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Well, they should have written
"Unconditional basic income is a new form of total social security for all citizens. It’s an unconditional monthly sum, taken from taxpayers and paid out to every citizen - rich or poor, old or young, employed or unemployed. "
http://en.wikipedia.org/wiki/Negative_income_tax
which indeed works out to be better than government sponsored programs.
Progressive taxation has nothing to do with it though, it's not required at all.
Also consider costs of living/housing etc. For example an unemployed programmer might be better off staying somewhere like SF where costs are higher because they are more likely to get a job there.
The risk would be that you ended up with low cost of living slum areas where the unemployed would congregate , separate from the productive economy.
The masses don't like taking care of themselves. Not even if they get 'free' money for that.
That seems to be a conclusion without any premises, woefully short on data and implicit but imprecise definitions of 'efficient', 'helpful' and 'welfare'.
Is this empirically proven somewhere? Or is that what its proponents are saying? Forgive me if I'm a little cynical when someone tells me an idea they support is a much better form of welfare than what we currently have but doesn't back it up with proof.
The point is would you rather have that money fed through an expensive, heavily bureaucratic and often corrupt means-tested welfare system, or would you rather just have it all distributed to everyone equally with nearly zero overhead and no means left for abuse or misuse.
I think the answer is obvious.
They want people to think either: 1- it will help me earn more (because I make less than the BI) 2- it won't change anything for me (because I already make more than the BI)
But obviously, these two assertions can't be true at the same time.
Instead they should think either : 1- it won't change a thing 2- it won't change a thing (so why do it?)
OR
1- it will help me earn more 2- I will earn less so others can earn more
BI advocates say it is an important change. So they advocate for a tax raise, but they "forget" to say it.
No, there's not. At least, if there is, its not the one you claim.
> They want people to think either: 1- it will help me earn more (because I make less than the BI) 2- it won't change anything for me (because I already make more than the BI)
Who is "they"?
> But obviously, these two assertions can't be true at the same time.
They can both be true if the benefits plus (reduced) admin costs from BI come strictly from the benefits plus (higher) admin costs of the welfare programs it is replacing. (There are people who make less, in the short term, in that scheme, but its only some subset of the people who are making money from the admin costs of the replaced programs.)
They can't if you set BI at a level that requires more money than that, or if you do it without replacing any existing programs, but neither of those is inherent in the concept of BI (and the latter, at least, I've never seen proposed.)
The benefit of a basic income is that it changes incentives. In the existing system you lose government benefits if you take a job, so if the only job you can get pays low wages you have a significantly reduced incentive to seek employment. Higher unemployment means lower tax revenues, lower economic growth, etc. Fighting that is why a basic income is superior to means tested government assistance.
1: it won't change my income now, but will save me from having to jump through ridiculous, demeaning and counter-productive requirements added to the current welfare program in an attempt to punish "undeserving" receipients.
2: it won't change my income now, but will provide a nice safety net in case I become unemployed for any reason.
I want this.
As a very narrow and specific (and not necessarily the most important) example of this, in any nation which may rely on conscription and/or mobilization of volunteer citizen militias in time of need, a healthy and minimally secure citizenry is, among other public goods, directly related to military capacity.
People think government has some magical, limitless supply of money available to them, when in reality, it's mostly just money that's forcefully confiscated from everyone.
In other words, basic income is a zero-sum game, but not without its consequences. It's alright not to go into printing or loaning money here, both of those lead to ruin too.
How high would tax rates have to be, to collect enough money for basic income? How many businesses would just shut down or get the fuck out, leaving that much fewer businesses in the country to shoulder the burden? That's a feedback loop right there. The remaining businesses would be just that much more likely to get out too, and then the next remaining, and so on.
The idea of basic income is not rooted in reality, but entitlement and the need for "security", no matter how illusory it might be.
Is the idea to be "upwardly mobile" ? I mean I have to grasp for that idea.
For example, if 1 person in 10 is thirsty, what benefit derives from giving water to all 10 versus the 1 - isn't that simply a wasteful distribution of resources?
Even in the extreme case where a blind distribution of resource would save a life I cannot see it being superior to a distribution based on actual need.
On top of this, this idea has very weak economics fundamentals, there is no prove that growth comes from redistributing wealth. There is plenty of prove growth comes from innovation and innovation comes from people actually working.
We are in denial. The whole Europe is in denial. We don't realize the only way out of this mess is working more and cutting public spending. Instead we propose the exact opposite.
It's just a technical change in the way we redistribute wealth. Do you think that wealth redistribution is wrong? There are many arguments suggesting that zero wealth redistribution is not the optimum.
> there is no prove that growth comes from redistributing wealth
I'm convinced that wealth redistribution leads to higher aggregate utility. Whether it leads to higher nominal growth, I don't know.
> Instead we propose the exact opposite.
Basic income would make public spending more effective.
True wealth is discipline and knowledge. We should be figuring out how to teach people to reach for their dreams and also figure out how to sustain themselves (and others who share those dreams) through their work. Because truly outstanding things in this world are almost always rewarded.
I'll take Milton Friedman's word on that over yours.
Do you propose we just start shooting people who are below the skill level required for sustaining the economy?
I for one would like to avoid living in a Logan's run type of universe. Thank you very much...
Point is, it is always possible to take a means-tested system and turn it into a universal system without changing the final distribution.
Take your thirst example. Say nine people have 100 units of water and the tenth has 0. A means-tested welfare system might involve taking 5 units from each of the 9 people and giving it to the tenth, leaving the nine with 95 and the tenth with 45. Now, instead, we increase the 'tax' from 5% to 50%, and give everyone 45 units. The resultant distribution is the same (the nine have 95, the tenth has 45), but this way involves no means-testing.
OK, so the numbers here are a bit unrealistic, but the point is, given any means-tested system you can always make it universal and just make the tax system more progressive to cancel out the benefits paid to the non-needy.
Except if you are unemployed for more than X. Or if you have more than a minimal wage on your bank account. Or.. Or.. Or..
All these exceptions are meant to cut social support from people who are not entitled to it. While in reality they usually hurt people who have no means to be really productive.
Quite a lot of resources are spent on edge cases, which decreases efficiency and transparency. Thus making these schemes ineffective for what they were designed to do.
I think that basic income is an awesome idea and should be at least tried so we can see if it works out in practice. Especially because we can afford it.
You mean you can afford it. How do you know if I can afford it? By necessity, to implement this, you've got to take money from people and give it to other people.
Your assumption is that by rights any one in the category of those losing money, is making so much that they lack any moral claim to it.
I can't speak to what levels of taxation and basic income might be useful -- these ones have been selected for convenient math -- but that's the general idea of it.
Or, in terms of your water metaphor, if one person in ten is thirsty, we give water to all ten, but we also take from the nine, so they actually see a small loss. The water didn't come from nowhere.
That said, the system has a tendency to balance itself (the marvels of free-market capitalism when allowed to work properly) so no mater how much was granted per month, the system could self-adjust. Unfortunately there are so many entrenched interest gumming up the works these days, I'm not sure anything about the markets are really working "freely" as they should.
The net benefit of basic income for an individual tends to zero (percent) as the individual's income rises.
A bit more about myself : I'm self employed in France, and I earn less than the minimal wage (because I pay 46+% in taxes). But I'm not entitled to any unemployment benefit if I stop working. I would greatly benefit from a 1000€/m Basic Income, but I KNOW it's unfair because someone else will have to pay for it. I KNOW I have to work to earn a living.
We (almost) have Basic Income in France, it's called RSA (450€/m). That's why I'm paying 46+% taxes. That's social taxes, not income taxes (almost 50% of the population in France don't pay income taxes).
Suppose that yesterday you received $50 from government assistance programs (e.g. food assistance) but today you receive $50 as a basic income and no food assistance. You have the same amount of money to spend.
Suppose that yesterday you received no government assistance and paid no net taxes but today you receive $50 as a basic income and pay $50 in new taxes. You have the same amount of money to spend.
There will be some people who, on net, receive more or less from a basic income (less the taxes required to pay for it) than they do now -- mostly the very rich would pay more and the working class would receive more -- but the net amount of money in the average person's pocket remains the same. The difference is that you don't have the disincentive to seeking employment that the current unemployed do when they lose government assistance by taking a job.
EITC is a work incentive program that provides additional income tax credit with increasing labor income up to a certain amount -- the feature for which it is named as a tax credit for earned income -- and then tails off above a certain point. In the range from the peak to the tail off, it might be mistaken for a negative income tax, but that's true of any tax credit (or even, really, a tax deduction) that has a soft cap. But that's not really the basic design or function is, and, while the EITC may work fairly well, there's no good argument I can see that the negative-income-like portion of the top end of the EITC benefit curve is a contributor to its beneficial functioning, except perhaps if you consider it only against having a sharp cut-off where the benefit drops from the maximum to $0.
In terms of effectiveness at achieving the goals of welfare programs, it is far less clear, though there are pretty clear arguments that certain features of basic income -- particularly the lack of disincentives to outside income -- are beneficial in that regard. OTOH, there are also pretty clear arguments that the lack of need-based focus -- which is intimately tied to the lack of disincentives -- are potentially negative, especially when replacing welfare programs whose existing qualifications are based around special needs (e.g., programs qualified by particular disabilities) that increase costs rather than simple lack of resources (e.g., income/asset-qualified poverty support programs.)
You would get supporting evidence for each of a set of propositions, from which the efficiency (however that is operationalized in context) of the particular plan being proposed follows.
The whole point of the scientific method is that it allows us to have justifiable (even if not certain) evidence-based predictions of things that haven't been tried yet.
I didn't say anything that resembles that, no.
> reducing administration (or state) footprint is more libertarian than anything.
"Left wing" and "libertarian" are not opposed, and improving efficiency in achieiving left wing policy goals is not at all a view point incompatible with the left wing.
Heck, improving efficiency of government isn't incompatible with left or right wing, or libertarian or even authoritarian philosophies. Even authoritarian conservatives would probably prefer that, to the extent that liberal goals are going to be addressed by government at all, they ought to be addressed by the least wasteful means possible (if only so as to maximize resources available for authoritarian approaches to conservative goals.)
Throughout Europe we take 40-50% of personal income + taxing corporations to fund common good programs.
I will argue that we needn't take any more than we take currently. Expecting that taxes would drop because of BI is ludicrous. However less of our money may be wasted and more of the needy may be served.
You don't need to trust my word. Run some numbers[1].
[1]: https://googledrive.com/host/0B68HCFLtgK_QTHRGWGZBTkRNQjQ/UB...
> How high would tax rates have to be, to collect enough money for basic income?
They would need to be significantly higher, but significantly more money would get back to the taxpayers too, so the aggregate demand would remain about the same, so businesses would be ok.
BI, if set up properly, can redistribute wealth in a very similar way as it's happening today (in Europe). The only difference would be side effects like lower fear of unemployment, which could make the labor market much more liberal.
Really? Well, then you should understand that the feedback loop I described alone is enough to make BI unsustainable, and thus not worth pursuing. But it doesn't seem you do. There's another feedback loop too: the more people are just sitting at home, the more will want to join them, and so on.
From another comment of yours: >> Do you think that wealth redistribution is wrong?
Do you think it's wrong for a mafia to extort money from you? -Yes? Well then, do you think it's wrong for the government to do the exact same thing?
You see, you'd pay "protection money" under threat of violence, but you also pay taxes under threat of violence. Spare yourself the mental gymnastics here. Forcefully dragging you to jail or just plain shooting you if you resist does actually count as violence.
Where do you think the "wealth" to be "redistributed" comes from? -Why from extortion, of course. Would a mafia's extortion be perfectly fine as long as they used your money "efficiently"? Heck, their spending of your money increases aggregate demand, so all is well!
>> There are many arguments suggesting that zero wealth redistribution is not the optimum. >> I'm convinced that wealth redistribution leads to higher aggregate utility. Whether it leads to higher nominal growth, I don't know.
You throw around these terms as if they meant something here in the real world, let alone after acquiring the wealth to be distributed through blatantly immoral means. What makes zero redistribution of stolen loot "not optimal"? I'd say it's actually precisely the optimum.
"Higher aggregate utility", "aggregate demand"? -Well there's Keynes again. False voodoo economics meant to justify/rationalize State spending and taking on ever more massive debt loads until, of course, eventually the nation's extortion income is wholly consumed in paying interest and the house of cards falls down.
Does an economy imploding help the poor? Does currency debasement and inflation (ie. loss of purchasing power) help the poor? Why no, no they don't. Quite the contrary, but those two are what governments are causing with massive printing and borrowing and using money they don't actually have.
This was probably unclear, but I meant that people understand that goverment gets its money from the taxpayers.
> There's another feedback loop too: the more people are just sitting at home, the more will want to join them, and so on.
Perhaps, but I personally believe that this feedback loop is negligable.
> Do you think it's wrong for a mafia to extort money from you? -Yes? Well then, do you think it's wrong for the government to do the exact same thing?
It's definitely not the exact same thing, one of the differences is that it's what the society democratically decided. You can always move to a different country or convince people that they should vote for abandoning taxes.
> "Higher aggregate utility", "aggregate demand"? -Well there's Keynes again.
Higher aggregate utility is a term I created by myself (and I'm apparently not alone), it has nothing to do with Keynes.
> What makes zero redistribution of stolen loot "not optimal"? I'd say it's actually precisely the optimum.
1. Decreasing marginal utility of money. 2. Low income jobs are usually harder, less respected and less enjoyable. 3. Progressive taxes decrease inequality. This has many positive effects on society.
With BI, people will think "I don't want to work for 100/m" (you know, it's the gov that pays the other 1000/m). You'll hear people say "I'm paid 1000 just to breathe, why work for 100?".
It you want to limit this problem as much as possible, you'll need a basic income of exactly 0.
And it's a good thing: imagine the inflation rate if salaries were raised by up to 100% overnight...
This would seem to be the case regardless of the type of government assistance provided. Suppose we provide enough that a disabled person can live a dignified, if spartan, life. Should we deny that same level of support to someone else, who may be more able to contribute to society, just because that person is not disabled?
> Also consider costs of living/housing etc. For example an unemployed programmer might be better off staying somewhere like SF where costs are higher because they are more likely to get a job there.
That's the reason why the cost of living/housing is higher there. Increasing government subsidies in areas with higher costs cause the costs to increase even more, because recipients of government assistance then have that money with which to pay, increasing demand without increasing supply and therefore raising prices. Meanwhile only the poorest of the poor remain in the lower subsidized areas because they can't afford to live in more desirable areas even with some government assistance, causing those areas to degrade even more. This is the same logic that leads to the mortgage interest tax credit which benefits mortgage lenders much more than homeowners (and screws over renters even more) -- you're subsidizing the sellers of housing and loans more than the buyers because you're increasing the demand rather than the supply. If you want to help the poor live in San Francisco, subsidize the construction of affordable new high density housing and mass transit there, so that the cost goes down rather than up.
> The risk would be that you ended up with low cost of living slum areas where the unemployed would congregate, separate from the productive economy.
That's what happens already. If anything a basic income can disrupt such behavior, because it allows people living in poorer areas to take better risks, and provides them an increased incentive to seek employment because taking a job doesn't result in the discontinuation of government benefits.
A non-disabled person can walk or cycle around the city to pick-up groceries whereas a disabled person might need a specially modified vehicle or may require the services of another person. Subsidizing everyone to the same amount as required by the most disabled of people would be unsustainable.
I guess by the second point I mean the short term unemployed more than the "poor" per se. Consider a person who has just graduated from a university in SF and wants to remain there while they look for a job in SV. If they can't afford this , they might have to move to a poor area with less opportunity.
Optimistically it might produce more opportunities elsewhere if there is an influx of educated people, but pessimistically it might mean that those who are independently wealthy are the only ones who can take the risk of living in SF.
You're basically talking about the "heart transplant problem." Suppose you have zero dollars and no job and you need a heart transplant which will cost $200,000, which will cause you to live for another two years, or else you will die today. The government can't afford to pay for that -- people can say "death panels" all day long but the fact is that with the current state of medicine and technology we cannot save everyone, and it is not productive to bankrupt the government paying for measures that are more expensive than they are effective. Moreover, the fairest way to distribute government services is to give the same amount to everyone. If you need more than that amount, seek charity. There is a point past which government cannot fix every problem, and we can't calibrate society to the level of the "most disabled person."
> I guess by the second point I mean the short term unemployed more than the "poor" per se. Consider a person who has just graduated from a university in SF and wants to remain there while they look for a job in SV. If they can't afford this , they might have to move to a poor area with less opportunity.
So how is that different with a basic income than it is today?
Living in SF is a good, like a car or a degree. All of those things help you get a job, but it should be up to you which of those you choose to invest in. Throwing in cost-of-living adjustments is equivalent to a guaranteed income except that the government requires you to spend $X on housing - it's strictly worse for everyone.
But in this case, they would be able to offer each other money for providing each other services. Congregations of people would inherently be able to realize some demand, which is not presently the case (or that demand is filtered through bureaucrats).
I'm not really sure what you are saying here. My understanding of the favelas is that there is a great deal of economic activity going on there, and a lot of people working actively to better their situations. Limited resources coupled with sparse, unequally applied regulation and rule of law leads to some bad situations, but those in the favelas are living in the favelas primarily to have access to the economic activity of the city. Resources go to the favelas only in proportion to the earning power of the residents, which dynamic basic income specifically changes, and it is this change specifically that I am saying is likely to produce better results.
It's totally possible you were saying something I'm missing; if so, please clarify.
"It probably makes some sense to subsidize people to live in the area where there is currently the most opportunity for them."
Physical location matters, but it matters less than it ever has before. Ideally, we want more places with opportunity, not ever higher rents in SF and Manhattan.
The situation you describe in 2) is the status quo, no? UBI would mean more money for those who've been looking for a job for a long time.
The guy's point was that money has to come from somewhere, in this case, from taxpayers. The next step, then, is to think about the consequences of confiscating a massive amount of money more than before.
> Perhaps, but I personally believe that this feedback loop is negligable.
Your personal beliefs don't affect the way people behave: they pursue their personal gain. Business owners (ie. tax donkeys) will just fuck off if taxes get too onerous, and people will just stop working if it's just not worth it. Both feedback loops are very real, and will make any BI implementation unsustainable, and again, thus not worth pursuing.
> It's definitely not the exact same thing, one of the differences is that it's what the society democratically decided
You can't base any arguments on The People collectively deciding anything when the fact that taxation is extortion (or robbery) has never even crossed the mind of 99% of all people anywhere. Besides, only you can make decisions for yourself - no one else has the right to do that, because no one else is you. You own your own body, and your actions, and so does everyone else. We're all just individuals - not The Borg.
> Higher aggregate utility is a term I created by myself (and I'm apparently not alone)
Well, what do you think it means?
> 1. Decreasing marginal utility of money.
Does it actually decrease though? Clearly, if you want to eat an apple, the marginal utility of the next one is lower than the first's.
But if you first get 100 dollars, and then get 100 more, are the second 100 dollars less useful to you than the first? Well no, they're just as useful. Even past the point where the amount of money you have is not really meaningful wrt your everyday life anymore, each additional million dollars will increase your "security utility" just as much as the previous one.
So it's highly doubtful that money has decreasing marginal utility, and it's unclear where it might kick in. Maybe you'd like to explain what you mean, and why it's meaningful considering what we've just covered?
> 2. Low income jobs are usually harder, less respected and less enjoyable.
So what? Gain experience, and new skills, and get a better job?
> 3. Progressive taxes decrease inequality. This has many positive effects on society.
You're engaging in Socialist thinking. There's no class warfare (without the State, at least), and it's perfectly fine for anyone to get rich through pleasing their customers or just working hard etc.
You have your property, and others have theirs. That's it. You have no right to take anyone's stuff by force, and vice versa. This is important. Even police officers are just humans like you and me, and have the exact same rights as us.
When you want to help some industry, you'll give subventions to it. It should be no surprise that subventions to unemployment lead to more unemployment!
France (where I live) has a track record : we almost have basic income (it's called RSA http://en.wikipedia.org/wiki/Revenu_de_solidarit%C3%A9_activ...), unemployment rate is >10%, taxes are record high and growth is NaN.
Recently, I heard a lady (29 yo) tell me that her 1700€/m salary was not enough to compensate for the loss of social assistance. She decided to resign... but 1700€/m is the MEDIAN SALARY in France! 50% earn less than that!
In the UK for example we have disabled people who receive more in total government assistance than many able people would when working a full time job. For example they might need full time carers. Relying on charity will favor those who can best play that game, which will by definition make things harder for people with certain disabilities, particularly mental disabilities of less "popular" ones.
> So how is that different with a basic income than it is today?
If you give people different amounts of housing based on the relative costs of housing in different areas then they will not have to move to a different area and can stay where they are more likely to find work.
The problem is that they're not, because you're just picking some subset of the population and saying they're more needy than everyone else without actually providing any proof of that. Why aren't the victims of automobile collisions just as needy of that money so that they can buy more expensive safer vehicles? Why don't indigent cancer patients "need" the same level of care that Steve Jobs got?
You can pick some arbitrary subset of the population and say that we can afford to provide for them because they're a small percentage, but you can't pick that population in any just or rational way because everybody needs something -- everybody dies and would benefit if the government had given them more resources to fight the thing that killed them.
> Relying on charity will favor those who can best play that game, which will by definition make things harder for people with certain disabilities, particularly mental disabilities of less "popular" ones.
Charity is exactly as much a "game" as applying for government benefits is. If you feel for the plight of the mentally ill, by all means donate money to the charities that help those people, and join together with everyone who thinks the government should be helping them out of proportion to the rest of the population to do likewise.
The problem is that we have limited resources. We can't save everyone. And making emotional arguments gets in the way of doing the most good. Why is it better to spend money on nurses to change the bed pans of the mentally ill than to spend it giving opportunities to those who want to go to medical school, who may one day ultimately cure them?