Citizen's Wage

For the serious discussion of weighty matters and worldly issues. No off-topic posts allowed.

Moderators: Azrael, Moderators General, Prelates

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Tue Oct 24, 2017 3:01 am UTC

Pfhorrest wrote:You don't have to pay off the debt in order for income from investments to begin offsetting taxes. ...

I guess that's technically true, but they would still have to run a surplus long enough to have the principle to invest.

If we're just talking about a tax-funded CW/UBI, it's absolutely trivial to fund it in an entirely revenue-neutral way. Your analysis, like many of its kind, overlooks half of the picture: most of the people receiving the UBI are also paying for it through their taxes, such that only people making zero income keep the full amount, at a certain point the tax and UBI cancel out and it has a net zero effect on people at that threshold, and only people above that threshold end up actually paying anything in net to fund it, most of them only paying an insignificant amount, with only those with incomes significantly above that threshold paying any significant amount.

Say you want to give everyone a CW/UBI of 40% the mean personal income, which would be around $1.6k/mo right now, close to your $10/hr full time wage. (Exact figures here don't matter so long as the CW/UBI is less than 100% the mean personal income, so if these numbers aren't exactly accurate substitute whatever ones you want that make it accurate). If you levy a 40% per person flat tax to fund it that is automatically revenue neutral

It may be budget neutral, but adding a 40% tax is not revenue* neutral and is still a huge tax increase. Besides, isn't a CW/UBI supposed to replace some or all of the other welfare programs? Which ones do you propose we get rid of to fund it?

*revenue = money into the treasury.

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Tue Oct 24, 2017 3:21 am UTC

slinches wrote:
You don't have to pay off the debt in order for income from investments to begin offsetting taxes. ...

I guess that's technically true, but they would still have to run a surplus long enough to have the principle to invest.

That's true, but that's also easily accomplished (as far as designing a plan of action goes; getting legislators to implement anything at all will of course be very very hard) by redirecting funding from things that are overfunded into this instead. Our terribly inflated military budget is an obvious target (maybe scale down to only outspend the next two highest-funded militaries instead of the next eight?), but another thought I've long incubated in this vein is to redirect the corporate welfare budget into a corporate investment budget. Sure your business can get some cash from the government, but you have to issue new stock of equivalent value to it in exchange (which will then be resold on the market to buy a more diverse investment, of course).

It may be budget neutral, but adding a 40% tax is not revenue* neutral and is still a huge tax increase.

Not if you do the tax credit method I mentioned later on. If you handle it all through the tax system, you end up lowering most people's taxes (many of them at the bottom of the scale to negative values), and raising a minority of people's taxes (most of them by a relatively small amount, the few of them who can best afford it by a significant amount), with the two exactly cancelling out.

As a first step before implementing that, I would make tax refunds paid out in monthly installments, and taxes due after filing payable in monthly installments to be fair and symmetric. Even before implementing the UBI/CW, that would leave most people getting a small check from the government every month already. Adding the UBI/CW tax credit (and the tax to fund it) would just make that check larger for most people. I would start the system out with a very small percent figure (like 1%) and scale it up over time, to approach the change cautiously.

(Even if you don't use the tax credit method, the net effect is still the same, so the "huge tax increase" is entirely on paper; the vast majority of people are getting more money from the UBI/CW program than they're paying in taxes to fund it, so on the whole it's a benefit to them, not an additional burden).

Besides, isn't a CW/UBI supposed to replace some or all of the other welfare programs? Which ones do you propose we get rid of to fund it?

At the start I would keep the existing welfare programs on the books, but require that they count the UBI/CW as "income" for purposes of their means testing. Then as the UBI/CW increases, more and more people automatically fall off the rolls for those programs (as they begin to fail the means tests), and the funding for those programs can go down proportionally. Ideally you'd keep increasing the UBI/CW until all those programs can be shuttered. E.g. nobody needs Medicare anymore because everybody has an effective income (post-tax-and-UBI) sufficient to buy their own medical insurance.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Tue Oct 24, 2017 3:57 am UTC

That's about the least objectionable approach to it. But it still represents a huge increase in tax burden to those that actually pay much now.

I do okay, but I certainly wouldn't call myself rich. I make just into the six figures and your 40% additional income tax proposal would increase my net tax liability by over $20,000. That more than doubles my taxes!!! I wouldn't consider that only a tax increase "on paper". It'll affect the middle class and upper middle class severely.

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Tue Oct 24, 2017 4:48 am UTC

If my memory serves me, individuals making $100,000 a year were somewhere around the 95th percentile, so that would put you quite a bit above upper middle class as far as income statistics go. For households that would only be around the 75th percentile, because the average household is about two people large. That is consequently only about the mean income for a household, and so should see little to no net gain or loss if the calculation is done per-household (as it probably would be, since we do taxes that way already). And likewise you should see little to no net gain or loss if it's done per-person (as I would have it done) so long as you have another zero-income person in your household (a stay at home wife?) who would be getting the full tax credit themselves. If you're an average-sized two-person household and you both have incomes like that, or that money is all for you personally with no dependents in your household, then we're back to you being way up in the 95th percentile again.

In any case, whether those figures I'm recalling are correct or not, you'd only end up paying significantly much under my proposal if your income is significantly above the mean, which it sounds like you're saying it is, by around 200%. It sounds from your $20k additional tax figure that you're taking the mean personal income to be around $50k, and your personal income to be around $100k, which (if correct, which it sounds like to my memory) puts as much distance between you and the mean as there is between the mean and a destitute homeless person. As in, you could fully support a homeless person at the same standard of living as yourself, with that standard of living being the standard afforded by a mean income. Which I'll note is also about twice the median income, i.e. half the country lives on less than half of that standard, so you and your formerly-homeless buddy would still be living at twice the standard of a simple majority of the country. Which, not to be insensitive to your circumstances, does seem to justify you bearing a more significant share of the tax burden.

If you happen to live somewhere like the Bay Area that $100k is not much money to live off of because rents are ridiculously high, you'll be happy to know that I'm very sympathetic to that circumstance and vehemently against rental income (including interest which is just rent on money) because of it, and (though it's off of the present topic) I would have an ever-growing percent (eventually up to 100%) of what you spent on rent (or interest) credited back to you on your taxes as well, funded by a tax of the same percentage on rental (and interest) incomes, precisely to combat that problem.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Tue Oct 24, 2017 5:35 am UTC

Pfhorrest wrote:Which, not to be insensitive to your circumstances, does seem to justify you bearing a more significant share of the tax burden.

How nice of you to offer my income to others. Why do I not deserve to retain even half my income and be single? I have enough to afford a decent standard of living and save for retirement, but not much more. I would have to give up on saving and significantly downgrade my house, if your plan were to be put in place. Either that or find a wife? That's a pretty perverse incentive.

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Tue Oct 24, 2017 5:54 am UTC

slinches wrote:I have enough to afford a decent standard of living and save for retirement, but not much more. I would have to give up on saving and significantly downgrade my house, if your plan were to be put in place.

I'm trying not to be insensitive to your circumstances, in no small part because I myself am around that 75th percentile (of personal incomes) and still living in a trailer and desperately scrambling to not end up dying in the street when I'm old, so I know what it feels like to be statistically well-off but still struggling to make ends meet. But: what about the 95% of Americans even worse off than you, or the 75% of Americans even worse off than me? (Assuming these figures we're discussing are correct, and please let me know if you have better ones, which will then also change the effect of my proposal on you personally). You'd have to downgrade your house to... something still better than most of them currently have? Reduce your savings to... still more than most of them can currently put away? Is that really so awful, and if it is, how the hell is almost everybody living like that now?

Even if the percentage punched into my proposal was 100% (which I'd never want it to be), that would bring your income post-tax-and-UBI down to merely twice as much as the majority of the country currently live off of (i.e. around what I currently live off of). Which means either that must not be so terrible, or else if it is so terrible then that terribleness is afflicting the entire country and maybe we should do something about that. Or there's some separate factor that makes an income that would be luxurious by most people's standards unbearably low in your circumstances, in which case we should discuss what that is and how it can be fixed. (Like the rent thing I mentioned at the end of last post).
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Tue Oct 24, 2017 6:12 am UTC

I already pay a substantial portion of my income in taxes (over 30% all included, federal + state and local). Why is that not enough to cover what I owe to society?

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Tue Oct 24, 2017 7:02 am UTC

That is actually less than the mean per capita tax rate. The tax rate per capita is about 35% (I can't remember if that's all taxes or just Federal taxes by itself, but either way it's higher than your combined figure), so you're already paying less than if that was just distributed uniformly in a flat tax. I do think there are a lot of good questions to ask about why anyone at all has to pay for some of the things included in that like, again, our enormously overinflated military budget (which IIRC accounts for something like 50% of that, or about 17% of each person's income on average). But that's a separate question from how that tax burden (whatever it should be) should be distributed over the population, and you're (and I'm) presently not bearing the full brunt of our share of it, if "our share" is taken just to be a uniform distribution (flat tax). It's only progressive taxes that have reduced your (and my) tax burden to the level it's at now.

I'm not doing any kind of moral shaming of you "not paying your fair share to society" or anything like that; I don't think any of us morally owe taxes at all. This is just a consideration of how to fairly distribute a burden we are, for the moment, stuck with for practical reasons. In principle I think taxes are only a temporarily necessary evil: they are, at the base of it, essentially theft, but the only mechanism we currently have (the state) for preventing other theft and even greater evils depends entirely on them, so just doing away with them entirely unfortunately isn't on the table at the moment; it'd be penny wise but pound foolish. (The talk about a government investment fund that drew me into this thread in the first place is my goal for eventually doing away with them entirely, in the very long run).

So given that we can't do away with it entirely for now, the questions are just (1) what is worth employing this necessary evil for, and (2) how should the burden of it be distributed. Why 35% of our income collectively has to go to the government is part of that first question, that we're not discussing so far here (not much at least; the existing welfare programs that would shrivel away with an UBI would reduce that a lot; IIRC most of the other half of government spending, besides the military half, is mostly welfare programs). How to distribute the burden of it, given that it is whatever it is, is more what we're talking about.

Also FWIW, I've thus far neglected to specify that I'm imagining the existing taxes being applied to your post-UBI-and-UBI-tax income. So if you make $100k before taxes and mean income is $50k and we're funding an UBI of $20k through my scheme, then your effective income (after UBI and UBI tax) would be $80k, and then you would pay regular taxes on that $80k, which would be less than your current 30% because you'd be in a lower tax bracket, so your total effective tax rate would be somewhere under 44%, still leaving you with a take-home income more than twice what a majority of the country currently lives on, and we would basically solve all of poverty in the process and dramatically boost the economy with all that new consumer spending money, possibly boosting your income in the process too.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Tue Oct 24, 2017 8:32 am UTC

I said over 30% because that's what I could easily account for in my head. I'm sure its probably closer to 40%, but I don't have numbers to back that up right at hand.

By the way, the federal budget is primarily social welfare spending. Defense spending is only $600Billion, so even if we cut out all military budget items, we would still be spending about $3.3 Trillion with the majority going to social security, Medicare and Medicaid and the remaining for all other "discretionary" programs.

User avatar
Thesh
Made to Fuck Dinosaurs
Posts: 5497
Joined: Tue Jan 12, 2010 1:55 am UTC
Location: Colorado

Re: Citizen's Wage

Postby Thesh » Tue Oct 24, 2017 1:53 pm UTC

If you are going to have a UBI, why not just have a VAT on all business revenues, and eliminate taxes directly on wages entirely? It's much more efficient, and much easier to raise revenue.
Honesty replaced by greed, they gave us the reason to fight and bleed
They try to torch our faith and hope, spit at our presence and detest our goals

cphite
Posts: 1155
Joined: Wed Mar 30, 2011 5:27 pm UTC

Re: Citizen's Wage

Postby cphite » Tue Oct 24, 2017 7:54 pm UTC

Pfhorrest wrote:
slinches wrote:I have enough to afford a decent standard of living and save for retirement, but not much more. I would have to give up on saving and significantly downgrade my house, if your plan were to be put in place.

I'm trying not to be insensitive to your circumstances, in no small part because I myself am around that 75th percentile (of personal incomes) and still living in a trailer and desperately scrambling to not end up dying in the street when I'm old, so I know what it feels like to be statistically well-off but still struggling to make ends meet. But: what about the 95% of Americans even worse off than you, or the 75% of Americans even worse off than me? (Assuming these figures we're discussing are correct, and please let me know if you have better ones, which will then also change the effect of my proposal on you personally). You'd have to downgrade your house to... something still better than most of them currently have? Reduce your savings to... still more than most of them can currently put away? Is that really so awful, and if it is, how the hell is almost everybody living like that now?


National percentile is really not an adequate way of measuring this. You really have to go down to the county level for the numbers to be at all meaningful. Costs of living can very a lot between various places, even within the same state. Someone making $100,000 per year in Woodford County KY can probably afford a house, a nice car, and have plenty left over for savings... someone making that same amount in Falls Church VA might struggle just to keep an apartment. Asking the former to pay tens of thousands more in taxes might be feasible - asking the latter might make it impossible for them to make ends meet. And while it's true that individuals can downgrade; asking entire regions of people to downgrade would be a logistic nightmare and would cause immeasurable harm to those economies.

If you look at the national percentiles, 95% of the people are "worse off" than someone making $100,000 per year... but a lot of those people may actually be doing much better in terms of the lifestyle that they can afford, what they can put into savings, and so forth, simply because of where they live.

Even if the percentage punched into my proposal was 100% (which I'd never want it to be), that would bring your income post-tax-and-UBI down to merely twice as much as the majority of the country currently live off of (i.e. around what I currently live off of). Which means either that must not be so terrible, or else if it is so terrible then that terribleness is afflicting the entire country and maybe we should do something about that. Or there's some separate factor that makes an income that would be luxurious by most people's standards unbearably low in your circumstances, in which case we should discuss what that is and how it can be fixed. (Like the rent thing I mentioned at the end of last post).


We're talking about much higher taxes for an effort that will ultimately result in higher costs - which will be passed to consumers - and higher inflation. The end result will be people at the lower end of the income spectrum finding that they have even less spending power than they did before.

A better way is to improve support programs that are targeted towards people in need, and finding ways to reduce the costs of basic needs. A citizens wage is one of those things that sounds good on the surface, but falls apart the moment you actually start to look at the details.

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Tue Oct 24, 2017 9:10 pm UTC

cphite wrote:National percentile is really not an adequate way of measuring this. You really have to go down to the county level for the numbers to be at all meaningful. Costs of living can very a lot between various places, even within the same state. Someone making $100,000 per year in Woodford County KY can probably afford a house, a nice car, and have plenty left over for savings... someone making that same amount in Falls Church VA might struggle just to keep an apartment. Asking the former to pay tens of thousands more in taxes might be feasible - asking the latter might make it impossible for them to make ends meet. And while it's true that individuals can downgrade; asking entire regions of people to downgrade would be a logistic nightmare and would cause immeasurable harm to those economies.

As someone living in California making 75% more than most individuals in the country and still living in a trailer scrambling to not die in the streets when I'm old (as previously mentioned), I understand that very well. (I'm sick of people telling me that the solution to my financial difficulties is just to move somewhere thousands and thousands of miles away, abandoning my job and friends and family and my would-be-wife-if-we-could-afford-to-live-together. Okay, sure, but let the tens of millions of other people here who are even worse off than me go first then. Oh, relocating over two thirds of the most populous state isn't feasible? Well who'd've guessed it.) And I did mention the possibly that that is a factor for slinches that needs addressing separately, such as my take on rent. More generally than that specific issue, I elsewhere advocate that tax calculations be simplified in a way that makes your taxable income essentially equal to your change in wealth, so if you have a high nominal income but also high expenses, your effective income that gets taxed can actually be rather low.

I also advocate that basic income programs be nested on multiple tiers, so that people living in expensive places get a basic income from those places supplementing their federal basic income, specifically for the reasons you describe. What's enough to survive on in Bumfuck Nowhere will still leave you a homeless bum in other places.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
ucim
Posts: 5564
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: Citizen's Wage

Postby ucim » Tue Oct 24, 2017 9:41 pm UTC

Pfhorrest wrote:I elsewhere advocate that tax calculations be simplified in a way that makes your taxable income essentially equal to your change in wealth, so if you have a high nominal income but also high expenses, your effective income that gets taxed can actually be rather low.
We do that already, and it makes taxes immensely complicated. Life is complicated, and everyone's life is different. Tax simplification is great and all, but generally does not make taxes fairer; it just makes it easier to fill out the form.

And as to experiments being done now on the Universal Basic Income or Citizens' Wage, they seem to me to be far too small-scale to show the problem that I think would do it in. To wit, in these experiments, the overall economy is not altered by the UBI. This acts as a stabilizing force. But if the UBI were truly universal, the economy would float on it. That's where the problem lies. It's hidden inasmuch as the CW involves currency, which has no inherent value. The value, or buying power, of this currency depends on other people taking it in exchange... and so long as most of the world is not on a UBI, their propensity for accepting currency is unaltered by the experiment. Currency acts like a thing-of-value. But if this were really universal, and high enough to accomplish its stated goal, I would expect people's willingness to accept it in exchange for goods and labor would go down.

There's a hidden battery in the system, methinks. How would you test for this in a small scale experiment?

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Tue Oct 24, 2017 10:14 pm UTC

slinches wrote:By the way, the federal budget is primarily social welfare spending. Defense spending is only $600Billion, so even if we cut out all military budget items, we would still be spending about $3.3 Trillion with the majority going to social security, Medicare and Medicaid and the remaining for all other "discretionary" programs.

If these numbers are accurate, about 22 of those 35 percentage points currently taxed per capita on average are social welfare spending. For a back-of-the-envelope calculation (even though I know it wouldn't quite be as simple as this, with things like medicare and social security not being exactly means-tested), I googled the medicaid eligibility threshold and found it's close to $16k/year, which would mean that that 40% mean income UBI we've been discussing so far would put everyone above the eligibility threshold for that, so if all other social programs in that $3.3 trillion you quote have similar eligibility thresholds, you can subtract about 22% from your tax rate as those programs all get shuttered, which means your effective tax rate goes down to about half of what we previously said it would be, from 48% to 26%.

ucim wrote:
Pfhorrest wrote:I elsewhere advocate that tax calculations be simplified in a way that makes your taxable income essentially equal to your change in wealth, so if you have a high nominal income but also high expenses, your effective income that gets taxed can actually be rather low.
We do that already, and it makes taxes immensely complicated. Life is complicated, and everyone's life is different. Tax simplification is great and all, but generally does not make taxes fairer; it just makes it easier to fill out the form.

We currently do deductions in an overly complicated way fraught with loopholes stuck in there by various special interests over the decades. There are all kinds of specific deductions for specific fractions of specific expenses up to specific limits, and all kinds of expenses that aren't deductible at all. My simplification is not to make filling out the forms easier but to close off all of those loopholes. In short: all income from anything besides sales of goods and capital, minus all expenses on anything besides the purchase of goods and capital, is your change in wealth (how much goods and capital, including but not limited to money, you have), and that's what gets taxed.

We're getting off topic for this thread now though if we go into those details: the point is just that if most of your money flows right through you and doesn't actually accumulate as wealth, I would not have your taxable income counted as high, so if for whatever reason slinches $100,000 income mostly just slips through his fingers and he barely gets to keep any of it, like he makes it sound, then I would not have him taxed as though he actually makes $100,000 in real net income, so my proposal would (if that is the case) not affect him as harshly as he fears.

There's a hidden battery in the system, methinks. How would you test for this in a small scale experiment?

That is part of why I would implement the system slowly. Start with a tiny 1% UBI funded by a tiny 1% tax, and slowly inch it up, and carefully observe how the overall economy reacts to the changes. If things start to go wrong in ways attributable to the UBI, then we can ratchet it back down again and see if that fixes it. If so, then we've established causation and can revisit the problem.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
ucim
Posts: 5564
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: Citizen's Wage

Postby ucim » Tue Oct 24, 2017 10:33 pm UTC

Pfhorrest wrote:
ucim wrote:There's a hidden battery in the system, methinks. How would you test for this in a small scale experiment?
That is part of why I would implement the system slowly....
Thing is, if you implement it slowly enough, you'll not know why the system isn't doing what you had hoped, but it will still do what somebody is hoping, and that person will be able to keep pushing it through. [Cue a global warming debate.] To be able to tell whether or not there's a hidden battery, and that that battery is what's causing the issue, you need a pretty clear parallel control group, and enough of a difference so that the effect would rise above the noise. Implementing it slowly guarantees that any effect is lost in the noise until politics takes over, and there will be endless fruitless discussions as to whether or not that was the problem, or even if there is a problem.

Pfhorrest wrote:...all income from anything besides sales of goods and capital...
Why are you excluding sales of goods and capital? I buy something for $5 and sell it for $10; that's sales of goods. It should count, no? And how do you account for inflation in this scene? I buy an ounce of gold for $1000 (which could buy me a lawnmower), in a few years sell it for $1500, and find that it still only buys me a lawnmower - the same one, whose price has risen to $1500. But I'm taxed on $500 so no longer can even buy the ch*rpin' thing.

Pfhorrest wrote:...loopholes stuck in there by various special interests over the decades...
Do you support financial incentives for (say) green power, to counter our dependence on energy that pollutes or destabilizes the world?

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Tue Oct 24, 2017 11:00 pm UTC

Pfhorrest wrote:
slinches wrote:By the way, the federal budget is primarily social welfare spending. Defense spending is only $600Billion, so even if we cut out all military budget items, we would still be spending about $3.3 Trillion with the majority going to social security, Medicare and Medicaid and the remaining for all other "discretionary" programs.

If these numbers are accurate, about 22 of those 35 percentage points currently taxed per capita on average are social welfare spending. For a back-of-the-envelope calculation (even though I know it wouldn't quite be as simple as this, with things like medicare and social security not being exactly means-tested), I googled the medicaid eligibility threshold and found it's close to $16k/year, which would mean that that 40% mean income UBI we've been discussing so far would put everyone above the eligibility threshold for that, so if all other social programs in that $3.3 trillion you quote have similar eligibility thresholds, you can subtract about 22% from your tax rate as those programs all get shuttered, which means your effective tax rate goes down to about half of what we previously said it would be, from 48% to 26%.

I got them from https://en.wikipedia.org/wiki/United_States_federal_budget, so you be the judge on their accuracy.

UBI seems like it could be effective as a replacement for social security, so that may be able to be phased out eventually. But I don't see how you can say the UBI supplants medicaid and other need based programs. The UBI may be large enough to say that even the poorest isn't "eligible", but if someone foolishly spends all of their UBI income on other stuff rather than insurance and maintaining savings and then gets sick and goes to the emergency room, what happens? They don't have the money to cover their medical costs, so do hospitals turn such people away? If not, then who pays for their care? Same question applies for housing programs and food stamps and all of the other need-based programs.

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Tue Oct 24, 2017 11:14 pm UTC

ucim wrote:Implementing it slowly guarantees that any effect is lost in the noise until politics takes over, and there will be endless fruitless discussions as to whether or not that was the problem, or even if there is a problem.

If any problems are so small as for it to be uncertain that they're even there, how can they be big enough problems to be worth worrying about?

Why are you excluding sales of goods and capital?

Because we're trying to measure change in wealth, and buying or selling goods or capital is just converting wealth from one form to another. If the exchange rates between those forms of wealth change between conversions, so be it.

I buy an ounce of gold for $1000 (which could buy me a lawnmower), in a few years sell it for $1500, and find that it still only buys me a lawnmower - the same one, whose price has risen to $1500. But I'm taxed on $500 so no longer can even buy the ch*rpin' thing.

Not under my proposal, for exactly this kind of reason. You convert 1000 dollars into 1oz gold, which have the same value as each other and as a lawnmower at that time, so you've neither gained nor lost any wealth and I wouldn't have you taxed for that. Later you convert 1oz of gold into 1500 dollars, which have the same value as each other and also as a lawnmower at that time, so you've neither gained nor lost any wealth and I wouldn't have you taxed for that. So now you have $1500 and can buy that $1500 lawnmower with it, just like you could have spent the $1000 before to buy the same lawnmower back then. Because you haven't gained or lost any wealth in the process.

Do you support financial incentives for (say) green power, to counter our dependence on energy that pollutes or destabilizes the world?

I don't think that's the kind of thing that should be handled by the tax system. If we want to fund green power (which, compared to many other things we already fund, sounds like a decent priority to me), we should just fund it, through some program that gives people money to implement it. I also don't like "sin taxes"; if we're going to charge people money for doing bad things, make a law against the bad thing and attach a fine to it.

slinches wrote:UBI seems like it could be effective as a replacement for social security, so that may be able to be phased out eventually. But I don't see how you can say the UBI supplants medicaid and other need based programs. The UBI may be large enough to say that even the poorest isn't "eligible", but if someone foolishly spends all of their UBI income on other stuff rather than insurance and maintaining savings and then gets sick and goes to the emergency room, what happens? They don't have the money to cover their medical costs, so do hospitals turn such people away? If not, then who pays for their care? Same question applies for housing programs and food stamps and all of the other need-based programs.

For food and housing and so on, if people choose to starve or freeze when we're giving them the means not to, that's up to them. Maybe next month they will choose differently after experiencing the consequences. For medical expenses that is a better point, because you can't just realize you ought to start buying health insurance after you've already suffered a medical catastrophe, but perhaps some kind of program could be developed such that, if you incur huge expenses that you've failed to insure yourself against (medical or otherwise), those will be covered by said program and a portion of your UBI (comparable to the insurance you should have been buying anyway) will be garnished to fund that.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
ucim
Posts: 5564
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: Citizen's Wage

Postby ucim » Wed Oct 25, 2017 2:20 am UTC

Pfhorrest wrote:Because we're trying to measure change in wealth, and buying or selling goods or capital is just converting wealth from one form to another.
So the retail store whose entire business is to buy for $5 and sell for $10 all year ends up with no taxable income?

Pfhorrest wrote:You convert 1000 dollars into 1oz gold, which have the same value as each other and as a lawnmower at that time, so you've neither gained nor lost any wealth and I wouldn't have you taxed for that. Later you convert 1oz of gold into 1500 dollars, which have the same value as each other and also as a lawnmower at that time, so you've neither gained nor lost any wealth and I wouldn't have you taxed for that.
But the computer that cost $1000 now costs $600, and the milk that costs $1000 (yeah, I'm thirsty!) costs $1350, and the painting I was going to buy for $1000 now can't be had for less than ten times that.

So instead of buying gold, I buy the painting, and sell it for $10000 after a few years. Now I buy the lawnmower, the computer, the milk (heck, the entire cow!), and still have money in the bank, tax free.

Kosher?

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

Chen
Posts: 5267
Joined: Fri Jul 25, 2008 6:53 pm UTC
Location: Montreal

Re: Citizen's Wage

Postby Chen » Wed Oct 25, 2017 1:42 pm UTC

Pfhorrest wrote:That is part of why I would implement the system slowly. Start with a tiny 1% UBI funded by a tiny 1% tax, and slowly inch it up, and carefully observe how the overall economy reacts to the changes. If things start to go wrong in ways attributable to the UBI, then we can ratchet it back down again and see if that fixes it. If so, then we've established causation and can revisit the problem.


At such a slow rate trying to distinguish any UBI effect from "normal" inflation" would be tough. The part of any UBI that I find hard to rationalize is you're basically giving "free" money to everyone. The ideal way to pay for it is extra taxes on the wealthy. The problem I see is that for essentials, like food, the prices can just freely rise to account for the higher spending power of people. Yes the wealthy have lost some tiny amount of spending power, but that's not going to affect their food purchases. Whereas the very poor now have a lot more money to spend, much of which will be on food or other essentials. How does this not just cause large inflation of prices for the essentials? Or maybe not even essentials but things that almost everyone has (phone plans, electicity etc). These are basically negligible expenses for the rich to begin with so a small increase there is not going to be felt. But the increase would remove most of the gain of the UBI from the people who actually need said UBI.

User avatar
Thesh
Made to Fuck Dinosaurs
Posts: 5497
Joined: Tue Jan 12, 2010 1:55 am UTC
Location: Colorado

Re: Citizen's Wage

Postby Thesh » Wed Oct 25, 2017 2:01 pm UTC

Since the total increase in cost of all goods and services goes up due to the tax (let's just assume VAT with no exceptions for simplicity), but that tax increase is paid out equally to everyone, then anyone who consumes the average amount of goods and services ends up at a wash since their total increase in costs is equal to their UBI, while those who consume less than average get more in income than they pay in additional costs. Agriculture is still a pretty competitive industry, so prices are going to be pretty close to costs anyway, so it's mostly a question of the effect on labor and other costs - but since it doesn't directly affect productivity or employment, what you will end up with is just a different bucket of goods and services with being produced with different relative prices and a higher share going to the poor.

EDIT: As for how much you can increase it, I'd suggest that as long as we don't exceed our inflation target there's no reason to be concerned.
Honesty replaced by greed, they gave us the reason to fight and bleed
They try to torch our faith and hope, spit at our presence and detest our goals

Chen
Posts: 5267
Joined: Fri Jul 25, 2008 6:53 pm UTC
Location: Montreal

Re: Citizen's Wage

Postby Chen » Wed Oct 25, 2017 2:09 pm UTC

I was more talking about businesses increasing the cost of things because of the ability for people to pay higher prices since they all get this UBI now. You may be right that agriculture/food will remain competitive enough that the prices won't drastically rise. But things like rent certainly will. That's probably even worse because the rich aren't even paying that but rather they're the ones taking IN that money.

User avatar
SDK
Posts: 550
Joined: Thu May 22, 2014 7:40 pm UTC
Location: Canada

Re: Citizen's Wage

Postby SDK » Wed Oct 25, 2017 2:19 pm UTC

Chen wrote:The problem I see is that for essentials, like food, the prices can just freely rise to account for the higher spending power of people.

Honestly, if increased demand for something as essential as food causes an increase in prices, I'm totally okay with that. Like, if the only reason food is so cheap now is because there is less demand from the people who are currently starving... that's not okay. That's something that needs to be fixed. If fixing that causes an increase in food prices, we will deal with that - but I highly doubt that will be the case anyway. The percentage of people who are currently NOT purchasing food is pretty low, and even then they're getting food from places like the food bank who purchase the food for them (or get donations from people who purchased the food). But again, whatever choices you've made in life, I personally don't think it's moral to allow lack of food to be the punishment.

As for other almost-but-not-quite-essentials like electricity or rent or phones, you may have a point, but I don't see how that extends beyond the short-term. Supply and demand is a two-way street. If businesses are gouging people based on the knowledge that everyone has money, they can be undercut by other businesses coming online to provide the same service at a reduced rate. If electricity prices go up because of additional demand, we can build more generators. It may take some time to stabilize, and it may ultimately stabilize at a higher rate (depending on how the UBI ends up affecting paid wages), but twerking the level of the UBI or how taxes are distributed (corporate vs. personal) should be able to solve that problem. Is there a reason you think supply and demand would not solve this issue?
The biggest number (63 quintillion googols in debt)

User avatar
Thesh
Made to Fuck Dinosaurs
Posts: 5497
Joined: Tue Jan 12, 2010 1:55 am UTC
Location: Colorado

Re: Citizen's Wage

Postby Thesh » Wed Oct 25, 2017 2:21 pm UTC

Chen wrote:I was more talking about businesses increasing the cost of things because of the ability for people to pay higher prices since they all get this UBI now. You may be right that agriculture/food will remain competitive enough that the prices won't drastically rise. But things like rent certainly will. That's probably even worse because the rich aren't even paying that but rather they're the ones taking IN that money.


Rent may increase, but it's still driven by market forces, housing prices and the cost of land and construction; it's impossible to say exactly what the effects would be without more data, but in the end if you have a 25% VAT to fund a UBI that is 20% of your economy, then no matter what the people at the bottom will be able to purchase *at least* 20% of the output of the economy.

EDIT: Also, profit margins for rental properties are 16% - you would likely need over 100% profit margins on rent for properties to absorb all of the UBI.
Honesty replaced by greed, they gave us the reason to fight and bleed
They try to torch our faith and hope, spit at our presence and detest our goals

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Wed Oct 25, 2017 5:50 pm UTC

One thing I always find very suspicious about these "UBI will cause inflation and just decrease buying power for ordinary people" arguments is: does it follow that if we did the opposite, and took money from the average working person and concentrated it all in the hands of the rich, that that would somehow lower prices and actually increase the buying power of the poor? That seems highly unlikely.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
freezeblade
Posts: 1081
Joined: Fri Aug 24, 2012 5:11 pm UTC
Location: Oakland

Re: Citizen's Wage

Postby freezeblade » Wed Oct 25, 2017 5:57 pm UTC

Pfhorrest wrote:One thing I always find very suspicious about these "UBI will cause inflation and just decrease buying power for ordinary people" arguments is: does it follow that if we did the opposite, and took money from the average working person and concentrated it all in the hands of the rich, that that would somehow lower prices and actually increase the buying power of the poor? That seems highly unlikely.

Seems like a question to ask the "trickle down" folks, but then, we know what their answer would be.
Belial wrote:I am not even in the same country code as "the mood for this shit."

Chen
Posts: 5267
Joined: Fri Jul 25, 2008 6:53 pm UTC
Location: Montreal

Re: Citizen's Wage

Postby Chen » Wed Oct 25, 2017 7:19 pm UTC

SDK wrote:As for other almost-but-not-quite-essentials like electricity or rent or phones, you may have a point, but I don't see how that extends beyond the short-term. Supply and demand is a two-way street. If businesses are gouging people based on the knowledge that everyone has money, they can be undercut by other businesses coming online to provide the same service at a reduced rate. If electricity prices go up because of additional demand, we can build more generators. It may take some time to stabilize, and it may ultimately stabilize at a higher rate (depending on how the UBI ends up affecting paid wages), but twerking the level of the UBI or how taxes are distributed (corporate vs. personal) should be able to solve that problem. Is there a reason you think supply and demand would not solve this issue?


Food I'll grant may be sufficiently broad to not come under too much gouging. I'm not sure the same is the case with housing and thus rent though. Here's you're literally competing with your fellow renter/owner in terms of buying something. The supply is the problem and adding more money to the system will definitely increase the demand. I mean you see it with gentrification now. As you throw more money into an area the prices go up.

Thesh wrote:Rent may increase, but it's still driven by market forces, housing prices and the cost of land and construction; it's impossible to say exactly what the effects would be without more data, but in the end if you have a 25% VAT to fund a UBI that is 20% of your economy, then no matter what the people at the bottom will be able to purchase *at least* 20% of the output of the economy.

EDIT: Also, profit margins for rental properties are 16% - you would likely need over 100% profit margins on rent for properties to absorb all of the UBI.


Can you explain where you're getting those numbers from? The 100% increase needed or how your 20% UBI necessarily means the ability to purchase at least 20% of the output of the economy? I mean the last one seems tautological and not terribly easy to envision the implications of. So some clarification would help.

Pfhorrest wrote:One thing I always find very suspicious about these "UBI will cause inflation and just decrease buying power for ordinary people" arguments is: does it follow that if we did the opposite, and took money from the average working person and concentrated it all in the hands of the rich, that that would somehow lower prices and actually increase the buying power of the poor? That seems highly unlikely.


I'm not sure it would actually lead to a decrease in buying power. One would imagine it would stabilize out. But then the UBI you've allocated is no longer sufficient for someone to survive hence it would need to be increased, which starts the cycle again. I mean, imagine the US government gave everyone $1 000 000. Prices for everything would skyrocket. This type of price discrimination already exists in various situations in the real world. Where companies charge people in different countries different amounts due to how much they can actually afford (medicine in western nations vs developing nations for example).

If you did take money away from poor people, prices would necessarily need to drop. This almost certainly won't increase their buying power though. The prices will drop to a degree but they'll almost certainly still be worse off.

User avatar
Zamfir
I built a novelty castle, the irony was lost on some.
Posts: 7302
Joined: Wed Aug 27, 2008 2:43 pm UTC
Location: Nederland

Re: Citizen's Wage

Postby Zamfir » Wed Oct 25, 2017 7:49 pm UTC

but in the end if you have a 25% VAT to fund a UBI that is 20% of your economy,

There's something off here. For comparison, the Netherland have a VAT of 21% on most goods, and 6% on as smaller subset. This raises around 50 billion euro, or 7% of GDP. I am too lazy to do the calculation, but a full-range 25% VAT won't raise anywhere near 20% of GDP.

You could theoretically raise the VAT tariff to get a tax revenue of 20% of GDP, but you are going to run into significant adverse effects. Like any tax, revenue will grows sublinear with the tariff level.

User avatar
SDK
Posts: 550
Joined: Thu May 22, 2014 7:40 pm UTC
Location: Canada

Re: Citizen's Wage

Postby SDK » Wed Oct 25, 2017 7:56 pm UTC

Chen wrote:I mean, imagine the US government gave everyone $1 000 000. Prices for everything would skyrocket.

Where is the government getting that $385 trillion dollars? We're not talking about printing money here, and I'm pretty sure taking $385 trillion dollars in taxes would not cause prices to skyrocket, but to plummet. So... no change on the whole?

Chen wrote:If you did take money away from poor people, prices would necessarily need to drop. This almost certainly won't increase their buying power though. The prices will drop to a degree but they'll almost certainly still be worse off.

So if we take that as a given, why is a UBI necessarily going to make prices rise to a problematic level? If I flip your sentence to "The prices will rise to a degree but the poor will almost certainly still be better off," well, that doesn't sound so bad.
The biggest number (63 quintillion googols in debt)

Chen
Posts: 5267
Joined: Fri Jul 25, 2008 6:53 pm UTC
Location: Montreal

Re: Citizen's Wage

Postby Chen » Wed Oct 25, 2017 8:13 pm UTC

SDK wrote:Where is the government getting that $385 trillion dollars? We're not talking about printing money here, and I'm pretty sure taking $385 trillion dollars in taxes would not cause prices to skyrocket, but to plummet. So... no change on the whole?


It was simply a thought experiment. The point was that price discrimination depending on means is something that occurs. A UBI gives EVERYONE extra means but the increased price only affects those at the lower end. It's negligible at the top end. It won't negate the UBI, but it cuts into its effectiveness (see below).

So if we take that as a given, why is a UBI necessarily going to make prices rise to a problematic level? If I flip your sentence to "The prices will rise to a degree but the poor will almost certainly still be better off," well, that doesn't sound so bad.


I explained that it still wouldn't be sufficient to live on though if that was the goal of the UBI or citizens wage. If its just an abtract other level of welfare, then sure. I thought the whole intent was that if someone wasn't working this would be sufficient to let them get by.

User avatar
Thesh
Made to Fuck Dinosaurs
Posts: 5497
Joined: Tue Jan 12, 2010 1:55 am UTC
Location: Colorado

Re: Citizen's Wage

Postby Thesh » Wed Oct 25, 2017 9:08 pm UTC

Zamfir wrote:
but in the end if you have a 25% VAT to fund a UBI that is 20% of your economy,

There's something off here. For comparison, the Netherland have a VAT of 21% on most goods, and 6% on as smaller subset. This raises around 50 billion euro, or 7% of GDP. I am too lazy to do the calculation, but a full-range 25% VAT won't raise anywhere near 20% of GDP.

You could theoretically raise the VAT tariff to get a tax revenue of 20% of GDP, but you are going to run into significant adverse effects. Like any tax, revenue will grows sublinear with the tariff level.


For my numbers to be accurate it would require that you charge VAT on all production including government consumption and investment. Also, many items in the Netherlands are taxed at 6% and if I understand what I'm looking up, education and medicine are exempt.

EDIT: There are also issues with it being invoice based instead of accounts based, in that exported goods are not charged but imported goods are, and the Netherlands has a trade surplus.

Chen wrote:Can you explain where you're getting those numbers from? The 100% increase needed or how your 20% UBI necessarily means the ability to purchase at least 20% of the output of the economy? I mean the last one seems tautological and not terribly easy to envision the implications of. So some clarification would help.


What, 25% and 20%? 25% I picked as an example, and a 20% is the percentage of the price that goes to tax if VAT is 25%.

The 100% profit margins was a guesstimate, and it's a low one if you think about it; if you assume that everyone gets 20% of per-capita GDP, or about $11,500, then profits on rent would have to increase an average of $960 per unit if it's going to absorb all of it - you can find apartments for less than that all over the country*.

* https://www.huduser.gov/portal/datasets ... 0_rev.xlsx - shows the median rent in various areas, for 0-4 bedrooms, and about 2/3rds of the country lives in areas where a 1 bedroom unit can be had for less than $960.
Last edited by Thesh on Wed Oct 25, 2017 9:11 pm UTC, edited 1 time in total.
Honesty replaced by greed, they gave us the reason to fight and bleed
They try to torch our faith and hope, spit at our presence and detest our goals

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Wed Oct 25, 2017 9:11 pm UTC

Chen wrote:It was simply a thought experiment. The point was that price discrimination depending on means is something that occurs. A UBI gives EVERYONE extra means but the increased price only affects those at the lower end. It's negligible at the top end. It won't negate the UBI, but it cuts into its effectiveness (see below).

Thing is, combined with the tax that funds it, not everyone has extra means in the end. People around a certain threshold (under my proposal, people at the mean income) see no difference in their means, because they lose as much to tax as they get in UBI. People above that threshold gradually see their means diminished the further above it they get, and people below it gradually see their means increased the further below it they get. So there isn't actually more money per capita to spend, it's just spread around in more hands; and if that causes inflation anyway and if you're right that the increased price only affects those at the lower end, then that's offset by the fact that those at the lower end are seeing more benefit. Which seems, by the logic SDK's reversal of your earlier statement, like it would result in a net increase in buying power for the people at the bottom.

I explained that it still wouldn't be sufficient to live on though if that was the goal of the UBI or citizens wage. If its just an abtract other level of welfare, then sure. I thought the whole intent was that if someone wasn't working this would be sufficient to let them get by.

If you have to increase the UBI for it to actually be enough to survive on, then so be it, and keep doing that so long as it's possible without being offset by other possible negative consequences, e.g. if you have to increase it to 100% the mean income, then that goal is obviously impossible since that would be pure "communism" [the bogeyman version thereof at least], and nobody would have any incentive to work at all. How close to that threshold we can get without such negative consequences outweighing the benefits is an empirical question. It's possible, given various other economic factors, that there might not be enough economic surplus to guarantee everyone's survival, in which case an UBI wouldn't be able accomplish that. (From what I've read, at present, there definitely is in our economy).

But the redistributive effects are a good thing either way. I like it simply for the centerward pressure it applies to income distribution, counteracting the tendency for the rich to get richer and the poor to get poorer. If we guarantee that nobody makes less than, say, half the mean income, and half the mean income still isn't enough to survive on, then that increases pressure for people near the bottom to work more, which increases the mean income again and pulls up everyone else with them. You get all the benefits of a safety net, not leaving anyone completely behind, but without the prospect of everyone slacking off and dragging everyone down together, because if the collective starts to go down, that incentivizes people on the bottom to work more, and they can actually do so and improve their own situations unlike a purely equal-outcome "communist" scenario.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
SDK
Posts: 550
Joined: Thu May 22, 2014 7:40 pm UTC
Location: Canada

Re: Citizen's Wage

Postby SDK » Wed Oct 25, 2017 11:35 pm UTC

Pfhorrest wrote:...that incentivizes people on the bottom to work more, and they can actually do so and improve their own situations unlike a purely equal-outcome "communist" scenario.

In my opinion, the coolest side-effect of the citizen's wage is that it incentivizes people to become entrepreneurs, no matter their station in life. Someone who's rich is still totally fine if their company flops. Someone who's poor cannot afford to take that risk, no matter how good their idea/ability/work ethic might be. With a UBI, that poor person can take their chance and not starve to death if they fail.

Chen wrote:It was simply a thought experiment. The point was that price discrimination depending on means is something that occurs.

I don't disagree with that statement, and I expect that prices likely would rise as a result. Why do you think that rise would be permanent though?

Chen wrote:I explained that it still wouldn't be sufficient to live on though if that was the goal of the UBI or citizens wage.

Sorry if I missed it, but I didn't see you explain that at all. I saw you state it, but I would like you to back that up. It seems to me that any upward pressure on prices would be either temporary or not significant enough to prevent people from living off that wage.

Or maybe you're talking about your gentrification example? Yes, it's true that rent may be prohibitively expensive in certain areas for those who either choose to or are forced to live on the UBI alone. That may be a problem for those individuals, but that problem already exists and is not something that's going to go away, UBI or no. Land prices are something else entirely since there actually is a limited supply. That is not the case for... basically any other product. You already conceded that food prices likely wouldn't be greatly affected, right? Do you still believe that something like electricity or phones will be?
The biggest number (63 quintillion googols in debt)

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Wed Oct 25, 2017 11:50 pm UTC

Pfhorrest wrote:People above that threshold gradually see their means diminished the further above it they get, and people below it gradually see their means increased the further below it they get.

Which is my biggest problem. It means that you're reducing the incentive to succeed.

So there isn't actually more money per capita to spend, it's just spread around in more hands; and if that causes inflation anyway and if you're right that the increased price only affects those at the lower end, then that's offset by the fact that those at the lower end are seeing more benefit. Which seems, by the logic SDK's reversal of your earlier statement, like it would result in a net increase in buying power for the people at the bottom.

Inflation isn't uniform across all markets. The increase in money to the poor means they will have more funds to purchase necessities like food and rent and mass market consumer goods. These items would increase in price while durable goods and high-end luxury items that the poor don't buy will decrease somewhat. Overall inflation impact may be minimal and it likely won't wipe out 100% of the additional buying power provided per dollar of UBI, but it will cut into it substantially.

But the redistributive effects are a good thing either way. I like it simply for the centerward pressure it applies to income distribution, counteracting the tendency for the rich to get richer and the poor to get poorer. If we guarantee that nobody makes less than, say, half the mean income, and half the mean income still isn't enough to survive on, then that increases pressure for people near the bottom to work more, which increases the mean income again and pulls up everyone else with them. You get all the benefits of a safety net, not leaving anyone completely behind, but without the prospect of everyone slacking off and dragging everyone down together, because if the collective starts to go down, that incentivizes people on the bottom to work more, and they can actually do so and improve their own situations unlike a purely equal-outcome "communist" scenario.

Are the redistributive effects really a good thing? I'd argue that the current system provides stronger incentive for everyone to be productive. It rewards greater wealth creation with greater reward and the penalty for not being productive is more severe. I think there will be large negative effects to weakening that incentive structure, which UBI would be very effective at. I'm much more inclined to make targeted investments to help those on the lower end of the spectrum develop the tools to produce more wealth for themselves. Accelerating wealth creation overall with education and technical training and regulation where necessary to prevent non-value added rent seeking behavior will help everyone become better off faster. Fundamentally, UBI aggressively holds back the people who create the most wealth for society and rewards those that produce less, which I think will slow the overall pace of progress.

SDK wrote:In my opinion, the coolest side-effect of the citizen's wage is that it incentivizes people to become entrepreneurs, no matter their station in life. Someone who's rich is still totally fine if their company flops. Someone who's poor cannot afford to take that risk, no matter how good their idea/ability/work ethic might be. With a UBI, that poor person can take their chance and not starve to death if they fail.

I agree that this is one of the potential benefits, but is this effect strong enough to offset what I said above? Can these self motivated people who have the great ideas succeed if there's less capital available for others to invest in such start ups? And why can't we achieve similar results within the current system through venture capital and crowd sourcing? Maybe we could bookmark a small portion of everyone's UBI to go to charities or crowdfunded projects to help drive those opportunities?

User avatar
Thesh
Made to Fuck Dinosaurs
Posts: 5497
Joined: Tue Jan 12, 2010 1:55 am UTC
Location: Colorado

Re: Citizen's Wage

Postby Thesh » Thu Oct 26, 2017 12:05 am UTC

slinches wrote:I agree that this is one of the potential benefits, but is this effect strong enough to offset what I said above? Can these self motivated people who have the great ideas succeed if there's less capital available for others to invest in such start ups? And why can't we achieve similar results within the current system through venture capital and crowd sourcing? Maybe we could bookmark a small portion of everyone's UBI to go to charities or crowdfunded projects to help drive those opportunities?


Do you have evidence that problem you are worried about even exists? Do you have evidence that inequality increases innovation or competition?
Honesty replaced by greed, they gave us the reason to fight and bleed
They try to torch our faith and hope, spit at our presence and detest our goals

User avatar
ucim
Posts: 5564
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: Citizen's Wage

Postby ucim » Thu Oct 26, 2017 2:23 am UTC

SDK wrote:In my opinion, the coolest side-effect of the citizen's wage is that it incentivizes people to become entrepreneurs, no matter their station in life.
No, I don't see it that way. It certainly acts as an enabler for people who otherwise could not {afford to} take the risk of losing everything. But it doesn't add any incentive to do so.

slinches wrote:Which is my biggest problem. It means that you're reducing the incentive to succeed.
Yes, to some extent this is true. However that's not what this addresses; rather, it addresses the obstacles to success that poverty-level income provides. The idea is to remove these obstacles. So one of the questions to be answered is what happens when these obstacles are removed (by a cash grant). Does the benefit of removing the obstacle exceed the cost of diminished incentive? Does this continue in the long term? What is the effect on the economy of the effect on labor costs if everyone can safely say "take this job and shove it!"? People paint pictures because they want to; they flip burgers because they have to. How does this mesh with the coming AI revolution? (...and will it actually come about the way it's feared?) Small scale experiments can provide some insight, but it's unwise to extrapolate too far from them.

A big assumption is that there is enough money to go around. Maybe there is; a naive calculation is that since we can guarantee everyone an average income by 100% taxation to fund a UBI equal to the average income, that there certainly is enough money to go around. Such a system would kill the economy. (Does anybody think this is not true?) Similarly, naively applying this solution at (say) 50% could "half-kill" the economy. Applying it at 25% may not adequately address the problem it's meant to address. This is why I'm not at all convinced that this seemingly simple solution will work.

Further, the income necessary varies by person, location, and situation. What do you do about somebody who needs expensive (noncovered) medical care? Or somebody whose health situation makes earning money much more difficult than her neighbor? Or somebody who lives in an expensive area - do they get more money (i.e. an amount based on local cost-of-living)? So, despite the pretty wrapping, UBI is not at all a panacea, and even if implemented, there will be calls for need-based aid on top of it. So that bureaucracy won't go away.

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Thu Oct 26, 2017 2:26 am UTC

slinches wrote:Which is my biggest problem. It means that you're reducing the incentive to succeed.

Under my proposal at least, the incentive to succeed is exactly the same at every level of income. You keep x% of each additional dollar you make, no matter how many dollars you make. You just start out with y dollars, where y = x% the mean income.

Are the redistributive effects really a good thing? I'd argue that the current system provides stronger incentive for everyone to be productive. It rewards greater wealth creation with greater reward and the penalty for not being productive is more severe. I think there will be large negative effects to weakening that incentive structure, which UBI would be very effective at. I'm much more inclined to make targeted investments to help those on the lower end of the spectrum develop the tools to produce more wealth for themselves. Accelerating wealth creation overall with education and technical training and regulation where necessary to prevent non-value added rent seeking behavior will help everyone become better off faster. Fundamentally, UBI aggressively holds back the people who create the most wealth for society and rewards those that produce less, which I think will slow the overall pace of progress.

I think it's again useful to imagine doing the opposite of an UBI and ask if that would be a good thing. Say everyone every month starts out y dollars in debt to the government, but then for every dollar you earn with your own hard work (or your own leveraged capital advantage, or your own trust fund, or whatever the case may be), the government gives you x% of a dollar, where again y = x% of the mean income. That would sure incentivize progress by your reasoning wouldn't it? Everyone would be (even more) desperate for money because they all start out in debt, so they'd all scramble to be as productive as possible, and the government would reward them for their productivity by multiplying it. Of course, everyone below the mean income would end up losing money from this scheme, while everyone above it would end up profiting from it, but obviously the people below the mean income need to be incentivized to work even harder (by making them even more desperate) since they're clearly slacking off or they wouldn't be down there, while the people above it are already huge bastions of productivity who don't need further incentivizing so it's okay if they get extra money for free, they deserve it. Right?

I'd argue (and I wouldn't be alone) that something like that scenario already exists due to existing defects of capitalist markets. (Except instead of the government, it's capital-owners: you start out every month in debt to whoever's capital you're living off of, and some fraction of what you make beyond that every month can be invested to earn you money the same way, and whether those add up to a net gain or loss for you depends on how much you make). My preferred long-term solution is to remove those defects, so that there isn't that pressure away from center that makes the poor poorer and the rich richer, so that having money doesn't make you money in and of itself, and lacking money doesn't cost you money. But in lieu of those much subtler fixes, an UBI that applies a counteracting centerward pressure is a better band-aid than the patchwork of welfare programs we have already.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
slinches
Slinches get Stinches
Posts: 958
Joined: Tue Mar 26, 2013 4:23 am UTC

Re: Citizen's Wage

Postby slinches » Thu Oct 26, 2017 2:36 am UTC

So why not fix the defects rather than implementing an entirely new system? Why is a UBI more effective than targeted need based assistance?

User avatar
Pfhorrest
Posts: 3903
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: Citizen's Wage

Postby Pfhorrest » Thu Oct 26, 2017 2:43 am UTC

slinches wrote:So why not fix the defects rather than implementing an entirely new system?

I said I would prefer to, but my ideas on that front are even more vehemently hated than UBI is. Odds are, given your position in society, you've likely argued against them yourself when I've brought them up here before. (I have a terrible memory for names so I don't know if you've been among the people arguing against them or not).

UBI is a band-aid to me. Or to switch metaphors, it's like a bunch of people are dying of some bacterial infection and everyone thinks my idea to cure it with a mold (of the genus penicillium) is patently insane, but they're coming around to the idea that a willow bark extract (asprin) will at least alleviate some symptoms, so I'm saying okay, if you won't give them the cure, at least give them some pain relief that works better than the leeches and bloodletting you're using now!

Why is a UBI more effective than targeted need based assistance?

The main thing I find more attractive about it from a practical standpoint is that there aren't perverse incentives like with current welfare systems. E.g. my disabled mother would love to try to work some small part-time job for some additional money, to whatever small degree she could manage to get and maintain, but if she did that she would lose far more than she could possible make when she became disqualified for the disability income she lives off of now. So she has an incentive not to work, even though she wants to. Lots of existing welfare systems are like that: trying to better your situation makes it suddenly much worse, so you're incentivized not to try. Under an UBI (like mine at least), there is always, at every level of income, incentive to make more money yourself if you can, so you never end up in a welfare trap.

Aside from that, ideologically I like that it allows for a more free-market approach to welfare. You just give people money and let them choose what their highest priority needs are, instead of nanny-stating and telling them what to do and how to live.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
Zamfir
I built a novelty castle, the irony was lost on some.
Posts: 7302
Joined: Wed Aug 27, 2008 2:43 pm UTC
Location: Nederland

Re: Citizen's Wage

Postby Zamfir » Thu Oct 26, 2017 6:53 am UTC

For my numbers to be accurate it would require that you charge VAT on all production including government consumption and investment. Also, many items in the Netherlands are taxed at 6% and if I understand what I'm looking up, education and medicine are exempt.

EDIT: There are also issues with it being invoice based instead of accounts based, in that exported goods are not charged but imported goods are, and the Netherlands has a trade surplus.

Thing is, each of those VAT exemptions has a good reason for it.
Spoiler:
- VAT on government production would be a left-hand right-hand accounting trick. The government would need the extra VAT income to pay for the VAT it's levying on itself...
- Taxing investment is not a VAT (by definition). The point of a VAT is that you tax any value-adding steps one time only (by taxing the end product transaction, while not taxing intermediate transactions). That way, the tax doesn't create distortions in the production chain. Investment is an intermediate step - it's VAT is effectively levied when the output of the capital is sold to consumers, in future years.

- The 6% section is not anywhere large enough to close the gap (about one third of the value of the products taxed at 21%), and its intended purpose is to make the VAT less regressive. Increase this rate, and you'll have to lower some other rate elsewhere to compensate for the increased regression.

-education and medicine are already mostly socialized (and therefore subject to the same issue as levying a VAT on the government). In places where this is not the case, those are surely more pressing issues than a UBI?

- switching VAT from imports to exports is a killer, for more than a small VAT. Foreigners can avoid that VAT simply by not buying your exports, while your citizens can now avoid VAT by switching from domestic products to imported products... This is why the EU hammers on VAT regularisation across the common market.

It's all technical points, but the technical snags of taxation are rather crucial for a UBI.

User avatar
Thesh
Made to Fuck Dinosaurs
Posts: 5497
Joined: Tue Jan 12, 2010 1:55 am UTC
Location: Colorado

Re: Citizen's Wage

Postby Thesh » Thu Oct 26, 2017 11:52 am UTC

You make arguments for why the Netherlands doesn't do that today, but if it's all to fund a UBI those points are fairly irrelevant; sure medical and government are taxed, but everyone gets a rebate equal to the amount increased per person, so they can afford it.
Honesty replaced by greed, they gave us the reason to fight and bleed
They try to torch our faith and hope, spit at our presence and detest our goals


Return to “Serious Business”

Who is online

Users browsing this forum: No registered users and 15 guests