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Comment by yummyfajitas | Hacker News Reader

Back of the envelope calculation please - that will clarify your vague words and reveal many arithmetic errors (if such are present).

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"In 2013, the total Social Security expenditures were $1.3 trillion, 8.4% of the $16.3 trillion GNP (2013) and 37% of the Federal expenditures of $3.684 trillion" (Wikipedia). Medicare adds another half billion, rapidly increasing.

We could get between $6k and $7k annually per citizen by swapping those plans for a basic income. If children don't count, we could bump that to maybe $10k. Obviously, this change would need to be taken gradually to not cause too much disruption.

To hit that $20k number, we'd need to increase taxes. Increasing consumption taxes would be fair. Since the flat credits is very progressive, it's OK to pay for it with a regressive sales or value-added tax.

Why increase consumption taxes? Why add friction? Wouldn't it be better to tax the assets at rest -- real estate, property.

Aren't income taxes a logical fit here? You would still have graduated tax brackets, so you wouldn't have an enormous cliff once you started earning, but all tax brackets could be increased such that the middle class end up about the same, and the poor are better off. With the added efficiencies described by the parent comment, this should even be possible without reducing net income to those in the higher brackets, but it might be desirable to do that to some extent as well for greater redistribution.

It's arguably better to tax Ricardian rents - if you can.

To hit that $20k number, we'd need to increase taxes.

I'm glad we are in agreement that a BI will cost a lot more than the current targeted welfare state. (Or alternately will require a drastic cut in benefits for the current crop of non-workers.)

It costs more on a nominal basis but if implemented right nobody will have less money in their pocket even after taxes.

If you didn't earn any money before you will get what was spend on you before + the saved overhead (+ a lot of wasted time and hassle). If you made a lot of money before you will still get a free handout but you also have to pay higher taxes so in the end you should have about the same amount. Obviously it will not be exactly the same for everybody but that doesn't mean it will be less fair.

Besides the saved overhead another major advantage of a bi would be to streamline incentive. Currently it can happen that if you start earning money you will lose a lot of benefits. This can lead to an implicit tax rate of > 50% for very poor people and therefore disincentives work.

Numbers, please. And see my other comments on the disincentive to work - in the pilot projects, BI was a massive work disincentive.

Thanks for hammering this nail yummyfajitas.

I'm completely open to the idea of basic incomes but it seems that if it is possible, it should be easy enough to demonstrate the basic outline. This isn't something that can be discussed without arithmetic.

Excluding dynamic effects (more/fewer people will work), political necessities (program X must be excluded from the chopping block) is OK for a start. Picking and choosing countries is OK for a start.

The first question I would like to see answered is how much it would cost to bring every net recipient's income up to par with the biggest recipients'. Presumably the basic income needs to be set somewhere near this line or we'll have a situation where many current recipients are worse off.

Notice that work disincentive is a plus, not a minus, when there are millions of unemployed people.

Exactly how is it a plus? The goal isn't to make a nominal "unemployment" statistic go down; it's to create valuable things. Your comment makes me think "a receding tide lifts all boats".

People will create what they want to create. For some people growing a nice garden and working on cool stuff around their cheap house will mean more than creating something "more valuable" to society at large. Creation of value or productivity should not be the standard we measure societies by, but instead equity and happiness.

The market doesn't capture and represent all value created by labor. When I call a tow truck to jump start my car, that transaction is captured by the market, but when I call my friend with cables to do the same thing, it is not represented in the GDP. The same thing goes for a lot of "work" that is not done for compensation but adds a great deal of value to community. Basic income recognizes this fact that merely existing as part of a community you are providing some basic value even if you're not paid for that work. I think the critics are right that there are potential cultural problems around entitlement and an unwillingness to contribute in any form, but I'm more optimistic about human nature.

Not at all

http://en.wikipedia.org/wiki/Mincome

In this Canadian experiment [1], initial results indicated some disincentives, but a lot of data was not analyzed, until many years later. Some of the surprising results include a reduction in medical costs.

[1] http://www.dominionpaper.ca/articles/4100

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