Universal Basic Income: Ideas on how to make it work?

[mu_enrico]

About Master Friedman's opinion, we should tell the whole story about it. What he proposed was to remove subsidies and give the fund directly to all people. Hence:
- It's not adding UBI on top of current government subsidies but reallocates them, therefore rational from the budgeting view.
- It simplifies bureaucracy (or removing government), let's say the Health Department no longer manages social health program since people are free to choose to manage their own health program. Less government, less bureaucracy, fewer inefficiencies, are equal to more money for UBI.
- Since everyone will be provided with UBI, then people are free to choose what they are going to do with it. They might use it for stupid things, but hey, it's freedom! So when you see SJ Warriors crying about how the government didn't take care of the poor, you can say, "it's UBI! they are poor because of their own stupidity."

The key is, instead of the government manages tax payer's money, let's distribute it directly to the people and let them free to choose what to do with it.

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[Cnut237]

money isn't free. When it's created it reduces the overall credibility of the currency UBI would mean creating more and more currency. Imagine govt aren't able to meet our expenses with 30-50% taxes how much taxes do you want?

UBI doesn't mean creating more money. There would have to be some tax changes, yes, particularly at the top-end, but I don't think it would be excessive. Removal of the tax-free allowance on its own would generate huge revenue. People currently aren't taxed on the first £12.5k (for the UK)... if we had £10k UBI, then you'd only earn £2.5k before you'd get taxed, so an extra £10k would become taxable... and if you're a higher-rate tax payer, then an extra £10k at higher rate, too... and that's without adjusting the bands at all.

I would use every UBI payment I got as capital towards building and maintaining my businesses.

If you already have a decent income, chances are that UBI wouldn't mean that your total income would increase, because of off-setting through tax changes. What it would mean is that if your business failed completely, you'd still have some guaranteed UBI coming in. UBI isn't magic money printer, it's a form of wealth redistribution. If you already have a decent income, chances are you wouldn't gain - except through living in a more equitable and harmonious society.

If people only have just enough to put food on the table and not much else, they're still going to need work, and all the power will remain with employers all the same. That's why I think it has to be enough to lift people above the poverty line.

You're probably right. But even if the UBI takes people up to the poverty line and no further, they'd still gain some small amount of power.

[Febo]

If it is really universal (i.e given to everybody) it will create inflation. If it's only given to some, it will not be very different from the existing systems of support for the most disadvantaged, which consist of a redistribution of wealth from the middle class to the poor.

It is universal since it is given same amount to everyone. It will not increase country spending's since it will just redistribute founds that are already given to people. Just that UBI will give same to all instead of a lot to some and none to others. UBI is very different from the system that exist in most countries.

[teosanru]

money isn't free. When it's created it reduces the overall credibility of the currency UBI would mean creating more and more currency. Imagine govt aren't able to meet our expenses with 30-50% taxes how much taxes do you want?

UBI doesn't mean creating more money. There would have to be some tax changes, yes, particularly at the top-end, but I don't think it would be excessive. Removal of the tax-free allowance on its own would generate huge revenue. People currently aren't taxed on the first £12.5k (for the UK)... if we had £10k UBI, then you'd only earn £2.5k before you'd get taxed, so an extra £10k would become taxable... and if you're a higher-rate tax payer, then an extra £10k at higher rate, too... and that's without adjusting the bands at all.

I would use every UBI payment I got as capital towards building and maintaining my businesses.

If you already have a decent income, chances are that UBI wouldn't mean that your total income would increase, because of off-setting through tax changes. What it would mean is that if your business failed completely, you'd still have some guaranteed UBI coming in. UBI isn't magic money printer, it's a form of wealth redistribution. If you already have a decent income, chances are you wouldn't gain - except through living in a more equitable and harmonious society.

If people only have just enough to put food on the table and not much else, they're still going to need work, and all the power will remain with employers all the same. That's why I think it has to be enough to lift people above the poverty line.

You're probably right. But even if the UBI takes people up to the poverty line and no further, they'd still gain some small amount of power.

Haha either you are not pretty familiar with concepts of Economics and taxation or maybe you are too lame to explain your idea. You know a concept of per capita GDP? Go and check the per capita income of different countries of the world. You will be shocked to see it being that low for many countries. Even their per capita income is so low than what a normal resident needs for it's household. You are being to naive and just doing calculations in your mind regarding taxation and everything. Leave the universal income part and See how much money is created each year by big Economies every year? You think they don't know the idea of magically reforming the tax regime as they get more money? Why devaluate their currency? UBI looks too good on paper but actual practical implications will make it more or less useless and burdensome. Think of it you are saying govt will abolish minimum tax slab and will get revenue of 2.5k pounds each? Using this they will distribute 10k pounds each to half of the country? Makes sense? No!!

[Mauser]

If it is really universal (i.e given to everybody) it will create inflation. If it's only given to some, it will not be very different from the existing systems of support for the most disadvantaged, which consist of a redistribution of wealth from the middle class to the poor.

It is universal since it is given same amount to everyone. It will not increase country spending's since it will just redistribute founds that are already given to people. Just that UBI will give same to all instead of a lot to some and none to others. UBI is very different from the system that exist in most countries.

I don't think you should be eligible for basic income if you have a job. I would understand its for people who are unemployed or who earn less than the basic income. In the end its just another form of redistribution of wealth from the rich to the poor. It should be paid out of taxes and not the printing press to avoid inflation. Due to technology advancement the human factor in the workforce keeps getting forgotten. In 20 years less and less people will be needed as most production jobs will be done by robots.

It's a good idea to think about the people left behind. A universal basic income could be a good start.

[Salauddin1994]

There are many variations of universal basic income. The most basic of these proposals will simply replace social security unemployment compensation and public assistance programs with the basic income per citizen. The US Basic Income Guarantee Network supports the plan saying it is trying to force workers into poverty as a way to alleviate poverty. Hard work and a fast-paced economy have not come close to eradicating poverty. A universal program like the Basic Income Guarantee could alleviate poverty group states. The group is most helpful as a universal process.

[Spaffin]

There are many variations of universal basic income. The most basic of these proposals will simply replace social security unemployment compensation and public assistance programs with the basic income per citizen. The US Basic Income Guarantee Network supports the plan saying it is trying to force workers into poverty as a way to alleviate poverty. Hard work and a fast-paced economy have not come close to eradicating poverty. A universal program like the Basic Income Guarantee could alleviate poverty group states. The group is most helpful as a universal process.

What is happening today not only in the United States, but also in other countries, can in no way be called an attempt to eradicate poverty from society. It seems that the government continues to act in a different direction, aggravating the situation, dividing the interests of the state and the people.

[Febo]

I don't think you should be eligible for basic income if you have a job.

That is not UBI then. That is social welfare. In most countries you allready get that for unemployed if you are actively searching for a job.  UBI is that every single citizen no matter who. Or Bill Gates or Mother Theresa or Messi or Lebron James all get the same amount of money each month. There is no social welfare office needed anymore that decide who will get help and who not. All money that will be given away is thrown into one bag and evenly divided out.

Right now many are cheating and are getting help others that should get it dont get it. Right now many are employed to decide who get it and who not. With UBI all is known in advance and no need to pay people doing it.  

In country where I live. Parents of kids that dont earn that much get some help. There is a limit like ( I will throw random numbers)  If family per every member earn less then $500 a month, then for every kid they get $100 a month. So there is a family where one parent earn a lot and other less. They dont marry. And then one parent gets this pay. Other family that overall earns exactly the same dont get it, because parents are married. Our old government had idea to make UBI for kids. So every kid would automatically get it no matter how rich their parent are. Sadly the government was replaced in March and it was not implemented.

[Cnut237]

You know a concept of per capita GDP? Go and check the per capita income of different countries of the world. You will be shocked to see it being that low for many countries. Even their per capita income is so low than what a normal resident needs for it's household. You are being to naive and just doing calculations in your mind regarding taxation and everything. Leave the universal income part and See how much money is created each year by big Economies every year? You think they don't know the idea of magically reforming the tax regime as they get more money? Why devaluate their currency? UBI looks too good on paper but actual practical implications will make it more or less useless and burdensome.

Why would I be shocked that some countries have very low GDP per capita? I'm sure that's obvious to everyone. UBI is a form of wealth redistribution. It doesn't involve creating new money out of nothing, it doesn't magically make everyone rich or eliminate corruption or raise entire countries out of poverty. No-one ever suggested that solves all the problems in the world. But it does reduce inequality.

Haha either you are not pretty familiar with concepts of Economics and taxation or maybe you are too lame to explain your idea.

It's not my idea. Although my example illustration should be fairly simple to understand.

Think of it you are saying govt will abolish minimum tax slab and will get revenue of 2.5k pounds each? Using this they will distribute 10k pounds each to half of the country? Makes sense? No!!

No, I'm not saying that, please read it again. I said: "There would have to be some tax changes, yes, particularly at the top-end". The bit about the tax-free allowance is saying that UBI partially funds itself. If you get £10k UBI, that increases the amount of tax you pay on your earnings even without adjusting tax bands, because the UBI takes up most of your tax free allowance.

UK tax bands up to £150k income:
up to £12.5k - no tax
£12.5k - 50k - 20% tax
£50k - 150k - 40% tax

Say you earn £60k a year, the first £12.5k is tax free, the next £37.5k is taxed at basic rate 20%, the next £10k is taxed at higher rate 40%.
Now say you get paid £10k per year UBI. You still earn your £60k from your job, but now of that £60k, the first £2.5k is tax free, the next £37.5k is taxed at 20%, the final £20k is taxed at 40%.

Obviously this increases tax revenue, which can partially fund UBI.
It can also partially be funded by the massive simplification to the welfare system - everyone gets the same basic amount, eliminating wasteful bureaucracy.

But this won't fully fund it. You'd also need to increase tax percentages. Take that person who earns £60k, a fairly decent salary in the UK. It might be reasonable to increase tax such that with their £10k UBI plus their income, they have the same amount of money coming in from UBI + salary as they did from salary alone in the old system.
Poor people would tend to gain under UBI. Rich people would tend to lose. Average people would not really notice much of a change. The difference being that the UBI is guaranteed, a universal safety net.
UBI does not mean giving out new money to everyone, it does not mean everyone becoming richer.... it's just a form of wealth redistribution!

[mu_enrico]

I don't think you should be eligible for basic income if you have a job.

Again with Friedman's concept of negative income tax, a person can still have a job and still get basic income (partially).
Let's say tax-free income is up to $2,000 monthly, and the excess (taxable) income is taxable by 20%.
- If a person has zero income (-$2,000), he shall receive $2,000 * 20% = $400 UBI monthly;
- If a person has $1,000 income (-$1,000), he shall receive $1,000 * 20% = $200 UBI monthly. So his total income will be $1,200;
- If a person has $2,000 income (0), he receive no UBI, but he pay no taxes.
- If a person has $5,000 income (+$3,000), he shall pay $3,000 * 20% = $600 tax.

*Above figures are just an illustration, not sure if it's too big or too small.

[teosanru]

You know a concept of per capita GDP? Go and check the per capita income of different countries of the world. You will be shocked to see it being that low for many countries. Even their per capita income is so low than what a normal resident needs for it's household. You are being to naive and just doing calculations in your mind regarding taxation and everything. Leave the universal income part and See how much money is created each year by big Economies every year? You think they don't know the idea of magically reforming the tax regime as they get more money? Why devaluate their currency? UBI looks too good on paper but actual practical implications will make it more or less useless and burdensome.

Why would I be shocked that some countries have very low GDP per capita? I'm sure that's obvious to everyone. UBI is a form of wealth redistribution. It doesn't involve creating new money out of nothing, it doesn't magically make everyone rich or eliminate corruption or raise entire countries out of poverty. No-one ever suggested that solves all the problems in the world. But it does reduce inequality.

Haha either you are not pretty familiar with concepts of Economics and taxation or maybe you are too lame to explain your idea.

It's not my idea. Although my example illustration should be fairly simple to understand.

Think of it you are saying govt will abolish minimum tax slab and will get revenue of 2.5k pounds each? Using this they will distribute 10k pounds each to half of the country? Makes sense? No!!

No, I'm not saying that, please read it again. I said: "There would have to be some tax changes, yes, particularly at the top-end". The bit about the tax-free allowance is saying that UBI partially funds itself. If you get £10k UBI, that increases the amount of tax you pay on your earnings even without adjusting tax bands, because the UBI takes up most of your tax free allowance.

UK tax bands up to £150k income:
up to £12.5k - no tax
£12.5k - 50k - 20% tax
£50k - 150k - 40% tax

Say you earn £60k a year, the first £12.5k is tax free, the next £37.5k is taxed at basic rate 20%, the next £10k is taxed at higher rate 40%.
Now say you get paid £10k per year UBI. You still earn your £60k from your job, but now of that £60k, the first £2.5k is tax free, the next £37.5k is taxed at 20%, the final £20k is taxed at 40%.

Obviously this increases tax revenue, which can partially fund UBI.
It can also partially be funded by the massive simplification to the welfare system - everyone gets the same basic amount, eliminating wasteful bureaucracy.

But this won't fully fund it. You'd also need to increase tax percentages. Take that person who earns £60k, a fairly decent salary in the UK. It might be reasonable to increase tax such that with their £10k UBI plus their income, they have the same amount of money coming in from UBI + salary as they did from salary alone in the old system.
Poor people would tend to gain under UBI. Rich people would tend to lose. Average people would not really notice much of a change. The difference being that the UBI is guaranteed, a universal safety net.
UBI does not mean giving out new money to everyone, it does not mean everyone becoming richer.... it's just a form of wealth redistribution!

Okay leave everything aside. Let's agree with you that tax revamping can do this. If it's so easy to restructure tax revenues and everything. Why don't governments just make daily necessities of life free for every citizen? Why don't the governments just decide let's buy from the farmers in bulk and everyone can get that ration for free. Further that all basic necessities like simple clothes would be free for everyone let's set a limit to it that every person will get this much ration plus clothing free every month despite of what they earn/do. Why don't governments just simply increase taxes, collect revenues and run this scheme permanently? Expense of such a scheme would be much lesser than that on Universal Basic Income.

Tell me one country which has such a scheme running for long period of time for all citizens? Any Country? NO!! because practical reality is that nothing is free and it can never be. Limited Resources, Unlimited wants. A very basic rules of Economics!

Fun Fact: You know how much taxes are collected in UK already? It's 36% of GDP roughly £13,500 for every adult and even then there is a fiscal deficit in the economy which means they generate more money. Now for giving every person £10,000 you will need to double the taxes roughly upto 72%. Source of these numbers: Google. And yes UK is one of those countries with highest GDP per capita think of rest of the world. Wealth redistribution looks good in theory only practical problems are the reason why no government/state has been able to do it ever.

[Cnut237]

Why don't the governments just decide let's buy from the farmers in bulk and everyone can get that ration for free. Further that all basic necessities like simple clothes would be free for everyone let's set a limit to it that every person will get this much ration plus clothing free every month despite of what they earn/do. Why don't governments just simply increase taxes, collect revenues and run this scheme permanently? Expense of such a scheme would be much lesser than that on Universal Basic Income.

Sure, governments can do that if they want. It's kind of a throwback to Soviet-style communism, though, so I'm not sure why anyone would think it's a good idea. Also this suggestion is utterly different to UBI; I'm not sure how you've made a connection. UBI does not involve nationalising industries, forcing clothes on people, rationing food, or limiting consumer choice. UBI is simply a more equitable distribution of wealth.

Tell me one country which has such a scheme running for long period of time for all citizens? Any Country? NO!! because practical reality is that nothing is free and it can never be. Limited Resources, Unlimited wants. A very basic rules of Economics!

Many countries are running (or considering running) limited trials; the idea is gaining a lot of momentum. Certainly no country has been running full UBI for all citizens for a long period of time, I'll agree on that. But the argument of "this thing hasn't been done before, therefore it's a bad idea" is not particularly convincing. If everyone went along with that, we'd still be living as we were thousands of years ago.
And on your point of "nothing is free and it can never be"... once again, UBI is redistribution of what is already there. There is nothing 'free' or created out of nothing.
Alice has $8, Bob has $2. I redistribute this so Alice has $7 and Bob has $3. You can't argue that this is impossible, where will all this money come from? That doesn't make sense.

Fun Fact: You know how much taxes are collected in UK already? It's 36% of GDP roughly £13,500 for every adult and even then there is a fiscal deficit in the economy which means they generate more money. Now for giving every person £10,000 you will need to double the taxes roughly upto 72%.

Again, we are not giving people free money. The £10k was purely illustrative, but we are not giving people £10k on top of what they already receive after tax. We are giving on top of what they receive before tax is applied. This is a crucial difference. I am certainly not suggesting a £10k UBI involves everyone in the country gaining £10k post-tax income. The average person would not be expected to gain at all, other than having the UBI segment guaranteed rather than from employment.
UBI involves taxing people more, removing the expensive welfare bureaucracy, and then giving the proceeds from these two approaches equally to everyone, to ensure that everyone can afford to live. Poor people gain. Average people see no change (other than having a safety net). Rich people lose some money. That's all. The specific figures involved are speculative, that's why countries are trialling it (or considering trialling it).


I should add, although we disagree completely with one another, I enjoy the discussion. If everyone agreed all the time, we would never question anything and we'd never advance.


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Edit, additional:

I don't think you should be eligible for basic income if you have a job.

Again with Friedman's concept of negative income tax, a person can still have a job and still get basic income (partially).
Let's say tax-free income is up to $2,000 monthly, and the excess (taxable) income is taxable by 20%.
- If a person has zero income (-$2,000), he shall receive $2,000 * 20% = $400 UBI monthly;
- If a person has $1,000 income (-$1,000), he shall receive $1,000 * 20% = $200 UBI monthly. So his total income will be $1,200;
- If a person has $2,000 income (0), he receive no UBI, but he pay no taxes.
- If a person has $5,000 income (+$3,000), he shall pay $3,000 * 20% = $600 tax.

*Above figures are just an illustration, not sure if it's too big or too small.

Negative income tax is a different method to UBI, which results in a similar outcome. Below is a good summary. Which option you prefer is probably dependent on your ideological perspective with regards to taxation. There's a compare-and-contrast scenario at the link below, too.

"A negative income tax (NIT) and an unconditional basic income (UBI) are two ways of achieving a basic income guarantee (BIG). One gives a varying amount of money according to income, and the other gives the same amount to all and taxes different amounts back."

_{https://www.scottsantens.com/negative-income-tax-nit-and-unconditional-basic-income-ubi-what-makes-them-the-same-and-what-makes-them-different#:~:text=A%20negative%20income%20tax%20(NIT,and%20taxes%20different%20amounts%20back.}

[Yatsan]

It is really a great challenge for the Universal Basic Income (UBI) to be implemented due to various reasons that involves of course (1) the limited resources of the government when it comes to financial capability to support its people specially at times like this the almost all countries that are directly affected by the pandemic is experiencing an economic declination making them very limited to have a source for financial resource that will cover the needs of its people. (2) How the people are being recognized to be capable of acquiring and to belong on the said program of the government because we do have 3 social classes and excluding the upper class which I am pretty sure they won't barge to argue anymore not being included in the said program, still it would be hard to classify the two social classes because many people do not have record on local government units about their salary record to classify them as lower class or middle class.

In our country, financial assistance have made by filling out forms which excludes those rich people from filling out the forms and that is where our local government units filtered out those that are in need to have financial support and then passed it to the national government. But even if such have already been solved through that way, still that financial assistance have lasts only for two months due to limited financial resources and speculation of corruption on the national funds intended to support the needy. Such program of wealth distribution or UBI is a great idea but the execution or implementation is the hardest part of it that national government must think of their own way but still the main limiting factor is really the financial capability of the nation.

[Hydrogen]

There are lots of means tested welfare programs, especially in western countries, but UBI (unconditional basic income) has never existed before. Switzerland had a national referendum about basic income in 2016; it was rejected. I believe they are the only country to put the matter to a vote.

Social security is a social safety net for the retired and disabled. UBI is more intent on delivering payments to the active labor force. In fact, one of the arguments for UBI is that it empowers labor, giving workers more bargaining power regarding wages and workplace standards. It also gives workers freedom to pursue their own small businesses.

UBI is identical to SS in that both payout benefits derived from tax hikes.

If a person had a choice of pension plan and their options were social security, 401k, IRA roth or a basic savings bank account. No one would choose SS. It pays negative returns. Its the worst investment on top of being the worst managed and structured system.

UBI is identical to SS in that its a big government, big tax, big spending program that would payout negative returns. Surplus tax revenues collected from UBI would be redistributed towards war in the middle east, free healthcare for illegal immigrants and other dubious special interests.

Over the long term, UBI like social security, doesn't solve real problems. It only creates worse ones.

Yes, Friedman was broadly in favour of UBI:

One of Friedman’s main principles in favor of a basic income was the fact that the welfare system at the time punishes people for working. If someone receives employment and begins getting paid while on welfare, they will eventually lose their benefits.
"You could have a program that would be far superior to the present structure in that it would help people who are poor because they are poor. It would help them in a way which would retain an incentive for them to work," Friedman said. "Maybe a job comes up that looks better than welfare but they’re afraid to take it because if they lose it after a few months, it may be six month or nine months before they can get back onto welfare."
Friedman also thought UBI would increase levels of equality since everyone, no matter the race, class or religion of an individual would receive a guaranteed income.
"It’s a system which would have the effect of eliminating the separation of a society into those who receive and those who pay, a separation that tends to destroy the whole social fabric," Friedman said.

https://heavy.com/news/2019/06/milton-friedman-on-ubi/

Heavy.com disables comments by default to further close their publication to honest peer review. If you read that quotation carefully, you might notice it makes no sense.



Read the 2nd half of the quotation above, carefully.

"We make it costly for employers to employ people; we subsidize people not to work. We have a system that increasingly taxes work and subsidizes non work."

Here Milton Friedman criticizes programs like UBI. What "makes it costly for employers to employ people"? UBI does exactly that through tax hikes on businesses and workers utilized to fund UBI. What increasingly taxes work, to subsidize non work? UBI does. Even if Milton Friedman doesn't mention UBI by name, we can clearly see he would be against the program.

The silence of real commentary on the issue is deafening.

Not really. Discussion of UBI is becoming louder and louder. There have been a lot of trials in recent years, and the idea is spreading. It is popular with the left because it reduces social inequality. It is popular with the right because it reduces welfare bureaucracy. It is popular with long-term thinkers who can see it as a solution to the unemployment caused by the ever-increasing automation of jobs.

Commentary on UBI normally doesn't amount to more than political propaganda.

Claiming that UBI is popular with the right is the same as saying Jesus supports socialism/communism.

UBI is like strapping windmills and solar panels on top of a tesla electric car. Expecting the additional energy generated to compensate for the added weight. There's a law of diminishing returns which applies here that proves it won't work even before its attempted.

But some are determined to --try it-- anyway.

Maybe it is due to them not comprehending basic logic/science.

[teosanru]

I should add, although we disagree completely with one another, I enjoy the discussion. If everyone agreed all the time, we would never question anything and we'd never advance.


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Actually we don't only disagree but we are actually not able to keep our point onto each other. I would surely first of all, like to know from you your definition of "Income and Wealth"?.

Why don't the governments just decide let's buy from the farmers in bulk and everyone can get that ration for free. Further that all basic necessities like simple clothes would be free for everyone let's set a limit to it that every person will get this much ration plus clothing free every month despite of what they earn/do. Why don't governments just simply increase taxes, collect revenues and run this scheme permanently? Expense of such a scheme would be much lesser than that on Universal Basic Income.

Sure, governments can do that if they want. It's kind of a throwback to Soviet-style communism, though, so I'm not sure why anyone would think it's a good idea. Also this suggestion is utterly different to UBI; I'm not sure how you've made a connection. UBI does not involve nationalising industries, forcing clothes on people, rationing food, or limiting consumer choice. UBI is simply a more equitable distribution of wealth.

There is nothing to do with nationalizing Industries. What I meant was taxing the rich and using that money to provide basic necessities to everyone. Which too is a way/ mean of wealth distribution.

Tell me one country which has such a scheme running for long period of time for all citizens? Any Country? NO!! because practical reality is that nothing is free and it can never be. Limited Resources, Unlimited wants. A very basic rules of Economics!

Many countries are running (or considering running) limited trials; the idea is gaining a lot of momentum. Certainly no country has been running full UBI for all citizens for a long period of time, I'll agree on that. But the argument of "this thing hasn't been done before, therefore it's a bad idea" is not particularly convincing. If everyone went along with that, we'd still be living as we were thousands of years ago.
And on your point of "nothing is free and it can never be"... once again, UBI is redistribution of what is already there. There is nothing 'free' or created out of nothing.
Alice has $8, Bob has $2. I redistribute this so Alice has $7 and Bob has $3. You can't argue that this is impossible, where will all this money come from? That doesn't make sense.

I said this line about that free rationing scheme and not about UBI. Now coming to the second part. Let me explain you how this works. Alice has $8, Bob has $3, Casy has $4 Dobby earns nothing and Finy has $15. Now for your equitable distribution to take place total in the Economy currently is $30. Now we say everyone to has UBI of $5. Now, please help me out on calculating a proportion of tax rate we should put in this situation. Take this is as a numerical from my side. As per me this equation would never be equated at the end the large chunk of deficit would be from Deficit Financing.

Fun Fact: You know how much taxes are collected in UK already? It's 36% of GDP roughly £13,500 for every adult and even then there is a fiscal deficit in the economy which means they generate more money. Now for giving every person £10,000 you will need to double the taxes roughly upto 72%.

Again, we are not giving people free money. The £10k was purely illustrative, but we are not giving people £10k on top of what they already receive after tax. We are giving on top of what they receive before tax is applied. This is a crucial difference. I am certainly not suggesting a £10k UBI involves everyone in the country gaining £10k post-tax income. The average person would not be expected to gain at all, other than having the UBI segment guaranteed rather than from employment.
UBI involves taxing people more, removing the expensive welfare bureaucracy, and then giving the proceeds from these two approaches equally to everyone, to ensure that everyone can afford to live. Poor people gain. Average people see no change (other than having a safety net). Rich people lose some money. That's all. The specific figures involved are speculative, that's why countries are trialling it (or considering trialling it).

Actually, at the end of the day ownership of money is changing so you are giving people free money. I would suggest you to go through a reading of Micro-Macro Paradox. Healthcare and social welfare schemes are freebies too. Giving someone free money/ freebies and naming it wealth distribution doesn't changes the fact that it's free money.

Also I genuinely understand that ideals behind the UBI concept might be pretty pure and good for society but economically it's almost impossible to implement with hundreds of dynamics working together.

Edit: oh yes! I forgot to add that how population charts would rise especially in developing economies due to this. For people it would mean more members in family therefore more Income.

[Cnut237]

I would surely first of all, like to know from you your definition of "Income and Wealth"?.

This is a bit silly. Income is the money you have coming in. Wealth is the total money you have. Excluding other assets for simplicity.

Let me explain you how this works. Alice has $8, Bob has $3, Casy has $4 Dobby earns nothing and Finy has $15. Now for your equitable distribution to take place total in the Economy currently is $30. Now we say everyone to has UBI of $5. Now, please help me out on calculating a proportion of tax rate we should put in this situation. Take this is as a numerical from my side. As per me this equation would never be equated at the end the large chunk of deficit would be from Deficit Financing.

Okay, I'll indulge you. The $5 UBI is too extreme for this example as you're putting it higher than most people's earnings, but we can establish a decent level. And obviously this is all a huge oversimplification as we're ignoring other tax revenues and other government spending.

[exstasie]

This still wouldn't be effective if said UBI doesn't lift people out of poverty though. If people only have just enough to put food on the table and not much else, they're still going to need work, and all the power will remain with employers all the same.

If you have your basic needs covered, you aren't nearly as desperate to sell your labor. You can value it much more highly. That forces employers to pay a higher premium for competent workers, whether in wages or benefits.

They're shit out of luck either way anyway; you either cripple them with massive taxes to fund UBI, or you force them to spend more on labor.

I'd like to see evidence they'd be crippled by the increased taxes. For some reason, this is just taken as a given.

American companies are paying much lower corporate taxes today thanks to the Trump tax cuts, yet the obvious trajectory is still slashing benefits across the board for workers. More part-time workers, more gig workers, more ICs, while wages haven't been increasing once you account for inflation. And this was true long before the pandemic; COVID-19 is just accelerating the trend.

UBI is identical to SS in that both payout benefits derived from tax hikes.

That still completely ignores who gets paid, which is pretty damn important when considering the effects of entitlement programs.

If a person had a choice of pension plan and their options were social security, 401k, IRA roth or a basic savings bank account. No one would choose SS. It pays negative returns. Its the worst investment on top of being the worst managed and structured system.

The Social Security fund isn't intended to be an investment vehicle. It exists to pay monthly installments for retired and disabled people.

Are you saying the fund should be used to inflate the stock market, and that fixed income Social Security recipients should be exposed to those market risks? That would be better? If the market crashes, so does their monthly stipend.

Over the long term, UBI like social security, doesn't solve real problems. It only creates worse ones.

What are those worse problems? Walk me through it, and give me more than rhetoric.

Do you see no problem with the current system, where most industries have been completely consolidated by a few giant companies, and where worker benefits (including employer-funded 401Ks) are disappearing and wages are stagnant? Is this an optimal trajectory for the economy?

[Cnut237]

~

Thank you.

Do you see no problem with the current system, where most industries have been completely consolidated by a few giant companies, and where worker benefits (including employer-funded 401Ks) are disappearing and wages are stagnant? Is this an optimal trajectory for the economy?

This is the important point. I have two questions for those who have posted in this thread, but who are opposed to (at least trying) UBI.

I am in favour of trying UBI, but I'm not a UBI-zealot. It's just that I see it as potentially the best solution to a certain problem. Inequality is high, and is worsening. There are more people than there are jobs. But the biggest problem is the near future, with ever-increasing automation. Many skilled jobs will be at risk of automation as AI develops. The solution won't be to retrain people, because there will be far too few jobs available. If we do nothing, unemployment will be huge. A small minority will make vast fortunes running largely automated companies. Some lucky people will have jobs. Many won't. A radical redistribution of wealth will be required in order to keep society functioning. Otherwise we will be faced with a huge 'worthless' class, with little to no prospect of ever finding a job, and jobs themselves will be so scarce that employers can offer to pay a pittance and still get huge numbers of applicants. A degree of inequality within a fair society is good, it gives people something to strive for. But beyond a certain point it is hugely destructive. The world's richest man, Jeff Bezos, has over $190b. That's $190,000,000,000. Meanwhile, 1 in 3 people in the world don't have access to safe drinking water. This is an extreme example to illustrate the point... but do we really want this situation to continue to worsen? Yes, I'm aware that a US-based UBI would not be available to for example people in sub-saharan Africa... but huge inequality exists even within the US.

So my two questions, specifically to these people, are:
1) Do you agree that if nothing is done, then inequality will worsen and jobs will become increasingly scarce, and that this is a problem that will need fixing?
2) If so, what options other than UBI might be viable?

I am genuinely interested in answers and different opinions. I'm in favour of UBI largely because I think a solution is needed, and I can't think of anything that might be better.

[suchmoon]

jobs will become increasingly scarce

I disagree with that. Massive technological advances over the last couple of hundred years didn't result in fewer jobs, quite the opposite. Nor will the "AI" happen overnight. Automation has been going on for decades and it's certainly something to keep in mind for someone choosing a career path.

As for UBI, I'm all for it if it simplifies welfare systems and government in general. But I'm not too hopeful that a clean simple UBI is possible in the current political system. 50-100 years from now - maybe.

[verita1]

I am in favor of UBI but I also see a great challenge from governments as they cannot have the resources to finance the program.
The government needs to have digitized data of its population that includes bank accounts to send the benefit. In addition to knowing the income of the participants of the program to support those most in need.