First it's both a simple welfare and tax system in one package. Basic income as typically understood is only half of the story.
It's also easier to reason about, the money flows are way more obvious, it's immediately clear whether you are a net contributor or receiver and it's easier to set the (few) parameters.
http://www.zerohedge.com/sites/default/files/images/user9218...
The full study examining this phenomenon is here: http://www.scribd.com/doc/273843288/Welfare-Report-Final
Yes, the cliff is definitely a problem with the current system.
It is the same thing.
NIC is generally tied to working. A part time employed person will make less than a full time one.
Under BI it is not tied to working. The incentives are worse.
Thats the difference.
Of course it depends on the model used, but generally NIC is applied based on how much you work. Generally a non-working person makes $0 , and a fully employed person makes the BI amount. To get the BI you need to work for it. That's the difference.
To take this argument any further we would need to compare specific models. But NIC and BI are not the same and have similar but different purposes.
Not according to Milton Friedman.
That is of course one valid way to implement it and is essentially BI in calculation.
Still even under miltons NIC, an important difference between NIC and BI is intended purpose. BI proponents want enough to live on with little hardship, NIC implies nothing in that regard and most NIC proponents I imagine would be opposed to that.
I would not be a proponent of BI for that important 'scalar' reason.
Also, this framing could also make a practical difference to the interface. If the benefit is administrated separately, you don't need to think about tax until you get a job. Having to submit a tax return to get your money is potentially intimidating, not to mention somewhat degrading if it says $0. With UBI, rich and poor alike get the cheque.
>BI proponents want enough to live on with little hardship
Certainly many do, but I feel this is more of an aspiration than a requirement. I think there are huge economic benefits that will come about from the stability and freedom that even a smaller UBI provides. In the longer term, complete sustenance may become trivial.
This can already be done easily with the right mindset. We do not need any more technical advancements to achieve this goal. Water is cheap. Agriculture technology is already amazing. Food can be as little as a few dollars a day if you buy cheap foods (beans, rice, bread, ect). Its possible to live rather well on $300 a month or $3600 a year if you live in the right location, and live within your means. Heck, most of the world already does this.
But the problem to living like this in in america is our wealth drives up the cost of certain inherently supply limited resources. The biggest ones being those resources which are tied to land. And the biggest example being shelter.
Shelter prices are mainly determined by people 'one upping' each other. Competing with each other.
Given these obstacles, the biggest beneficiary of UBI may not be the common person, but land owners.
Building skyscrapers is a great partial solution to the problem, but resistance is everywhere.
If the latter, I wholeheartedly disagree. Normal taxes would remain, the only difference is that you get BI as well.
NIT is a counter-intuitive trick to achieve the same thing within a tax bracket framework. Maybe it's more elegant, but understanding it requires a comprehension of mathematical concepts that many people (especially on lower incomes) simply don't have.
Furthermore, why is it important to identify whether someone is a net contributor or receiver?
People respond to incentives, it's been proven time and time again. A negative income tax isn't the worst idea, but it has all the wrong incentives. The more money you earn, the less help you get. Which seems sensible on the surface but can lead to situations where people ask themselves "why should I even bother working a job I hate when I can get the same money without working?"
The advantage of basic income is that no matter what you do you still get that money. You're still incentivized to work because a life on basic income won't exactly be a life of luxury. In fact you might be more incentivized to work for several reasons. One because working will get you money you can spend on stuff you want, not just stuff you need to survive. This is significant from a quality of life aspect. Also, working will enable you to get ahead, instead of just being on a treadmill as so often happens today. You'll be able to have more choice where you work and how much, and you'll be able to set aside some of your time to pursue new careers.
I don't think people understand just how much potential and talent is being wasted and misused in our economy at present. Human beings aren't meant to be drones, that's not our calling. And it's an insult to the human race to imply that a significant portion of the population is somehow genetically fit for nothing other than menial labor. That's never been my observation. In the vast majority of people I've met there is almost always a depth and a potential that is not being tapped by the current economic system. And you see some of this coming out with new economic models enabled by the internet. More freelancing, more startups, more people engaging in their passion projects through crowd funding or what-have-you. More people learning new things and trying new things because the internet makes discovery of knowledge a lot easier. That's true of musicians, artists, inventors, and so many others.
I can only imagine the world we'd have if we could unlock that huge untapped potential.
> The advantage of basic income is that no matter what you do you still get that money
Only a minority of people would get money. Because if you get $10000 (basic income) and pay $20000 (taxes), you're not actually not getting money.
> A negative income tax isn't the worst idea, but it has all the wrong incentives. The more money you earn, the less help you get.
Well, obviously, this is also true for basic income. Most people with jobs would not get any help, they would give help. Welfare works by income redistribution. You take money from one part of the population and give it to another part.
As for incentives, that's the thing that NIT does right. It doesn't have the "lose welfare when you start to work" problem.
A big benefit of the basic income model is that there's really no room for lawyers, accountants, etc. to pervert the process. If everyone gets the same amount, there's no way to game it that I can see (now, I'm sure someone, somewhere will figure out a way to game it... that's what people do, but at least on the face of it it seems far less gameable than our current tax and welfare setup).
If it were made a part of the FairTax model (which would be easy to do, given that that model already requires cutting everyone a check), then gameability would take another huge hit.
Plus there are a lot of very good reasons for tax breaks (for example screen readers for the blind). So while I fully agree that a well engineered tax system would be a lot simpler than what we have now, I am not sure if a basic income should just be dealt with by taxation.
I agree, I think that the negative income tax could be a base system with a systematic way to give / tax more various groups of people or other modifications.
Disallowing people to vote, or giving some people more voting power, skews all politics in ways that are inherently hard to fix or even address. It creates a weirder incentive scheme for the government which already behaves oddly thanks to odd incentives. A plan that took voting power away from its beneficiaries would sow the seeds of its own undoing—if not in a single action than over hundreds of small amendments and exceptions. The end-game I'd expect is for most of the benefits of the plan to be chipped away, leaving only the changed voting rights.
That's really not the way to go.
If 51% can take all the money in a budget from others, everything collapses.
UBI is based on the premise that there are fewer and fewer jobs to be had which gives a proper salary.
So negative income tax under this premise makes no sense.
Negative income requires a system of control and so it's basically not very different than a normal conditional social wellfare system.
UBI is basically working on the premise that there wont be any jobs in the ned. That there wont' be any income to tax.
So it's not really equivalent to UBI as it's premise is that there will the number of available jobs just fluctuate but we will get more over time.