-integrate") who one day found out she'd gone above the magical threshold and had lost a number of benefits including holidays subsidies for her children which her income wouldn't compensate by a very long shot. Sharp cutoffs on welfare are a disincentive, because they create a serious discontinuity in which your effective income craters as you lose all benefits but your income doesn't come close to compensating, and thus you work harder but your quality of life declines.

josephlord 13y ago

I think this is the sensible implementation of the basic income. You get basic payment and then you can get rid of not just many benefits but also tax allowances and thresholds and pay a flat rate on all earned income. This would eliminate further the cliffs/incentive changes with the basic income payment added to the tax the actual effect would be pretty progressive while everyone (who earns anything above the basic) would feel they are contributing. What I have never done is really make an attempt to calculate the necessary rate of tax to support a useful basic income. I suspect it would be quite high.