Comment by eru | Hacker News Reader

Comment by eru | Hacker News Reader

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What do you define to be 'truly livable'?

Let's have a look at Scandinavia or Germany. They have reasonably generous welfare systems, but they are means tested. So for the sake of argument, declare them to be 'truly livable'. Especially by global standards.

Now I claim, that you can get pretty much the same net payments (of means tested welfare - taxes) that these countries have today with a system of (UBI - taxes). Basically, at the moment both taxes and welfare are means tested; you could move to UBI by moving all the means testing from welfare to taxes.

Because net payments would be pretty much the same, all incentives would stay pretty much the same as today.

See also https://en.wikipedia.org/wiki/Negative_income_tax which is one way to implement something like a UBI.

Of course, if you want to go much beyond what Germany and Scandinavia are already paying, you'd need even higher taxes or a stranger economy.

Btw, per capita the US is one of the world leaders of social welfare spending. They spend more than France. (Mostly because while France spends a higher proportion of GDP, American GDP per capita is much higher.)

And Scandinavian or German systems are in pretty bad shape. Both hard to finance (see Denmark raising pension age to 70) and lots of people getting thrown out of the system for minuscule reasons (German pensioners collecting deposit bottles to make ends meet is not unheard of).

In euro style systems very few people receive welfare at a given time. Many people may receive it at some point in lifetime, but not at the same time. UBI would completely change the picture.

On top of that, salaries for basic jobs would need to get much higher to incentivize people to work. Thus UBI would have to be much higher as current welfare. Unless you expect citizens to live on UBI but keep services cheap with cheap migrant labor.

> On top of that, salaries for basic jobs would need to get much higher to incentivize people to work.

Not true. The 'B' in UBI means 'Basic'. UBI wil pay your rent, utilities, and food, but not much else. Now, there are some people that are willing to just exist on only the bare minimum, but that's a significant minority. The vast majority of people want more. There will be plenty of people willing to do minimum wage jobs to top-up their UBI so they can afford extras like holidays, nicer phones, meals out, etc...

The main difference would be that the security of UBI would give them more power to distch a job if they were being abused in some way, rather than being so desperate that even if their employer is abusing them they are forced to take it because they need the job to survive.

I feel like too much discussion on UBI is poisoned by the idea that the vast majority of people are bone idle and are willing to just sit at home doing nothing and just existing with the bare minumum required to live. It's just not true

It's not that the majority of people would prefer to be idle, but that right now we manage to make some really uncomfortable jobs pay very little. It's not that you'd not find people to, say, work concessions at the movie theater. It's that the pay for harvesting a whole lot of crops, or do roofing work, will not work out . It's the same reason few Americans do those jobs in the US already.

It would be good for those jobs to be paid more while people like CEOs make less.

A lot of jobs pay only „basic“ money. How do you make somebody do those jobs with UBI?

It would be 'basic' money in addition to your UBI money.

Then society still ends up paying 2x basic amount - both in UBI and salary. So price is much bigger. Now make it that much bigger across many jobs….

Yes, financing UBI can be a problem. Exact details depend on the exact design and amounts, and what level of taxation (and what kinds of taxes) you use to finance it.

It's not related to financing sources of UBI. If UBI provides „basic“ incomes and you pay „basic“ salary on top, society is now paying 2x „basic“ units.

No matter how you finance it, you can find other (better or worse) means to spend collected money.

The only thing that really matters are net payments (and marginal net payments, ie how many cents can you keep from the next gross dollar you earn). It doesn't really matter whether the effective marginal tax rate is made up of income tax or a phasing out of welfare benefits or a combination of both (and throw in some other taxes etc, too).

In the name of simplicity, you might want to have a single government agency that assesses your income and net worth. Instead of having both the tax people and the welfare agencies do that and duplicate work.

So instead of having welfare payments phase out, you could just increase marginal income taxes by the same amount, and end up with exactly the same net payment structure.

> Because net payments would be pretty much the same, all incentives would stay pretty much the same as today.

Nope, in Germany you are required to work. If you can't find a job, you still have to try (and prove that), you need to stay at home / be available (and notify the state about your vacation or you might be punished by receiving less welfare) and of course you have to use up all money or wealth you have and state, in written, that you have no other sources of wealth.

So UBI would absolutely change incentives here.

Good point!

Though in practice it's fairly easy to put in a token effort so your welfare won't be cut, but avoid actually getting hired.

But you are very right that the token effort is still effort.

> [...] and of course you have to use up all money or wealth you have and state, in written, that you have no other sources of wealth.

That is similar to taxing that money and wealth. But you are right.

The sell-possessions-before-welfare is very very different from taxing.

With taxes, even crazy high, you can still accumulate wealth. Taxes slow you down, but it’s still possible.

With net-worth-ceiling to receive welfare, you’re forced you cannot accumulate wealth on welfare. And your previous wealth is gone before you get to earn welfare.

Got a nice house and BMW and decided to slow it down and live on welfare? Or, more likely, work under table and collect welfare too? Good luck with that :)

> With taxes, even crazy high, you can still accumulate wealth. Taxes slow you down, but it’s still possible.

That's only true for income taxes, not for wealth taxes.

Even wealth taxes don’t force you to sell. But welfare with wealth threshold does.

> Even wealth taxes don’t force you to sell. But welfare with wealth threshold does.

How are you going to pay those wealth taxes? (Assuming you have no income.)

With a wealth tax, if you got no fresh incomes, you can sell some of your stuff to cover your taxes and restart.

Of course, same applies to welfare - you can only sell part of your stuff. But the caveat is you won't have access to welfare till you sell all of it AND spend the money you got.

Personally I like welfare-with-net-worth-threshold. Obviously it should not apply to unemployment insurance which is, well, insurance.

Unemployment insurance (and health insurance etc) should be split in two: the pure insurance component, and the solidarity component. The former can be handled by the private sector just fine, the latter can be done by governments.

> Personally I like welfare-with-net-worth-threshold.

The only thing that really matters are net payments (and marginal net payments, ie how many cents can you keep from the next gross dollar you earn). It doesn't really matter whether the effective marginal tax rate is made up of income tax or a phasing out of welfare benefits or a combination of both (and throw in some other taxes etc, too).

In the name of simplicity, you might want to have a single government agency that assesses your income and net worth. Instead of having both the tax people and the welfare agencies do that and duplicate work.

(Though ideally, we'd use forms of taxation like land value tax where the government doesn't need to assess your income nor net worth in the first place.)

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