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This seems very different from basic income discussed today. What they essentially describe is an expanded need-based assistance program. US provides a tax cred

This seems very different from basic income discussed today. What they essentially describe is an expanded need-based assistance program. US provides a tax credit for very low income that essentially results in negative tax. The Swiss referendum called for unconditional payment. To me, the unconditional nature is the preserving factor that incentivizes people to earn more, while knowing they are protected. A needs based system results in fear of losing what little you have. Low income housing in extremely desirable areas works in similar manner and traps people, instead of incentivizing them to seek higher paid employment because that higher pay will make them not qualified for the subsidy, yet not able to afford the area.

bane 12y ago
Right, I personally find it exhausting how this experiment keeps getting raised up as the gold standard for basic income policy. Mincome is a terrible data point for basic income advocates. > A needs based system results in fear of losing what little you have. Low income housing in extremely desirable areas works in similar manner and traps people, instead of incentivizing them to seek higher paid employment because that higher pay will make them not qualified for the subsidy, yet not able to afford the area. Ding ding ding! Mincome is not much different than a restructured welfare program, not a basic income program. At best it's a Partial Basic Income scheme, which is more or less what we have as welfare/benefits today. Basic Income programs guarantee a minimum standard of living, which Mincome did not. Mincome guaranteed a below poverty level standard of living, which then required people to continue working. It's just like getting a few dollars per hour raise. If this happened for everybody in the economy, it'd just be called inflation and standards of living would remain about the same after adjustment. To put Mincome into perspective, the amount it paid is about what you get from Social Security (in the U.S.) without retirement savings or investment plans. Ask any retired person living on a fixed income of solely Social Security income how they get on. Island economics are poor predictors for global economic effects. And any workable UBI scheme has to assume two things: 1) Most of the workforce would drop out and enjoy the minimal, but completely free standard of living it affords them. 2) Labor (which provides the input capital for the UBI scheme) thus becomes punitive. Each person working is supporting multiple people who aren't. Rational actors won't do that (exacerbating #1 above), so to get anybody working, there has to be a forcing mechanism to get them into the labor pool.
- tbrake 12y ago
  Your first assumption is a needlessly pessimistic view of the quality/quantity of intrinsic motivation in most people. By the same token something like "most people would drop out and enjoy the freedom of pursuing their passions, working on what they enjoy and spurring smaller scale local economies etc" might be equally naively optimistic, but I don't think the truth is at either extreme.
  - jeffdavis 12y ago
    Is intrinsic motivation something everyone is born with? Or does it need to be learned and reinforced with positive outcomes? One potential problem is that people may never really develop an intrinsic motivation to work if they aren't given a push early on. Basic Income may eliminate that first push, which I think is crucial. Let's say you are 16. If you get a job, the expectations are low and your needs are low, so you take the first thing to come along. That puts you in a mild discomfort that encourages you to seek better opportunities as they come along, and you are likely to develop a strong intrinsically a motivated work ethic. With Basic Income, your needs are already met, so it's easy to rationalize it away and just say you'll get a job after you graduate from college. By then, the expectations are much higher and your needs are much higher, so you hold out for a better job that may never come because you have no experience. So, you just stay in your comfort zone forever.
    - Retra 12y ago
      >Is intrinsic motivation something everyone is born with? Or does it need to be learned and reinforced with positive outcomes? Um... If it needs to be reinforced, then it is extrinsic motivation. That's pretty much the definition of 'extrinsic'. >people may never really develop an intrinsic motivation to work What is 'work?' Aren't most people happy to sit around socializing? Aren't people happy to sit around posting their thoughts on online forums? Why isn't this work? It produces value. >So, you just stay in your comfort zone forever. I guess suffering is what makes life great, then? What is the goal here, if not to let people be comfortable forever? What is the point of having a discussion when you throw out the basic premise? I could make a very strong argument that regularly beating one's children is the best way to raise them, and rationalize all day long with statistics and claims about how reward and punishment are obvious common-sense drives for human behavior. But at the end of the day, it's those beaten children who make the world a worse place, so what good does it really do? If the goal is to have a world where children aren't being beaten, then surely beating children is not a reliable way to achieve that. So what is the problem your argument is trying to solve?
rapind 12y ago
The idea of unconditional payment is interesting, and I'm almost on board, but... 1. Is it tax free? If not then it's not equal right? 2. How do you avoid it simply translating into inflation / lower dollar? 3. Does it save money elsewhere to pay for itself, or are taxes increased?
- justincormack 12y ago
  Most suggestions involve increased taxes.
  - tempestn 12y ago
    Yes, although generally up to at least mid middle class, the basic income would offset the increased taxes, so you would end up with at least as much take-home. High-income earners would most likely end up paying more though. (I would argue that the societal benefits would be well worth it.)
- buttsex 12y ago
  Some money would be saved by eliminating the current welfare system and replacing it with UBI.
- dllthomas 12y ago
  Regarding 1, I'm not 100% clear on what you mean. Typically the money would not itself be taxed. It would offset taxes and, for those making enough money, could take the form of a tax credit. Hopefully that covers your question.
cheez 12y ago
I think Milton Friedman's series of videos had a nurse (?) who embodied this exact catch-22.
narrator 12y ago
If you count lost benefits, the working poor can have marginal tax rates in some instances over 100%. http://www.cnn.com/2013/02/08/opinion/mccaffery-marginal-tax-rates/ http://www.cnn.com/2013/02/08/opinion/mccaffery-marginal-tax...
dochtman 12y ago
See also this article from last year: https://decorrespondent.nl/541/Why-we-should-give-free-money-to-everyone/3967013963-322951ff https://decorrespondent.nl/541/Why-we-should-give-free-money...
mrbabbage 12y ago
Your point about housing is spot-on. I'm not sure I understand how an unconditional payment achieves any more desirable objectives than an EITC-style negative income tax. Under a negative income tax, a marginal increase in income still results in a marginal increase in take home pay; you can't get penalized by earning more, so the policy preserves the incentive for people to earn more. To me, this seems preferable to an unconditional payment because you're focusing all of the dispersed money on people who need it.
- hawkice 12y ago
  Or, to speak about economic efficiency: you are focusing money on people who will spend it. Doesn't do a lot of good to sit in a rich person's bank account, but if you get the money moving, that's job creation at it's most basic.
  - WalterBright 12y ago
    Money does not sit in a bank account, it gets loaned out to others and spent. That's why banks offer "free checking" and other incentives to give them money.
    - oldmanjay 12y ago
      you're wrong. rich people are assholes who swim in vaults of money like Scrooge McDuck. poor people are kind and noble and deserve everything they want because they want it. or so I'm gathering from all the class warfare stories today. not sure why that's happening though.
      - phaemon 12y ago
        I know. It's such a trial being rich. I wish it was somehow possible for someone wealthy to find their way into poverty, so they could enjoy the social prestige and admiration that is the birthright of the poor. Thank God there are noble folk - like your good self - who will stand up for the interests of those who need it least!
tolmasky 12y ago
One potential side effect of a minimum income is to make the U.S. (or any country implementing it), even more immigrant hostile. These programs usually only consider the effects in a vacuum, not with respect to much larger population that wants to get in. Either immigration needs to be restricted, or you have a "lower" non citizen class that doesn't get these benefits from the beginning (ironically perpetuating more inequality). Milton Friedman discussed this fundamental contention between welfare and free immigration, and it's coveted a little here: http://m.youtube.com/watch?v=3eyJIbSgdSE http://m.youtube.com/watch?v=3eyJIbSgdSE .
jimmaswell 12y ago
Would prices not rise so much that the constant factor of the basic income pretty much becomes the new 0?

bane 12y ago

Right, I personally find it exhausting how this experiment keeps getting raised up as the gold standard for basic income policy. Mincome is a terrible data point for basic income advocates. > A needs based system results in fear of losing what little you have. Low income housing in extremely desirable areas works in similar manner and traps people, instead of incentivizing them to seek higher paid employment because that higher pay will make them not qualified for the subsidy, yet not able to afford the area. Ding ding ding! Mincome is not much different than a restructured welfare program, not a basic income program. At best it's a Partial Basic Income scheme, which is more or less what we have as welfare/benefits today. Basic Income programs guarantee a minimum standard of living, which Mincome did not. Mincome guaranteed a below poverty level standard of living, which then required people to continue working. It's just like getting a few dollars per hour raise. If this happened for everybody in the economy, it'd just be called inflation and standards of living would remain about the same after adjustment. To put Mincome into perspective, the amount it paid is about what you get from Social Security (in the U.S.) without retirement savings or investment plans. Ask any retired person living on a fixed income of solely Social Security income how they get on. Island economics are poor predictors for global economic effects. And any workable UBI scheme has to assume two things: 1) Most of the workforce would drop out and enjoy the minimal, but completely free standard of living it affords them. 2) Labor (which provides the input capital for the UBI scheme) thus becomes punitive. Each person working is supporting multiple people who aren't. Rational actors won't do that (exacerbating #1 above), so to get anybody working, there has to be a forcing mechanism to get them into the labor pool.

tbrake 12y ago
Your first assumption is a needlessly pessimistic view of the quality/quantity of intrinsic motivation in most people. By the same token something like "most people would drop out and enjoy the freedom of pursuing their passions, working on what they enjoy and spurring smaller scale local economies etc" might be equally naively optimistic, but I don't think the truth is at either extreme.
- jeffdavis 12y ago
  Is intrinsic motivation something everyone is born with? Or does it need to be learned and reinforced with positive outcomes? One potential problem is that people may never really develop an intrinsic motivation to work if they aren't given a push early on. Basic Income may eliminate that first push, which I think is crucial. Let's say you are 16. If you get a job, the expectations are low and your needs are low, so you take the first thing to come along. That puts you in a mild discomfort that encourages you to seek better opportunities as they come along, and you are likely to develop a strong intrinsically a motivated work ethic. With Basic Income, your needs are already met, so it's easy to rationalize it away and just say you'll get a job after you graduate from college. By then, the expectations are much higher and your needs are much higher, so you hold out for a better job that may never come because you have no experience. So, you just stay in your comfort zone forever.
  - Retra 12y ago
    >Is intrinsic motivation something everyone is born with? Or does it need to be learned and reinforced with positive outcomes? Um... If it needs to be reinforced, then it is extrinsic motivation. That's pretty much the definition of 'extrinsic'. >people may never really develop an intrinsic motivation to work What is 'work?' Aren't most people happy to sit around socializing? Aren't people happy to sit around posting their thoughts on online forums? Why isn't this work? It produces value. >So, you just stay in your comfort zone forever. I guess suffering is what makes life great, then? What is the goal here, if not to let people be comfortable forever? What is the point of having a discussion when you throw out the basic premise? I could make a very strong argument that regularly beating one's children is the best way to raise them, and rationalize all day long with statistics and claims about how reward and punishment are obvious common-sense drives for human behavior. But at the end of the day, it's those beaten children who make the world a worse place, so what good does it really do? If the goal is to have a world where children aren't being beaten, then surely beating children is not a reliable way to achieve that. So what is the problem your argument is trying to solve?

rapind 12y ago

The idea of unconditional payment is interesting, and I'm almost on board, but... 1. Is it tax free? If not then it's not equal right? 2. How do you avoid it simply translating into inflation / lower dollar? 3. Does it save money elsewhere to pay for itself, or are taxes increased?

justincormack 12y ago
Most suggestions involve increased taxes.
- tempestn 12y ago
  Yes, although generally up to at least mid middle class, the basic income would offset the increased taxes, so you would end up with at least as much take-home. High-income earners would most likely end up paying more though. (I would argue that the societal benefits would be well worth it.)
buttsex 12y ago
Some money would be saved by eliminating the current welfare system and replacing it with UBI.
dllthomas 12y ago
Regarding 1, I'm not 100% clear on what you mean. Typically the money would not itself be taxed. It would offset taxes and, for those making enough money, could take the form of a tax credit. Hopefully that covers your question.

cheez 12y ago

I think Milton Friedman's series of videos had a nurse (?) who embodied this exact catch-22.

narrator 12y ago

If you count lost benefits, the working poor can have marginal tax rates in some instances over 100%. http://www.cnn.com/2013/02/08/opinion/mccaffery-marginal-tax-rates/ http://www.cnn.com/2013/02/08/opinion/mccaffery-marginal-tax...

dochtman 12y ago

See also this article from last year: https://decorrespondent.nl/541/Why-we-should-give-free-money-to-everyone/3967013963-322951ff https://decorrespondent.nl/541/Why-we-should-give-free-money...

mrbabbage 12y ago

Your point about housing is spot-on. I'm not sure I understand how an unconditional payment achieves any more desirable objectives than an EITC-style negative income tax. Under a negative income tax, a marginal increase in income still results in a marginal increase in take home pay; you can't get penalized by earning more, so the policy preserves the incentive for people to earn more. To me, this seems preferable to an unconditional payment because you're focusing all of the dispersed money on people who need it.

hawkice 12y ago
Or, to speak about economic efficiency: you are focusing money on people who will spend it. Doesn't do a lot of good to sit in a rich person's bank account, but if you get the money moving, that's job creation at it's most basic.
- WalterBright 12y ago
  Money does not sit in a bank account, it gets loaned out to others and spent. That's why banks offer "free checking" and other incentives to give them money.
  - oldmanjay 12y ago
    you're wrong. rich people are assholes who swim in vaults of money like Scrooge McDuck. poor people are kind and noble and deserve everything they want because they want it. or so I'm gathering from all the class warfare stories today. not sure why that's happening though.
    - phaemon 12y ago
      I know. It's such a trial being rich. I wish it was somehow possible for someone wealthy to find their way into poverty, so they could enjoy the social prestige and admiration that is the birthright of the poor. Thank God there are noble folk - like your good self - who will stand up for the interests of those who need it least!

tolmasky 12y ago

One potential side effect of a minimum income is to make the U.S. (or any country implementing it), even more immigrant hostile. These programs usually only consider the effects in a vacuum, not with respect to much larger population that wants to get in. Either immigration needs to be restricted, or you have a "lower" non citizen class that doesn't get these benefits from the beginning (ironically perpetuating more inequality). Milton Friedman discussed this fundamental contention between welfare and free immigration, and it's coveted a little here: http://m.youtube.com/watch?v=3eyJIbSgdSE http://m.youtube.com/watch?v=3eyJIbSgdSE .

jimmaswell 12y ago

Would prices not rise so much that the constant factor of the basic income pretty much becomes the new 0?