OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 49 minutes ago, Free Northman Reborn said: One This weakens the incentive to get off your ass and better yourself. Even if fear of homelessness is what motivates someone to go and become a waiter or construction worker, that is better for society than having millions sitting at home watching TV while earning a government freebie. Two It will put upward pressure on the wages for menial jobs, reducing the deserved premium that more highly educated people should earn compared to those who are less educated - and like in Australia will make the cost of a beer or a meal in a restaurant ridiculously expensive for a normal middle class person. There is a limited amount of evidence about how UBI will affect labor supply. There was small study done in Finland, if I recall correctly. It did not find any drop of labor supply among people who received the UBI. I should add, however, the monthly allotment was rather small being about 500 Euros per month. The results might be different if were talking about a much larger amount. One theoretical advantage is that the UBI doesn't have what is called an implicit tax rate that arises under other programs. For the record, I'm not completely sold on the UBI, being concerned with how such a program would be paid for, and whether such funds could be better targeted to the poor. But, I don't see a moderate or small UBI, causing a huge drop in labor supply, and large price increases. Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 39 minutes ago, Free Northman Reborn said: EDIT And four, even if all of the above were untrue, whats the point of paying everyone $2000 a month if the average cost of living then just increases by an average of $2000 due to the inflationary pressure of all this free cash being available? And as far as I know, most people (except maybe MMT theorist) aren't advocating for the Central Bank to just create money and pay people 2,000 per month. Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 2 hours ago, The Marquis de Leech said: I'm a UBI sceptic. I don't think people realise the sheer expense of the damn thing, in terms of providing every adult with however thousand per year - it would dwarf current social welfare expenditure, while going largely to people who don't actually need it. The majority of those adults are already paying taxes. So increase their tax rate the same amount as the UBI by shifting the tax brackets. Then you set the UBI level to be equal to the average of what welfare recipients receive, and viola, the change is financially neutral. Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 Any UBI program should be financially neutral in the long run. There are roughly about 200 million adults in the US. For a monthly payment of 500 dollars per month, back of envelope math comes out to about 1 trillion per year. Federal revenues were about 3.4 trillion in 2020. The amount of revenue that would have to raised would be significant. Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 5 minutes ago, OldGimletEye said: Any UBI program should be financially neutral in the long run. There are roughly about 200 million adults in the US. For a monthly payment of 500 dollars per month, back of envelope math comes out to about 1 trillion per year. Federal revenues were about 3.4 trillion in 2020. The amount of revenue that would have to raised would be significant. But why would that be even remotely difficult? Like I said, raise the taxes to exactly equal those $500, and you are there for the working part of the population. The tax agency wouldn't even need to collect the money, as the UBI could be deducted (and cancelled out) at the tax collection point. Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 5 minutes ago, dbergkvist said: But why would that be even remotely difficult? Like I said, raise the taxes to exactly equal those $500, and you are there for the working part of the population. The tax agency wouldn't even need to collect the money, as the UBI could be deducted (and cancelled out) at the tax collection point. Raising an additional 1 trillion dollars every year is a significant issue. I'm not saying it's not possible, but acting like it's a trivial issue is absurd. Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 Just now, OldGimletEye said: Raising an additional 1 trillion dollars is a significant issue. I'm not saying its possible, but acting like it's a non-trivial issue is absurd. You didn't even respond to my point. Did you even read beyond the first paragraph of my post? Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 Just now, dbergkvist said: You didn't even respond to my point. Did you even read beyond the first paragraph of my post? I found the point impenetrable. Was the point, we need collect taxes at 500 per person, on average? Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 4 minutes ago, OldGimletEye said: I found the point impenetrable. Was the point, we need collect taxes at 500 per person, on average? No, not on average, for every tax paying individual. Raise the tax rate by exactly $500 for everyone who is a net tax payer so that the UBI and the tax increase cancels out. And do this at the same time as the taxes are collected, so that no extra money is transferred in either direction. Link to comment Share on other sites More sharing options...
Larry of the Lawn Posted January 25, 2021 Share Posted January 25, 2021 1 hour ago, Free Northman Reborn said: One This weakens the incentive to get off your ass and better yourself. Even if fear of homelessness is what motivates someone to go and become a waiter or construction worker, that is better for society than having millions sitting at home watching TV while earning a government freebie.  Just want to say that the idea that the only reason people do anything productive is for survival money, and that people would simply become lazy and watch tv if you increased their standard of living a bit, is fucking insulting on a really basic level. This line of thinking makes me extremely angry and I will try to formulate a better response beyond "fuck this noise". It's all wrapped up in some weird protestant "work ethic" mumbo jumbo. Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 3 minutes ago, dbergkvist said: No, not on average. Raise the tax rate by exactly $500 so that the UBI and the tax increase cancels out. And do this at the same time as the taxes are collected, so that no extra money is transferred in either direction. You still have to decide several issues. What kind of tax? Income taxes? Consumption taxes? And then you have to decide how much. And if you want to get real advanced, you might run the taxes through a general equilibrium model to see how the taxes might affect the economy. Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 5 minutes ago, OldGimletEye said: You still have to decide several issues. What kind of tax? Income taxes? Consumption taxes? And then you have to decide how much. And if you want to get real advanced, you might run the taxes through a general equilibrium model to see how the taxes might affect the economy. Income tax, obviously. And I already told you how much: exactly the same amount as the UBI. If everyone receives and pays $500, the net effect is zero, as it cancels out. The part you need to worry about is whether the net welfare recipients would be better off from receiving a fixed sum or if the current system, where they get money based on need, is better for them, as they are the only ones who would actually be affected. Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 Just now, dbergkvist said: Income tax, obviously. And I already told you how much: exactly the same amount as the UBI. If everyone receives and pays $500, the net effect is zero, as it cancels out. The part you need to worry about is whether the net welfare recipients would be better off from receiving a fixed sum or if the current system would be better, as they are the only ones who would actually be affected. Okay, what new marginal rates do you propose? And why is it obvious that income taxes should finance a UBI? Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 3 minutes ago, OldGimletEye said: Okay, what new marginal rates do you propose? And why is it obvious that income taxes should finance a UBI? I have already explained this. The tax would be raised to exactly equal the UBI (by shifting tax brackets), so that the net tax paying part of the population would not be affected in any way. I.e. the top marginal tax rate would be exactly the same as it is today. How is this difficult to grasp? Â Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 6 minutes ago, dbergkvist said: I have already explained this. The tax would be raised to exactly equal the UBI, so that the net tax paying part of the population would not be affected in any way. I.e. the top marginal tax rate would be exactly the same as it is today. How is this difficult to grasp?  No you haven't. Your only taking in generalities. I'm not going to get behind something, until I know how taxes are going to be raised, who pays, and by what amount. The details are going to matter here. And if you think your going to do a UBI, finance it by income taxes, and not raise marginal rates, that is pure fantasy. The money is coming out of somebody's pocket. Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 2 minutes ago, OldGimletEye said: No you haven't. Your only taking in generalities. I'm not going to get behind something, until I know how taxes are going to be raised, who pays, and by what amount. The details are going to matter here. Don't act like I'm the one being the dumb ass here. Before the change: Person A is paying $1000 tax. Person B is paying $2000. Person C is paying $3000. After the change: Person A is paying $1500 tax and gets $500 back. Person B is paying $2500 and gets $500 back. Person C is paying $3500 and gets $500 back. All this paying back happens at the exact time as when the taxes are paid in, so in net, A only has to pay $1000 and so on. I'm not talking in generalities. This is exactly what I have said the whole time. Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 1 minute ago, dbergkvist said: Before the change: Person A is paying $1000 tax. Person B is paying $2000. Person C is paying $3000. After the change: Person A is paying $1500 tax, and get $500 back. Person B is paying $2500 and gets $500 back. Person C is paying $3500 and gets $500 back. I'm not talking in generalities. This is exactly what I have said the whole time. And how are A,B, or C made better off? Person A, B, C all pay the same amount of net taxes. Why would you pay somebody 500 dollars, then tax them an additional 500, then act like they are made better off? Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 3 minutes ago, OldGimletEye said: And how are A,B, or C made better off? Person A, B, C all pay the same amount of net taxes. Why would you pay somebody 500 dollars, then tax them an additional 500, then act like they are made better off? They are not supposed to be better off. This reform is about those who are net welfare recipients, not net tax payers. Link to comment Share on other sites More sharing options...
OldGimletEye Posted January 25, 2021 Share Posted January 25, 2021 2 minutes ago, dbergkvist said: They are not supposed to be better off. This reform is about those who are net welfare recipients, not net tax payers. This is also what I have said the whole time. So is your example, A pays 1500, doesn't get 500 back, and D gets the additional 500, without incurring any additional taxes? If that isn't the case, I'm having trouble seeing the point. Link to comment Share on other sites More sharing options...
dbergkvist Posted January 25, 2021 Share Posted January 25, 2021 1 minute ago, OldGimletEye said: So is your example, A pays 1500, doesn't get 500 back, and D gets the additional 500, without incurring any additional taxes? If that isn't the case, I'm having trouble seeing the point. No. A would indeed get the the 500 back. D (which I take it is unemployed or similar) is would lose his housing/unemployment benefits etc and instead get the 500. The point being that people don't like going to some government agency to beg and would prefer to just get a lump sum. (And that those government could then be closed). Link to comment Share on other sites More sharing options...
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