Comment by ojarow | Hacker News Reader

Comment by ojarow | Hacker News Reader

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I agree it's certainly an inefficient process (universal payouts and taxing some back), but so is means-testing, especially if it's to be on a monthly basis. A monthly payout requires monthly means-testing, and we struggle enough to do so on an annual basis. Not to mention the administrative and bureaucratic apparatus required to handle the monthly testing and payouts, which would itself be a source of inefficiency, and introduce numerous opportunities for exploitation and cheating.

The relevant question for me, which I haven't seen explored in any rigorous fashion yet, is to compare the inefficiencies of the two. What are the actual costs of means-testing, and what are the actual costs of universal payouts that are partially taxed back?

In theory, I don't see any obvious reason means-testing is less inefficient that universalizing.

(My personal hang-up is on the gross cost required for UBI relative to an NIT. Even with the same net effects, UBI's political feasibility is far less than NIT's given the disparity in tax revenues required)

>The relevant question for me, which I haven't seen explored in any rigorous fashion yet, is to compare the inefficiencies of the two. What are the actual costs of means-testing, and what are the actual costs of universal payouts that are partially taxed back?

Well said! It'd be great to get something like this on the books. In general, however, taxation is politically unsavory and, primarily, taxes have varying surface areas based on states' laws, so any attempt at trying to coordinate the appropriate amount of taxation would be indirect at best.

In my view, the universal-payout-and-taxback is a tarpit with no harmonious resolve, and giving money to everyone devalues currency faster than need be. It duplicates effort, and that's something to be avoided, especially at a national level where one bit of duplication is multiplied three hundred million times. Any inefficiency introduced in universal-payout-and-taxback will be egregious in the aggregate.

To me it's equivalent to saying "yeah we could experiment with a little salt in the soup, but why not just pour in the whole box of salt and see if it dilutes well." It's not our luxury to play games with our one economy, or our one currency, because irrevocable changes are irrevocable.

I wonder if the Hoover Institution would be interested in doing a cost-assesment of this make-it-rain-and-tax-it-back versus tactical-delivery. Maybe I will try and make a model just on the scale of a city or state and extrapolate from there. In general, I see devaluation of the currency because the wealthy are getting more than they need, so buying power for the bottom 50% goes down, meaning they must spend more on commodities, so there is more concentration of wealth at the top, simply exacerbating things. In other words, even if the costs are technically recoverable on the national ledger, the sociological costs of a "Universal" payout are devastating.

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