In the U.S. there is one presidential candidate championing a UBI of $1000/mo. It would be paid for by a VAT tax.
Typically VAT tax is unpopular because it is regressive. But the UBI more than compensates for the extra tax burden.
Typically VAT tax is unpopular because it is regressive. But the UBI more than compensates for the extra tax burden.
Example:
Now:
$12,000 a year + $12,000 in benefits = $24,000
$50,000 a year + $0 in benefits = $50,000
UBI:
$12,000 a year + $12,000 in UBI = $24,000
$50,000 a year + $12,000 in UBI = $62,000
The poorer person receiving benefits is actually poorer then before, relatively.
Someone let me know if I'm missing something.
Second, the average benefit isn't $1,000 a month and in almost all cases the $1k per month is an increase on existing benefit numbers.
Third, since it doesn't come with strings, you don't have to worry about losing your benefits when you get a job or a kid leaves the home, when you relapse or when you get sick and can't manage the tangled web of government red tape.
This might be true for you personally, but it is not true in general; whether people are dissatisfied with their level of wealth/poverty has a great deal to do with how it compares to others.
It's perfectly possible to get by with rice and lentils and a few vegetables, and if that's the common lifestyle of everyone in the community/country, many people are well satisfied with it. I've lived in such places.
But if you see the people around you enjoying an endless variety of steak and sushi and lobster and so on, and you're working all hours yet still only able to stretch to rice & lentils, your satisfaction may be less.
An illogical reaction? Maybe. A human one? I think so.
Sure, but even people with benefits are struggling to get by. To not be poor absolutely we should be giving them $1000 a month on top of current benefits. Just $1000 a month will leave many absolutely poor. Also, I'm not an economist, but I don't think we can really predict what will happen with inflation, rent prices, etc, when the vast majority of people become $1000 richer. I find it hard to believe it won't cause increases in prices in at least some things. If that happens you aren't just poorer relatively.
> Second, the average benefit isn't $1,000 a month and in almost all cases the $1k per month is an increase on existing benefit numbers.
It doesn't really matter just changes the amounts a bit. Even if you assume benefits are $100 a month only, you still only gain $900 a month from the UBI(because you lose the $100). Everyone else is gaining $100 more then you.
> Third, since it doesn't come with strings, you don't have to worry about losing your benefits when you get a job or a kid leaves the home, when you relapse or when you get sick and can't manage the tangled web of government red tape.
Yeah fair enough, I'm not against UBI. I'm only against Yang's implementation. I think we should add it on top of existing benefits. I also think it is only a band-aid or should be a small part of the overall solution.
And many don't get it because they don't meet a threshold. And those who get it, have to not work (aka not make money), in order to keep getting it.
Now:
$12,000 a year + $12,000 in benefits = $24,000
$24,000 a year + $0 in benefits = $24,000
$50,000 a year + $0 in benefits = $50,000
UBI:
$12,000 a year + $12,000 in UBI = $24,000
$24,000 a year + $12,000 in benefits = $36,000
$50,000 a year + $12,000 in UBI = $62,000
Also keep in mind that the more well off people will end up paying more VAT because they spend more. VAT can also be tweaked to not tax on necessities like basic groceries/etc.
But even if not, I think there's a case that giving everyone else UBI has ancillary benefits:
- More cash in the hand of your neighbors means more customers, which means more economic activity, which potentially means better employment prospects, in a virtuous cycle [0].
- Strain on existing benefit-granting institutions is greatly reduced, as those who opt for cash exit the system, meaning faster response times and more assistance with forms/approvals/etc.
- The working class tend to be more economically interdependent by necessity; someone who declines UBI still comes ahead from a spouse, relative, grown child, etc. who requires less economic support.
- Yang has spoken at length about the effects of economic anxiety; even someone who declines UBI may experience less anxiety (and therefore greater executive function and capacity for long-term planning), simply from knowing they have a "Plan B" for basic necessities.
In addition to offsetting costs, I think one of the motivations for the "either/or" strategy is political viability with libertarians and moderate Republicans, whose exaggerated fears of "socialism" can be assuaged by the opportunity to shrink bloated federal bureaucracies. (I'm somewhat sympathetic here: the most efficient charity is usually to write a check to the poor [1], and I suspect UBI or negative income tax has greater efficacy than most means-tested federal programs, with possibly the exception of health care.)
$1000 poorer relative to other person but not actually poorer in terms of my purchasing power.
On net the only people who come off worse are unmarried individuals receiving ssdi who are too young for social security retirement income.
Average ssdi income is around 1200 10 million people are on ssdi aprox 6 million under 65 45% in the overall US population are unmarried.
One could reasonably suppose at least 2-3 million out of 327 million will make no more money and will see slightly to somewhat higher costs. This could be corrected by cola.
In comparison the bottom 25% is 82 million strong and will benefit substantially as will the next quartile to a lesser extent another 82 millions
The McDonalds cashier is likely getting subsidized housing and food stamp benefits.
Yang's plan would require that the cashier has to choose between the "UBI" or her existing benefits.
I asked his campaign why they designed it this way and they did not have an answer, I was told to ask the candidate directly, which was disappointing.
I'm neutral on Yang's campaign, but I like the idea of a UBI because administering it will be much cheaper than running existing benefits. Means-testing has a real and very sizeable cost.
What will happen to all the guvment workers who will get laid off once existing benefits have been supplanted by the UBI? They will go home to merrily enjoy their new UBI checks.
Which might be cheaper for the government than paying them to do their current jobs.
Cutting back existing benefit programs saves money in bureaucracy and empowers individuals to spend in ways that most benefit them.
Most people under the poverty line do not receive over $1k in means tested benefits.
Also, millions of Americans living in poverty receive no benefits at all.[1]
[1] https://www.washingtonpost.com/business/economy/13-million-p...