How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.
$12k is the cited number that you see a lot in basic income discussions. That's just over the poverty level. That's not enough to live on and it's practically a bonus for some members of this site. It's not enough to do anything with. Even upon receiving that, many people would still work massive hours to obtain the best house on the block.
But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. As you stated, that IS the entire budget.
Now basic income advocates will say you can make up some if not most of that by cutting welfare programs, but given the nature of welfare programs - good luck. That UBI stipend is also not enough to pay for healthcare, so you can't cut that.
How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?
I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today. There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare reform is honestly about the last problem we'd need to discuss.
I was born in socialist country (Czechoslovakia) in the late 70s. It was inefficient system (the productivity of the most advanced economies today is about 3-4x times higher), and yet it was able to provide housing, food, health care, education and even decent culture for more than 90% of the population. And all this for about 30 hours of real work week.
So think about it, why is that? I think the social inequality is much larger than people are willing to admit, and much larger portion of it are mostly nonsensical expenses (rents, unneeded business travel, status displays..) due to requirements to maintain the social inequality.
My point was, any typical Western country can provide all basic necessities (actually lot more, 70s lifestyle in CS wasn't just basic) for its population (an excellent basic income) with maybe 30% GDP (because of the higher productivity) and 80% employment tops (more likely somewhat less). Surely, you can do better than Czechoslovakia in the 70s! So how come we can't find the money, if the resources (energy, labor, materials) are all there?
And if 30% GDP is spent on basic income, the remaining 70% can be subject to the capitalist competition. (That's my understanding of the UBI - we basically put aside a portion of GDP that we are not going to compete about in capitalism. It keeps the profit motive going but the poor people aren't starving or forced to work for non-livable wages.)
Economists just sometimes focus too much on money and lose sight of the real thing.
Hitting FPL is a good minimum for considering a UBI scheme “mature”, but 100% of the single-person-household FPL per capita is probably not the right starting point. If you target hitting 30% of the FPL in a two-person household—$2500/person-year—you’ll beat most state’s TANF benefits, which seems a good starting point; if you tie it to a funding stream that grows with the economy, you progressively improve the coverage letting you scale back and decommission existing benefit programs.
> Even upon receiving that, many people would still work massive hours to obtain the best house on the block.
As long as people can find work, people working on top of even a mature UBI is central to it's point, and the big reason it is unconditional is to encourage this.
probably not if
"tax the hell out of wealth"
... right?
In this regard a large tax greatly reduces purchasing power and makes it less worth the trouble.
The problem with taxing the wealthy, is that they generally have an outsized share of the political power. I think that a better solution, from a political and psychological standpoint, would involve a voluntary system. If just rent could be covered, this would be the equivalent of $12k per year in many parts of the US:
http://www.elledecor.com/life-culture/news/a7635/german-vill...
That German gated community you linked has housing that is owned by a trust. I don't think you can ask residents of the U.S. to voluntarily hand over all their housing property to a trust, or require them to be Catholic to reside in it.
However, I think it could be possible to have many, many such trusts which cater to specific interest groups. How about communities which cater to different kinds of artists, musicians, writers, philosophers, etc...? If something like 60% of the US population could be covered this way, it would combine many of the best aspects of universal coverage with the benefits of meritocracy and the advantages of a voluntary basis.
Sure. An artist commune shouldn't be letting you in unless you actually have some skill and artistic talent.
Meritocracies reward meritorious individuals, which is difficult to do when forcing everyone to live in communal housing. This isn't very well thought out.
You didn't try and prove the null hypothesis very hard, did you? There already exist intentional communities and artist colonies, where some degree of skill (merit) is a requirement. This is analogous to the German trust cited above, except the Catholicism requirement is replaced by some sort of merit-based interest.
By voluntary system you mean the wealthy voluntarily turning over the wealth that they won't let us tax them for? It doesn't make sense.
Many other cultures have a gift economy, where the powerful voluntarily redistribute their wealth in exchange for status. Culture is very powerful, often overpowering pure economics. Warren Buffet and Bill Gates have already pledged huge fractions of their wealth towards the common good. On the other hand, the historical record on politically forcing the wealthy to hand over their wealth also supports the notion of voluntarism. It's the society and culture which are the overarching influences. If we changed the culture such that trusts supporting intentional communities were the way the wealthy could have a meaningful impact and legacy, then we could conceivably house over half of the US in virtually free housing.
Arguably, living, thriving creative communities would be far more meaningful than plaques in a museum, park benches, and buildings on a college campus. (Colleges are over-funded and in a bubble as it is.)
We used to exist in a culture where women had no options outside of the home and black people were slaves.
Hand waving about voluntarism and a culture shift isn't going to fix anything. Tax the shit out of the rich and make them pay for it.
In order to tax the rich heavily, you still need a culture shift here in the US. Wherever such taxation works, there is already a thread of communal culture. In order to achieve the same in the US, you need a cultural shift, and not setting up to do that work and simply saying "tax the shit out of the rich" is the hand waving. You're using a slogan that exploits resentment, not setting up for real change.
No, to tax rich people you have to seize the damn money.
People who fund raise for non-profits convince the wealthy to part with their wealth all the time. If we changed society to make this the way to have a legacy as a rich person, then it would happen. Cultures around the world have convinced their wealthy and powerful to do far wackier things than endow an intentional community.
History shows us that the crazy thing to do is to try and force very smart people with lots of resources and power to do something they find distasteful. The same thing to do is to change how people think, feel, and behave, using historical models as precedents.
Schemes to tax the rich and powerful only succeed with the participation of the rich and powerful. That is what you are also saying, but your view is distorted because you are othering "the rich."
Now of course they do everything they can to avoid taxes, but very few evade them. I'm not so wealthy, but if I can legally avoid paying a tax, I will. That's more available for my retirement, charitable causes, and my family. I don't expect more from the wealthy than I do of myself.
> I don't expect more from the wealthy than I do of myself.
When you're not wealthy, you have strong needs for that extra money. So I definitely do expect more from the wealthy, in terms of dollar amount. In terms of impact on their life I'm asking for very little.
To force them, out of resentment, as if they are immoral villains or monsters. Do you take well to being treated as an immoral villain?
I wouldn't hold my breath.
This is exactly how successful museums operate. What would be so outlandish about changing the culture, such that intentional community trusts become the prominent way of showing a legacy? Hell, we already are basically doing this for wildlife. Why not do this for human beings?
Treating them as immoral villains and trying to take their wealth away will just make them hold onto it that much tighter. I'm just upper middle, but I feel the strain knowing CA is constantly trying to raise my taxes to cover increasing deficits / unfunded pensions.
And I don't think that's a false statement either.
Even if you did manage to tax all the wealth without destroying it, it'd only provide 10 or 20 years of basic income. Which is a lot, but it is hardly enough to make or break a BI as long term policy.
I think I'd be alright with UBI not being a long term policy if it meant radical wealth redistribution.
Easy to say when it's not your wealth being taxed.
So maybe $7000 can get you everything you need, including healthcare. People pay extra money for their house to be close to work. With no work, maybe that will open up places people will want to live.
As a person who was born in the USSR those kind of proclamations always amuse me. I am wondering how much taxes are being paid by those people thinking that 90% tax rate will not create a feedback loop that will drastically worsen living conditions for everyone. My personal ancodote is that when I check it turns out those people rarely pay any taxes at all.
I'm no UBI expert, but I don't think you understand the point of UBI: universal basic income. I would argue (again no expert here) it's more about constant economic injection, providing a baseline to reduce risk of entrepreneurship and generally providing a higher quality of life to the 99%'ers.
As far as paying for it or finding the right way to make it happen in the US, I agree that there are a ton of roadblocks. Right now welfare is at $1.3 trillion, let's say that was increased to $2 trillion; divide by 300 million Americans and you've got over $6,500 per American per year. Just over half of what you stated is the typical amount discussed. That being said, I could certainly find a good use for an extra $500+ a month in income.
> How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?
I think it's the politicians and the news media that twists this, Americans in polls generally do support single-payer health care and I would posit this same sentiment would be shared for basic income (if not more support since it's quite a bit easier to understand)
I'm happy to discuss the math with you any day of the week. One of the biggest misconceptions that many people have is that the basic income (or any government funding) must somehow be funded through taxes.
That's not how money works.
There's a limit to the amount of government spending that the economy can productively absorb and that amount has very little, if anything to do with the amount of tax revenue that the government collects.
> But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget.
If you try to do this using conventional budget math, you're not going to get the right answer.
> Now basic income advocates will say you can make up some if not most of that by cutting welfare programs
No. This is a terrible idea and it's due to the same misconception.
I agree with you that most basic income advocates don't understand the underlying economics. But the underlying economics are nevertheless sound.
> How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?
Yup. Politically, it would be very difficult to accomplish. That's why we have to do it ourselves.
> I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today.
If you're interested in digging deeper on how this could work, I'm working on an economics paper that describes the economics of a basic income.
Here's an abstract: https://drive.google.com/file/d/0B9KDLUTAOkduOXdNQWl3REw4eWc...
Email me if you're curious about reading the full thing.
> There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare reform is honestly about the last problem we'd need to discuss.
We've been undergoing this paradigm shift for centuries. It won't reach its full potential without a basic income to allow people to take full advantage of the wealth we're already capable of producing.
I'm very curious about this part, particularly in light of your comment elsewhere that "It's possible to implement basic income without any direct government support." I feel like there are very interesting answers being alluded to in your posts but none actually presented.
If you don't feel like clicking the link, I'm developing a USD-backed basic income system that does the equivalent of deficit spending to fund a basic income.
If you think that sounds crazy, then most people agree with you.
If you're interested in going deep on this stuff, I highly recommend this MOOC:
https://www.coursera.org/learn/money-banking
He doesn't talk about basic income, but this class really helped me understand the nature of money and economic policy.
If you're curious about more about the economics of a deficit-funded basic income, I'm working on a paper about that. Here's the abstract:
https://drive.google.com/file/d/0B9KDLUTAOkduOXdNQWl3REw4eWc...
Feel free to email me if you're interested in reading the full paper. It's over 50 pages long, but it's not very mathy and should (hopefully) be accessible to non-economists.
Wrong, utterly wrong, on accounts.
> It's not enough to do anything with.
You have no idea what it's like to be poor. I grew up poor in America. $12k per year is an absolutely life-changing amount for many people. It means you will not go hungry. It means you will not die of exposure. It gives you bargaining power at work: it means there are degradations you will not subject yourself to in order to earn more money.
> Even upon receiving that, many people would still work massive hours to obtain the best house on the block.
Yes, that's fine. UBI is not supposed to replace work.
> But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. As you stated, that IS the entire budget.
I'm sorry, I'm going to swear... please don't take this personally, but I've been talking hard numbers about UBI for years, and it's the anti-UBI people who can't do the fucking math.
Here's a math problem: You give me $1 and I give $1. How much did that cost you? NOTHING. -$1 + $1 = $0. That's how math works. Are you with me so far? Good, thank you, please stay with me.
The trick with Universal Basic Income is that it Universal. It is paid to everyone. That means everyone is both a contributor to it and a recipient of it. You can't add up the cost without also adding the benefit. Because it is a straightforward cash transfer, the National cost plus the total benefit would be zero. But of course what people are really interested in is how much it would cost them.
The per capita Gross National Income is $58,000. To extract $12,000 from that $58,000 would require a 20% tax rate. However, the person making $58,000 would also receive $12,000 per year in UBI. So they would pay $12k and receive $12k, making the total cost to them ZERO. That is how math works.
Of course the person earning earning $100k will also have to pay 20%, and they of course they would also receive $12,000 -- putting them -$20k + $12k = $8k out of pocket. So for everyone earning $100k, the cost of UBI is 8% of their net income. Actually -- because about a quarter of UBI could replace existing benefits programs, the tax increase would be closer to 8% * 75% = 6%.
So while it would notionally require a 20% tax increase (or 15%, if you account for the savings it would create), for the vast majority of Americans it would cost nothing, and for no American would it cast more than 20%. Here is how it would break down:
Income pre-UBI | Income post-UBI | cost/benefit | Tax increase | % of Americans at or below [1]
---------------|-----------------|--------------|--------------|---------------
$0 | $12,000 | + $12,000 | N/A |
$20,000 | $28,000 | + $8,000 | N/A | 35%
$40,000 | $44,000 | + $4,000 | N/A | 61%
$60,000 | $60,000 | N/A | N/A | 77%
$80,000 | $76,000 | - $4,000 | 5% (4%) | 86%
$100,000 | $92,000 | - $8,000 | 8% (6%) | 91%
$120,000 | $108,000 | - $12,000 | 10% (7.5%) | 93% (?)
THAT is how you finance a UBI. It's easy math.
1: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
It's no longer a Universal Income when someone who makes $120k contributes $12k... and then receives 0. That's just wealth redistribution.
Did you click the link in the post you're answering to? Among many other interesting things, it says: "Of those individuals with income who were older than 15 years of age, approximately 50% had incomes below $30,000 while the top 10% had incomes exceeding $95,000 a year in 2015." The source it gives is this, from the Bureau of Labor Statistics: https://www.bls.gov/news.release/pdf/wkyeng.pdf
You're right that there is regional variation, some of which you can explore at https://en.wikipedia.org/wiki/List_of_U.S._states_by_income and https://en.wikipedia.org/wiki/List_of_United_States_counties.... By no measure are you "pretty f'ing middle class" in CA or NY if you earn $100K a year.
(As for your request for proof by claimed authority, I used to live in the Bay Area. It's been about ten years since I left. I was doing fine on $60k back then. Maybe prices have doubled in the meantime.)
You could adjust it to take cost of living into account. You could adjust it to be slightly over 20% but let the first $200k be tax-free.
"just over the poverty level" is pretty much the definition of "enough to live on". If it isn't, the poverty level is set wrong.
Anyway, according to https://en.wikipedia.org/wiki/Personal_income_in_the_United_... 22.77% of the people in the US age 15+ (12.5 million persons) had an annual income of $12.5k or less.
> Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? Some of the concrete ways this could happen are through the transfer of existing federal assets like land, buildings and portions of the wireless spectrum into the new fund. Other measures could include increases in taxes on capital that affect mostly the wealthy such as estate, dividend and financial transaction taxes and the creation of a new type of corporate tax that requires companies to directly issue new shares to the social wealth fund on an annual basis and during certain corporate moves such as initial public offerings, mergers and acquisitions.
> Another way to bring assets into the fund would be to modify the way the Federal Reserve pumps money into the economy. Currently, the central bank does that by buying up Treasury bonds. If instead we used newly created money to buy up stocks that are then deposited into the social wealth fund, it would gradually socialize wealth ownership without the need to raise taxes on anyone. As Roger Farmer and Miles Kimball have argued, these kinds of asset purchases could also be ramped up during recessions, allowing the federal government to acquire significant portions of the national wealth relatively cheaply while also stabilizing financial markets and stimulating the economy."
Noah Smith makes the additional economic case that a social wealth fund is a buffer against decreasing labor share of income driven by technological change: https://www.bloomberg.com/view/articles/2017-12-05/robot-tak...
I'm not sure you can generalize Venezuela's collapse beyond a cautionary tale of corruption and populist looting; i.e., their economic problems are fundamentally political problems. A better comparison for a developed Western democracy with competent political system is Norway, which has an amazingly successful ($1 trillion) sovereign wealth fund https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor... comprised of oil revenue used to fund social programs.
The government doesn't face what we would think of as a typical budget constraint. There is a limit to how much money the government can spend, but that limit is determined by how much spending the productive economy can absorb without causing inflation or interest rates or taxes that are too high. It's the amount that closes the output gap without attempting to push past it.
The only way we can discover the appropriate amount of basic income by gradually ramping it up until further incremental increases no longer provide a benefit.
So net-net, it's only the bottom end of the income levels that keep the entire payment.
> How would a BI work
By increasing revenue, for one thing.
> Seems like BI would need big tax increases to become viable.
Yes, essentially no one, including BI proponents, disputes this.
That's an interesting point, especially concerning the US. My understanding is that many (not all) people join the US military mainly because they can't get other jobs or find other ways to finance college. With the UBI, this motivation will disappear, and with it a whole lot of military spending.
Because I've heard everything from what you're saying, to negative income tax, and to flat, unweighted income for everyone.
The trick with Universal Basic Income is that it Universal. It is paid to everyone. That means everyone is both a contributor to it and a recipient of it. So you can't add up the cost without also considering the benefit. If you give me ten dollars and I give you nine dollars, it doesn't mean that you're down by ten dollars. UBI must be looked at in this way. At a national level, it's just a straightforward cash transfer. The national cost plus the national benefit would simply be zero.
But of course what people are really interested in is how much it would cost them.
The per capita Gross National Income is $58,000. To extract a $12,000 UBI from that $58,000 -- via a simple individual flat-tax -- would require a 20% tax rate. However, the person making $58,000 would also receive $12,000 per year in UBI. So they would pay $12k and receive $12k, making the total cost to them zero.
Of course the person earning earning $100k will also have to pay 20%, and they of would only receive $12,000 back as UBI -- putting them -$20k + $12k = $8k out of pocket. So for everyone earning $100k, the cost of UBI is 8% of their net income. Actually -- because about a quarter of this UBI could replace existing benefits programs, the tax increase would be closer to 8% * 75% = 6%.
So although it would notionally require a 20% tax increase (or 15%, if you account for the savings it would create), for the vast majority of Americans it would cost nothing, and for no American would it cast more than 20%. Here is how it would break down:
Income pre-UBI | Income post-UBI | cost/benefit | Tax increase | % of Americans at or below [1]
---------------|-----------------|--------------|--------------|---------------
$0 | $12,000 | + $12,000 | N/A |
$20,000 | $28,000 | + $8,000 | N/A | 35%
$40,000 | $44,000 | + $4,000 | N/A | 61%
$60,000 | $60,000 | N/A | N/A | 77%
$80,000 | $76,000 | - $4,000 | 5% (4%) | 86%
$100,000 | $92,000 | - $8,000 | 8% (6%) | 91%
$120,000 | $108,000 | - $12,000 | 10% (7.5%) | 93% (?)
THAT is how you finance a UBI.
1: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
> US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with.
> How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.
The numbers haven't ever and will never add up, unless you just advocate straight-up jacking the taxes on the upper brackets sky-high.