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Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by google15 on Sunday November 22, 2015 @06:14PM (#10611939)
And in particular what is really happening is that the disincentive (which is created by any taxation for any purpose) is being spread more evenly throughout the population

Agreed, which is why I object to your statement that: We already know how to design a program that won't discourage work. It's not that basic income discourages work more or less, but that it evens out the marginal tax rate. This might be a good or a bad thing, but your original post contains no argument either way. You run a very strong risk of the reader misinterpreting what you are saying, and believing that there will be a uniform improvement in incentives across the whole population.

which all else equal can be expected to have less effect on behaviour than concentrating the effect on a subgroup which will then be much more compelled to react to it.

I think the main argument behind the current system is that low income people need the money, and therefore are less affected by the marginal tax rate.

Moreover, how the taxes are collected is separate from the basic income. If we find that it is for some strange reason better to charge a higher marginal rate to lower income people than higher income people then we can have a basic income and yet still do that.

Either "basic income" should be used to denote a flat tax plus basic income, or a varying marginal tax plus basic income. Your first post implies the former to the exclusion of the latter. I think you are changing the definition because it's important to you that basic income "win", but really there are two separate issues, which are negative taxation vs welfare, and fixed vs varying effective marginal tax rates. Each of these issues should be decided independently on their own merits.

Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by google15 on Sunday November 22, 2015 @06:47PM (#10612037)
(reply in place of broken edit functionality) Actually I think the main reason why we have a high marginal tax rate on low income people, is a deeper reason which is that incentives on the bottom end are more "expensive" because they propagate upwards. E.g. to incentivize a person earning $10000 a year, you need to give then $X for every dollar they earn, but then these affects the after tax earnings of everyone earning above $10000 a year. Sorry if this is vague but this comes from various results/methods in mechanism design theory. Unfortunately as is often the case, the advocates of basic income (not you in particular) are too political, while the economists don't chime in on political matters when they should.
Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by evanpw on Sunday November 22, 2015 @09:15PM (#10612491)
I think you're overthinking this. If you want to give a benefit to low-income people, then either you phase out slowly and it costs a lot, or you phase out quickly and you have high effective tax rates. And the people passing the laws probably pay a lot more attention to total budget cost than to the effects on effective marginal tax rates, so you end up with a lot of programs that have fast phase-outs.
Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by google15 on Sunday November 22, 2015 @09:57PM (#10612626)
The budget has to balance, so the question is not how much the system costs, but what are the incentive effects on the (wealthier) people who pay for it. If you agree with me that phasing the benefit out slowly "costs a lot" then you actually agree with my reasoning.
Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by evanpw on Monday November 23, 2015 @12:40PM (#10615866)
Maybe I'm just misunderstanding, but you're talking as if the current system was consciously selected because of some inherent advantages it has over the alternatives. I don't think that's really true, and I would argue that the high marginal tax rates on low-income people are less the result of a careful analysis of trade-offs, and more the result of a flaw in the incentive structure for law-makers (on-budget costs look worse than off-budget costs).
Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by AnthonyMouse on Sunday November 22, 2015 @09:53PM (#10612611)
> It's not that basic income discourages work more or less, but that it evens out the marginal tax rate. This might be a good or a bad thing, but your original post contains no argument either way.

Because the marginal tax rate is a separate thing. You can raise the money however you like. Tax the rich, tax the poor, tax securities derivatives, print lots of money, it's a separate consideration. What a basic income does is dramatically simplify the welfare system so that when you balance the other side of the ledger you can better see what you're looking at.

It may then also make sense to simplify the tax system and impose a uniform rate on everyone (because the level of redistribution of wealth can now be trivially set by adjusting the amount of the basic income), but there is no inherent reason why any other method of raising the money could not be used instead. Even in that case a basic income is preferable to the existing system of ad hoc means tested welfare programs.

> I think the main argument behind the current system is that low income people need the money, and therefore are less affected by the marginal tax rate.

There are three points here.

First, if these people need the money so badly, is it really good policy to be imposing high marginal tax rates on them, regardless of whether they'll bear it because they have to?

Second, the people we currently take benefits away from are not the lowest income people (who do qualify for the programs), they're the low-middle income people who only just barely don't. If the true consideration is to collect from people who will most be forced to work anyway then shouldn't we be sticking it to the even poorer people who have even less choice? (Of course this runs right back into the first point.)

And finally, if these people need the money so badly then preventing them from earning as much by working legitimate jobs that report their income will cause more to turn to off-the-books income like dealing drugs and stealing in order to make ends meat. Presumably that isn't the work we want to maintain an incentive for.

Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by google15 on Sunday November 22, 2015 @10:14PM (#10612672)
If, in your definition, basic income is neutral on what the marginal tax rate is, then your statement "We already know how to design a program that won't discourage work. It's called a basic income." doesn't make sense. You are trying to have it both ways, making claims about basic income, but when I challenge one, redefining basic income to be broader, while ignoring the fact that the original claim only makes sense for the narrow definition.

See my other post for answers to the rest.

Re:Stereotype of the Lazy Welfare Recipient: Evidence from C... by AnthonyMouse on Monday November 23, 2015 @08:17PM (#10618544)
> If, in your definition, basic income is neutral on what the marginal tax rate is, then your statement "We already know how to design a program that won't discourage work. It's called a basic income." doesn't make sense.

Of course it does, because it's in the context of receiving the benefit. Since receiving the benefit is unconditional, it doesn't cost you money/benefits to take a job or work more hours, unlike with means tested programs which do exactly that.

How the government comes up with the money to pay out the benefit is a separate question because you can do it in any number of ways. Imagine the government pays for the basic income by conquering foreign lands and seizing their resources. Unambiguously no disincentive to work for all the citizens.

Obviously in the real world the money is going to come from taxes. But taxes are separate. All transfer programs require taxes, on top of the effects created by the program itself. Because the method of taxation that has zero effect on the incentive to work is the mirror image of the basic income: Everyone pays the same fixed dollar amount in taxes regardless of income. Using that method of taxation to fund a basic income converts it from a transfer payment to a no-op.

So if your point is that you cannot have a transfer payment without creating a disincentive to work for someone, that is correct, because that is what a transfer payment is: In order to take from those with more and give to those with less, you have to condition at least one of the taking or the giving on the existence of some threshold level of wealth.

But the difference between the program and the tax that pays for it is still quote important, because the people they affect are not necessarily the same people. For example, suppose you want to fund some transfer program using a tax exclusively paid by the top 1% of income earners. Everyone in the bottom 99% therefore does not pay the tax at all and is not directly affected by it. But now the separate choice comes between whether the program is a traditional means tested welfare program or a basic income. The means tested program will provide a disincentive for the 99% to work because the government will claw back some significant portion of the money they earn; the basic income will not, even inclusive of its funding source, because it is not funded by them.