$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US federal government.
Just something to keep in mind when discussing this topic.
Just something to keep in mind when discussing this topic.
For example, when McDonald's can automate half its staff, the other half can't provide labor at the minimum price to be worth while. UBI says give these people, those displaced from the labor force since they are no longer needed, tax money directly rather than going through government mediators in a piecemeal fashion like they do today. Of course McDonald's will have a higher tax burden to support these displaced workers.
Rather than McDonald's shouldering the burden by itself, the government acts as an insurance company. It takes in taxes and payout what is essentially an existence claim.
We already see corporations keeping massive amounts of capital overseas because of high tax rates. That money should and could be here in the USA.
People dont keep their trillions of dollars under the mattress. Its invested.
Tell that to Bernie and Trump supporters so they can all pipe down.
And it's not just New York. Take any major city. Better employee productivity balances the higher costs. Not always, so some companies relocate. But many stay.
It seems that some people have already solved the problem with dividends in companies they own part of.
For the sake of argument, think about businesses with razor thin margins like restaurants. In the presence of increased taxes, their margins significantly diminish, if not vanish, and it becomes increasingly unviable for the business to stay in business. Once they shutter their doors, the tax base and employment decreases. Extending the argument, consider other organizations that have a healthier margin and are growing and hiring. The presence of substantially increased taxation raises the costs of growth (re: hiring) and raises the costs of employing Americans and earning money in America which reduces their ability to compensate employees / develop new products etc. Yes, they might have the margin to pay the increased tax rate, but the tradeoff is they lose money that goes into R&D, increasing salaries, hiring more people, and other business activities we think are good and useful.
As a consumer, I'm also curious to know what this does to my cost of living. Prices will not stay static and if businesses are incurring higher costs to produce goods and services, those get reflected in price. Given wages aren't keeping pace with inflation, what will a sudden price shock do to the cost of living in the face of businesses adjusting prices to address the new taxes? This could take people who are getting by now and turn them into a new wave of impoverished as necessary goods and services increase in price or it could prevent UBI from achieving its goal because prices keep rising to offset the tax rate which puts goods and services outside what people can afford on UBI.
That's a big assumption. As long as there is demand in a free market, they will stay in business and prices will adjust accordingly.
Or not, since they might get more business from all these people who now have a minimum income. Also consider that the trend is for operational costs to go down with continued automation of the whole production chain.
Also to be clear, we're not talking about anything remotely like a free market.
So if you end up with less total profit than before, it sucks, but your control over the situation is far more variable than if you had to simply suck it up and plan to pay your $9.00/hr dishwasher at least $15/hr in three years.
Now people need more money to gain the same utility as they could have previously gained without basic income.
Why would people wash dishes if they didn't need to pay the bills?
Can they afford nice clothing to attract people they like?
Can they save up for college? For their kids?
Can they play the latest games? See the latest movies?
Do they enjoy cigarettes, alcohol, or other recreational drugs?
Do they like to eat out?
Do they want a higher standard of living when they "retire?"
Maybe no one wants to wash dishes (so buy a machine), but I imagine quite a lot of people actually enjoy being waiters, since you get to be directly helpful to a lot of people every day.
And now you're not afraid of being fired, you can even start to negotiate about the parts that suck. Obnoxious customers? Hey that restaurant down the street pays a bit less, but they're also willing to throw people out for being jerks. Maybe not going home upset once a month is worth a lot more to you than a new TV.
Things like this might not even cost the business very much, but they've never considered them because people take what they're given.
That's plainly false.
No one's going to wash dishes at Chain Restaurant #12 for 15 cents an hour, not even if the government is giving them $10,000/year. Infinite increase in their current effort for a 1% increase in annual income?
That's like the most pathologically slanted example of diminishing returns possible.
Labor, in the service industry, is already handled like a variable cost. If you expect a rush, you increase the number of people on the shift and if you don't, you schedule the bar minimum. If there's mismatch between staffing and projected work - and say schedule too many people for what turns out to be a dead shift - they get sent home. Changing the minimum wage from $9/hr to $15/hr reduces the number of people you can run per shift and keep your costs the same (assuming all other inputs continue to cost the same). I.E. It costs me $30/hr to keep two waiters when I could run 3 for $27/hr so I cut back one waiter per shift.
Where the business gets in trouble, in terms of survival, is the price of fixed inputs. They need to buy goods and services that will fluctuate in price and if the cost of doing business goes up due to higher fixed costs in the form of taxes, those costs will reverberate through the chain. The food supplier will raise prices, the restaurant will need to raise its prices to afford the food, which will impact their ability to attract customers which impacts their ability to derive revenue to pay the food supplier, their tax bill, and so forth.
Similarly, if businesses are having to charge higher prices and wages are depressed due to UBI + <other wage>, will people have the money to afford goods and services at the higher rate?
Make no mistake, basic minimum income would be a massive redistribution of wealth. I'm in favor of it, but let's not pretend we can pay for it by shuffling around some social safety net spending.
What's preventing me from having as many babies as I can knowing that they too will not have to work or find a job to be supported?
I know this won't work at scale, because I understand math.
Sincerely. Many people don't desire large families, if any, or are physically incapable of reproduction. So why pressure them to when others are perfectly willing to pick up the slack?
As seen in welfare states in Scandinavia or Germany, where almost no one works because of the unemployment benefits.
http://www.theatlantic.com/international/archive/2016/02/wel...
Take a look at mobile games. People do lots of things just to be 1 rung higher on an artificial competitive ladder (reset every month) about endlessly punching a "Battle" button. I think this idea that necessity has ever driven productivity (look around at your job) is a long running joke.
Which is not necessarily crazy -- I think that a basic income is an attractive idea, though I doubt the ability to implement it well. But just like we shouldn't pretend we could just shuffle some social safety net programs, we also shouldn't pretend that you could just tax the 1%.
Someone should do the math! Sure you could increase the top marginal rate, but where does that get you. Yes, the top 1% is very wealthy, but there aren't many of them.
I would bet you'd have to increase income taxes well down the income ladder, dipping down into what most people call the middle class. You simply can't avoid it, that's where all the money is.
Politicians are happy to talk about raising the taxes of the wealthy and to cut taxes to the middle class. However, in practice, this means a massive loss in tax revenue, so eventually the middle class taxes have to go back up, or cuts need to be made.
Tax wealth more and income less. WHAT?!?!?!! People say? Well that really fancy and expensive military we are paying for.. it's not just protecting your income. It's protecting your wealth. Pay your fair proportional share for security of your assets...
And that's not to mention that you're essentially taxing the same assets multiple times. The stock that, say, Zuckerberg owns was already taxed when he received it. You're asking to re-tax the same thing over and over and over again. This sort of taxing already exists (property tax & excise tax come to mind), but I'm not really sure what sort of gain you think would come of it.
No matter how you run the numbers, the money comes from the middle class.
I know, "just close the loopholes lol". Except that it's a battle of wits of nerds against a bureaucracy with every-bigger portions of the economy at stake, where every government victory is a longer, less transparent tax code.
Realistically, almost all of the revenue has to come from increasing personal income tax, probably mostly on the top 5% of earners, but realistically everyone would have to pay more. I haven't yet done the calculations, but it seems like we're talking double digit percentage increases.
[1] http://people.opposingviews.com/percent-irs-revenue-comes-ca... [2] http://www.americansfortaxfairness.org/tax-fairness-briefing...
Is there a risk here that the more vulnerable members of society will end up receiving less money?
http://www.amazon.com/The-Two-Income-Trap-Middle-Class-Paren...
As a side note, will a poor person who is unable to have a child be allowed to adopt and receive an increase in basic income, and will the adoption process by significantly more discriminating in who is allowed to adopt compared to who is allowed to have children?
1 http://www.infoplease.com/us/census/data/demographic.html 2 http://www.usgovernmentspending.com/year_spending_2016USbn_1...
With all the talk about QE and "helicopter money" over the past 8-9 years, I'm curious why very few have considering the merits of a basic income through inflation.
What if the central bank had a mechanism to fund special "basic income" accounts at banks on a yearly basis... These accounts would not be considered deposits but would rather be a special type of 0-interest loan that is not paid back and doesn't not count against each bank's fractional reserve requirements. Each citizen is able to open 1 of these accounts at a bank that meets the qualifications to participate in the program.
Is there any merit in a basic income through inflation? If we are going to inflate our money by through QE and throwing it out of a helicopter to banks, why not use the same principle and inflate our money by throwing it our a helicopter into the homes of citizens?
special "basic income" accounts
Which is interesting when you consider that you'd (presumably) be dissolving Social Security and Welfare in favor of UBI; Social Security is already 12.4%.
What's also fun with UBI is that you then get to assign a numeric value to how socialist your country currently is, eg, 22% socialist. (Personally I'd go for something closer to 30% socialist.)
These kinds of thing make that number start dropping pretty quick and are in the spirit of what basic income would look like. The raw number you gave isn't what anyone is proposing.
Figure it this way, if individuals had to pay the full tax load out of their paychecks that they actually do most would more than flinch.
Regardless, current subsidies to many people are higher than 10k so it would never be set there. People would get all sorts of up kicks for dependents and the like because politicians need to buy votes and punish dissenters.
So if we just consider the working population, how much does it cost? Can we then rid ourselves of some government agencies which are devoted to providing aid?
Very expensive, but doable in a world where our representatives weren't corrupt to the hilt.
Not sure what is an equitable solution for children, but giving the full amount per kid seems grossly unfair.
Why unfair? I sometimes get the impression that the mainstream culture values children at some degree lower than "human".
Just something to keep in mind.
We got to where we are not because of arcane technical procedures, we got to where we are because of the humans in the government. Pass UBI with the same humans in the same government and the same result will occur at speed.
It's universal. You can't extend it, it's universal. You could limit it, but then it's obviously not universal.
I'm not saying it's impossible, but by definition anything not universal is not Universal Basic Income.
UBI with means testing is known as the Guaranteed Minimum Income.