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Means-testing is a wash on average, though: you keep the taxes of higher-income people lower, but then don't give them the cash payment. This works out better f

Means-testing is a wash on average, though: you keep the taxes of higher-income people lower, but then don't give them the cash payment. This works out better for very wealthy people (since tax rates are typically percentage-based, while the payout is a fixed number), but worse for lower-middle-class people, who get means-tested out of the payout but don't make enough to get much tax savings. There's some cross-over point where it's exactly a wash. Under the basic income system the idea is not to means-test it, because means-testing disincentivizes working (you lose your benefit once you make "too much" in other income), and instead just net it out with tax rates above a certain level. So at the crossover point you get a $10k BI but you pay $10k more taxes; below that you come out ahead, and above that you're behind. The current welfare system has the same general properties, but is much more bureaucratic and has more of a "cliff" where you lose the benefit, instead of it just slowly being eaten away by marginal tax rates.

harryh 13y ago
OK sure, but if you're going to that, and not eliminate (or reduce) any current gov't programs then you have to raise taxes. If you want't to give, say 10k to each american that's 3.1 Trillion dollars which is more than the US gov't raised in taxes last year. The math doesn't work.
- _delirium 13y ago
  Well, yeah, you'd raise taxes, to the point where it nets out on average. You raise everyone's taxes by $10k on average, and give everyone $10k. At the average income it's a wash. At the low end people were already getting welfare and not paying much in taxes, so it's a wash for them too. At the lower-middle-class to middle-class level it reduces the disincentive to work and makes people better off. The only people who really lose out are at the very top, people who make so much money that any percentage-based increase would swamp the fixed gains (which is why, I would guess, they oppose it).

harryh 13y ago

OK sure, but if you're going to that, and not eliminate (or reduce) any current gov't programs then you have to raise taxes. If you want't to give, say 10k to each american that's 3.1 Trillion dollars which is more than the US gov't raised in taxes last year. The math doesn't work.

_delirium 13y ago
Well, yeah, you'd raise taxes, to the point where it nets out on average. You raise everyone's taxes by $10k on average, and give everyone $10k. At the average income it's a wash. At the low end people were already getting welfare and not paying much in taxes, so it's a wash for them too. At the lower-middle-class to middle-class level it reduces the disincentive to work and makes people better off. The only people who really lose out are at the very top, people who make so much money that any percentage-based increase would swamp the fixed gains (which is why, I would guess, they oppose it).