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Comment by kingkawn | Hacker News Reader

I do not understand the logic of excluding people who already receive social support benefits like Medicaid, as they are the ones who would benefit the most

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Well I think you've identified the 'logic' exactly -- use UBI as a wedge to dismantle the welfare state.

...You think that the policy of "Give everyone 1000 USD per month" is designed to dismantle? the welfare state?

I also don't get how they can call it "Universal" when not everybody gets it.

I don’t either but I’ve heard the purpose of BI is to roll up every benefits into a single unconditional monetary compensation.

If so, sort of logical. Whether BI is right or logical is probably an another discussion.

Even Social Security?

First it's not happening. I can promise the moon, just elect me. But the idea is that everyone gets $xxx a month, and if you get SS you already have something.

Perhaps they intend UBI to be a substitute for existing benefits, rather than an add-on?

But they get affected by the taxes? So they'd be worse off than they are now?

The Medicaid income threshold is something like $1300/month. If you're earning that much, then the amount going on non-medical, non-food, non-rent stuff is probably under $500/month. Assuming you're currently paying sales tax on those purchases at ~7%, and this proposal increases that to 10%, you're paying an extra $15/month in tax.

(This was a quick calculation based on info from the internet, so I could be mistaken.)

BUT if you can buy medical insurance for less than $1000/month, then can you give up the Medicaid benefit and have the $1000 instead? If so, as long as medical insurance doesn't cost more than $985/month, you're better off with the higher tax and the $1000, than with the Medicaid benefit.

Also it's funded with a VAT, not an income tax, so it very strongly resembles a FairTax plan which is...strange.

Edit: "FairTax plan", not a "fair tax plan", apparently people on HN are less immediately familiar with the term than I expected.

Isn't VAT a regressive tax, since poor usually have to spend a lot larger percentage of their income than the wealthy? I thought that was generally considered less fair than a progressive tax?

Yes.

Agreed but fair is nuanced

Well...

The good thing with a VAT is that it's very simple and hard to evade. Income taxes that are progressive on paper can become anything but with enough accountants massaging your accounts.

But with a VAT, everyone just pays it. And those accountants can do productive work that benefits society.

I think the original comment should have been “sounds like a FairTax ( http://fairtax.org/ ) system.” The FairTax is a libertarian proposal for a national VAT or sales tax, but — to reduce the regressive effects of a sales tax — to send everybody a “pre-bate” (money equal to the tax a person would expect to pay for food, rent, etc.).

I don’t know if the California bill is actually based on the FairTax proposal, but it does have both components, even if it uses different names.

Yes, I was specifically talking about the FairTax scheme, which is a libertarian and oft-considered regressive tax scheme.

Hence my bafflement at it being pushed by a seemingly liberal-for-california state legislator.

I don't understand the logic of instead just providing a $12,000 California tax deduction or lowering CA sales tax. Moot to me, I left CA for Tennessee two years ago. I prefer to just save way more money by not paying any state income taxes.

I would assume it because the people who need it the most don’t pay any state income tax or spend enough on sales taxes.

You could do it through a tax credit however.

The tax credit however is paid out once a year. Regular monthly payment mayhelp budgeting and disincentivize impulsive large expenses.

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