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As a libertarian-socialist, I'd love for us to collectively and indiscriminately provide everyone with a fair and appropriate basic minimum income. The only pro

As a libertarian-socialist, I'd love for us to collectively and indiscriminately provide everyone with a fair and appropriate basic minimum income. The only problem with this policy is how you pay for it. You can abolish all other forms of social assistance -but only if you can adequately justify the elimination of the bureaucratic government jobs associated with them. For an all inclusive basic income, no bureaucracy would be needed. You could tax the wealthy heavily -in effect making the basic income a negative income tax policy. This also seems like a worthy policy worth investigating. You could borrow the money by way of government securities. The only problem with this scheme however is that already you have people like myself, who are extremely skeptical of the long term health of the current world financial make-up of West versus Rest, which is already changing quickly. Personally I dismiss all arguments regarding a basic income harming poor people in the form of "inflation". We're currently in a deflationary crisis according to the big banks, and the social and political benefits to these policy changes would make it extremely hard to simply get rid of due to "bubbles and pops" as we have that plenty as it is. Can someone try to explain why something like this isn't possible? What if we increased taxes in the top most income bracket, abolished all forms of current social assistance, and took on more debt, hoping this can pay for itself (or to simply continue down the trajectory of more debt every year). Can someone try to explain why something like this could be more simple than I'm guessing?

dllthomas 13y ago
You would still need some bureaucracy to make sure people are not double-collecting, that people stop collecting after death, etc.
- farmdawgnation 13y ago
  Yeah, I was thinking the same. I'm wondering how much of that could be automated, though, through appropriate system design. The IRS knows when people are dead. Presumably, that system could then alert the BIG system to stop dispatching checks. That's just one solution to one problem in a sea of them, but I think it's a representative example.
  - dllthomas 13y ago
    People are motivated to let the IRS know when they screw up and demand money, though. People are going to be less motivated to let them know about someone who was simply receiving money. I agree and hope that bureaucracy can be reduced, though.
    - humanrebar 13y ago
      There is still motivation to be honest about receiving unwarranted money. Tax fraud is a felony and there are already regulations about receiving unwarranted tax funds.
      - dllthomas 13y ago
        For sure. In some sectors of our society, that doesn't seem to be enough, though.
- jjoonathan 13y ago
  Almost like the Social Security Administration?
  - dllthomas 13y ago
    I never said there wouldn't be overlap with other bureaucracy.
liquidise 13y ago
> You could tax the wealthy heavily At what % do we draw the line on taxing the wealthy? 35% 40% 50%? These numbers would be outraging to any other section of the populace. > dismiss all arguments regarding a basic income harming poor people in the form of "inflation" Scare quotes on inflation? Lower and middle classes feel inflation the most when it affects the costs of basic needs: bread, milk, etc. Those are the very items a basic income intend to give ubiquitous access to. Practically by definition a basic income would raise the prices of those items. > and took on more debt, hoping this can pay for itself This is the critical assumption here. There is an ongoing debate whether or not college degrees can even pay for themselves in many areas of study. This is a heavy handed gamble, and one i would be unwilling to risk our fiscal futures on.
- nathos 13y ago
  Post-WWII (and through 1964), the top marginal income tax rate in the United States was 91% http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...
  - liquidise 13y ago
    While [i hope] no one is suggesting a tax rate of 90+ %, i have to imagine that anything even close to that will result in widespread shipping of jobs and management overseas. Once a few companies do that, how much revenue loss would the states encounter. Substantial, i would think.
    - bencpeters 13y ago
      I really like this work: http://www.epi.org/publication/raising-income-taxes/ http://www.epi.org/publication/raising-income-taxes/ It basically suggests that: a)top tax rates have historically had virtually no significant effects on overall economic growth b)we are well below the optimal tax rate for maximizing revenues The authors of the paper on which this summary article is based on go on to suggest an optimal top effective rate of 68.7% as the revenue maximizing point (basically the optimal trade-off between revenue and dampening effects and/or evasion) I find this work pretty convincing...
craigyk 13y ago
Yes, for the ultra-wealthy basic income is essentially a fixed taxed deduction. I think almost everyone would agree that basic income would provide a marvelous opportunity to simplify things. Inflation seems like the biggest risk to basic income, but I don't think anyone can say how big of a problem it will be in practice. I think people have already put up potential ways to remedy it as well.
nickff 13y ago
What is the justification for taxing the wealthy disproportionately to their income? Is it out of moral need, financial expedience, or economic efficiency? If you wish to tax them out of moral need, you hold a normative belief which is unlikely to falter, so I will not challenge it. There is no financial reason why a 'progressive' income tax is better than a flat tax, as the 'progressive' system encourages evasion, and makes it easier, as well as greatly increasing the scope of government, requiring regulation of marriage and more. Economically, the 'progressive' income tax is completely unjustifiable, as the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods. Your idea of borrowing money by way of government securities is not a long term solution, because interest gradually becomes an increasingly large part of the budget. In the long term, interest will either gradually take over the entire government budget, or an interest rate increase will force the government to default; in either case, borrowing to finance regular spending will eventually fail as a policy. The 'inflation argument' against welfare policies is flawed as you point out, because it has never been demonstrated that wage increases cause inflation (so called "demand-pull inflation"). Whether or not some type of government welfare program should exist is an interesting question, and your answer seems to presuppose that the counter-factual is that there would be no social assistance program at all, whereas I would think that private charities would do a better job than the government, while avoiding coercion. If you require a government welfare program, I agree with you that a negative income tax is probably the least harmful, as it does not encourage unemployment.
- bencpeters 13y ago
  One argument I would make is a marginal utility one - the marginal utility of $ decreases dramatically at higher incomes, so even if you have a (comparatively) punishingly high tax rate on the rich, the amount that your tax is affecting their lives in real terms is lower due to the marginal utility of money at those incomes. I'm in the camp that it's reasonable to want at least some semblance of equality of outcome though, so this argument resonates with me in a way that it might not to someone who favors a more lassez-faire approach. This probably falls under your "moral need" umbrella. I don't agree with your statement about a progressive income tax being economically unjustifiable, especially in the economy that we find ourselves in at the moment (and, if secular stagnation proponents like Larry Summers and Paul Krugman are right, may be the structural norm these days). The current economy is strongly demand constrained, with plenty of money available for investment (corporate profits and cash holdings at record highs), but inadequate consumer demand to justify investments. From this perspective, a progressive transfer of wealth down the income scale makes a lot of sense economically because the poor are much more likely to actually spend that money than the rich are. There's also not much good evidence that high end tax rates affect macroeconomic growth as much as people claim - just in the US we've had tax rates all over the map over the past 100 years, and there's not much correlation with economic growth. We certainly haven't seen any miracles of economic growth for the economy as a whole since 1980 with the long running supply side, deregulation, and low tax experiment. If taxing the rich really has such a strong effect on economic growth and job creation, it's hard to see that in the data... Finally, interest on government debt only becomes a long-term problem if the rate is higher than the rate of growth. It's not clear to me that that has to be the case, but that's another discussion ;)
ahomescu1 13y ago
"Libertarian-socialist" sounds like a huge contradiction to me; you can be either one or the other, but they contradict each other. You're either for personal freedoms and individualism (i.e., libertarian), or for "the common good" (as most socialists claim to be).

dllthomas 13y ago

You would still need some bureaucracy to make sure people are not double-collecting, that people stop collecting after death, etc.

farmdawgnation 13y ago
Yeah, I was thinking the same. I'm wondering how much of that could be automated, though, through appropriate system design. The IRS knows when people are dead. Presumably, that system could then alert the BIG system to stop dispatching checks. That's just one solution to one problem in a sea of them, but I think it's a representative example.
- dllthomas 13y ago
  People are motivated to let the IRS know when they screw up and demand money, though. People are going to be less motivated to let them know about someone who was simply receiving money. I agree and hope that bureaucracy can be reduced, though.
  - humanrebar 13y ago
    There is still motivation to be honest about receiving unwarranted money. Tax fraud is a felony and there are already regulations about receiving unwarranted tax funds.
    - dllthomas 13y ago
      For sure. In some sectors of our society, that doesn't seem to be enough, though.
jjoonathan 13y ago
Almost like the Social Security Administration?
- dllthomas 13y ago
  I never said there wouldn't be overlap with other bureaucracy.

liquidise 13y ago

> You could tax the wealthy heavily At what % do we draw the line on taxing the wealthy? 35% 40% 50%? These numbers would be outraging to any other section of the populace. > dismiss all arguments regarding a basic income harming poor people in the form of "inflation" Scare quotes on inflation? Lower and middle classes feel inflation the most when it affects the costs of basic needs: bread, milk, etc. Those are the very items a basic income intend to give ubiquitous access to. Practically by definition a basic income would raise the prices of those items. > and took on more debt, hoping this can pay for itself This is the critical assumption here. There is an ongoing debate whether or not college degrees can even pay for themselves in many areas of study. This is a heavy handed gamble, and one i would be unwilling to risk our fiscal futures on.

nathos 13y ago
Post-WWII (and through 1964), the top marginal income tax rate in the United States was 91% http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...
- liquidise 13y ago
  While [i hope] no one is suggesting a tax rate of 90+ %, i have to imagine that anything even close to that will result in widespread shipping of jobs and management overseas. Once a few companies do that, how much revenue loss would the states encounter. Substantial, i would think.
  - bencpeters 13y ago
    I really like this work: http://www.epi.org/publication/raising-income-taxes/ http://www.epi.org/publication/raising-income-taxes/ It basically suggests that: a)top tax rates have historically had virtually no significant effects on overall economic growth b)we are well below the optimal tax rate for maximizing revenues The authors of the paper on which this summary article is based on go on to suggest an optimal top effective rate of 68.7% as the revenue maximizing point (basically the optimal trade-off between revenue and dampening effects and/or evasion) I find this work pretty convincing...

craigyk 13y ago

Yes, for the ultra-wealthy basic income is essentially a fixed taxed deduction. I think almost everyone would agree that basic income would provide a marvelous opportunity to simplify things. Inflation seems like the biggest risk to basic income, but I don't think anyone can say how big of a problem it will be in practice. I think people have already put up potential ways to remedy it as well.

nickff 13y ago

What is the justification for taxing the wealthy disproportionately to their income? Is it out of moral need, financial expedience, or economic efficiency? If you wish to tax them out of moral need, you hold a normative belief which is unlikely to falter, so I will not challenge it. There is no financial reason why a 'progressive' income tax is better than a flat tax, as the 'progressive' system encourages evasion, and makes it easier, as well as greatly increasing the scope of government, requiring regulation of marriage and more. Economically, the 'progressive' income tax is completely unjustifiable, as the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods. Your idea of borrowing money by way of government securities is not a long term solution, because interest gradually becomes an increasingly large part of the budget. In the long term, interest will either gradually take over the entire government budget, or an interest rate increase will force the government to default; in either case, borrowing to finance regular spending will eventually fail as a policy. The 'inflation argument' against welfare policies is flawed as you point out, because it has never been demonstrated that wage increases cause inflation (so called "demand-pull inflation"). Whether or not some type of government welfare program should exist is an interesting question, and your answer seems to presuppose that the counter-factual is that there would be no social assistance program at all, whereas I would think that private charities would do a better job than the government, while avoiding coercion. If you require a government welfare program, I agree with you that a negative income tax is probably the least harmful, as it does not encourage unemployment.

bencpeters 13y ago
One argument I would make is a marginal utility one - the marginal utility of $ decreases dramatically at higher incomes, so even if you have a (comparatively) punishingly high tax rate on the rich, the amount that your tax is affecting their lives in real terms is lower due to the marginal utility of money at those incomes. I'm in the camp that it's reasonable to want at least some semblance of equality of outcome though, so this argument resonates with me in a way that it might not to someone who favors a more lassez-faire approach. This probably falls under your "moral need" umbrella. I don't agree with your statement about a progressive income tax being economically unjustifiable, especially in the economy that we find ourselves in at the moment (and, if secular stagnation proponents like Larry Summers and Paul Krugman are right, may be the structural norm these days). The current economy is strongly demand constrained, with plenty of money available for investment (corporate profits and cash holdings at record highs), but inadequate consumer demand to justify investments. From this perspective, a progressive transfer of wealth down the income scale makes a lot of sense economically because the poor are much more likely to actually spend that money than the rich are. There's also not much good evidence that high end tax rates affect macroeconomic growth as much as people claim - just in the US we've had tax rates all over the map over the past 100 years, and there's not much correlation with economic growth. We certainly haven't seen any miracles of economic growth for the economy as a whole since 1980 with the long running supply side, deregulation, and low tax experiment. If taxing the rich really has such a strong effect on economic growth and job creation, it's hard to see that in the data... Finally, interest on government debt only becomes a long-term problem if the rate is higher than the rate of growth. It's not clear to me that that has to be the case, but that's another discussion ;)

ahomescu1 13y ago

"Libertarian-socialist" sounds like a huge contradiction to me; you can be either one or the other, but they contradict each other. You're either for personal freedoms and individualism (i.e., libertarian), or for "the common good" (as most socialists claim to be).