Won't higher taxes here in the US drive more and more business overseas (specifically to China) and further exacerbate the problem of income inequality?

We already see corporations keeping massive amounts of capital overseas because of high tax rates. That money should and could be here in the USA.

What value exists in bringing that capital back "in" to the USA if it provides no benefit to US citizens in doing so?

Its almost impossible to bring in wealth and not have it benefit people.

People dont keep their trillions of dollars under the mattress. Its invested.

>Its almost impossible to bring in wealth and not have it benefit people.

Tell that to Bernie and Trump supporters so they can all pipe down.

I agree, but the theory goes that eventually tax havens will disappear. Europe would probably adopt UBI along with us. So those lower rates would go away. China would do something similar or would be too scary for westerners to fully flee to. Right now many companies are fleeing to Europe for better corporate rates while their C level employees benefit from lower personal tax rates in the US.

Or some countries will take advantage of these fleeing westerners and keep their tax rates lower than the US

True. Then the US has to lower its rates or the low tax company has to increase due to social unrest. We see this with China. The rising wealth of the writing class is causing party increases. So large that work us coming back to the US or to other south Asian countries.

Or any enterprising country will keep their tax rates low and take all the manufacturing business. Go figure.

businesses would look at total operating costs. Taxes are increased but payroll is decreased. It's a win if you can structure it such that the savings in payroll are greater than the increase in tax.

This is one reason why a UBI really needs to be attached to something that can't leave the country, namely a land-value tax.

Yes but it won't matter because the newly displaced workers will receive basic income!

That's a most of why I'd like to fund GBI in part with a land-value tax.

Empirically, no. Or at least not to the extent that many people fear. Many businesses are headquartered in NYC, despite the city's extra taxes.

They may be "headquartered" in NYC, but they're domiciled in Delaware, Nevada, etc. and their production facilities are located in China or Indonesia.

They still employ a large number of New Yorkers.

And it's not just New York. Take any major city. Better employee productivity balances the higher costs. Not always, so some companies relocate. But many stay.

Playing devil's advocate, what happens to businesses in the presence of an even higher regulatory and tax environment and what will the impact of increased taxes be on employment and business viability as well as the cost of living?

For the sake of argument, think about businesses with razor thin margins like restaurants. In the presence of increased taxes, their margins significantly diminish, if not vanish, and it becomes increasingly unviable for the business to stay in business. Once they shutter their doors, the tax base and employment decreases. Extending the argument, consider other organizations that have a healthier margin and are growing and hiring. The presence of substantially increased taxation raises the costs of growth (re: hiring) and raises the costs of employing Americans and earning money in America which reduces their ability to compensate employees / develop new products etc. Yes, they might have the margin to pay the increased tax rate, but the tradeoff is they lose money that goes into R&D, increasing salaries, hiring more people, and other business activities we think are good and useful.

As a consumer, I'm also curious to know what this does to my cost of living. Prices will not stay static and if businesses are incurring higher costs to produce goods and services, those get reflected in price. Given wages aren't keeping pace with inflation, what will a sudden price shock do to the cost of living in the face of businesses adjusting prices to address the new taxes? This could take people who are getting by now and turn them into a new wave of impoverished as necessary goods and services increase in price or it could prevent UBI from achieving its goal because prices keep rising to offset the tax rate which puts goods and services outside what people can afford on UBI.

Most restaurants derive most of their cost from labor. With basic income in and minimum wage out, you can pay people much less than you had to before. Yes, you may pay more in taxes, but that's from profit after everything else has been taken care of.

So if you end up with less total profit than before, it sucks, but your control over the situation is far more variable than if you had to simply suck it up and plan to pay your $9.00/hr dishwasher at least $15/hr in three years.

> Most restaurants derive most of their cost from labor. With basic income in and minimum wage out, you can pay people much less than you had to before.

That's plainly false.

No one's going to wash dishes at Chain Restaurant #12 for 15 cents an hour, not even if the government is giving them $10,000/year. Infinite increase in their current effort for a 1% increase in annual income?

That's like the most pathologically slanted example of diminishing returns possible.

$5 per hour to double their income though? You'll have takers there.

Point missed, read my reply to the other comment.

It's the opposite. The utility of money decreases as the amount of money owned/earned goes up. $9/hr to a person without basic income is worth more than $9/hr to a person with basic income.

Now people need more money to gain the same utility as they could have previously gained without basic income.

Why would people wash dishes if they didn't need to pay the bills?

I think there's a lot of untapped utility in better quality jobs, that doesn't get explored at the moment because people's first priority is getting enough money to survive.

Maybe no one wants to wash dishes (so buy a machine), but I imagine quite a lot of people actually enjoy being waiters, since you get to be directly helpful to a lot of people every day.

And now you're not afraid of being fired, you can even start to negotiate about the parts that suck. Obnoxious customers? Hey that restaurant down the street pays a bit less, but they're also willing to throw people out for being jerks. Maybe not going home upset once a month is worth a lot more to you than a new TV.

Things like this might not even cost the business very much, but they've never considered them because people take what they're given.

Sure, a dishwasher might not need to work to pay for rent and heat, but...

Can they afford nice clothing to attract people they like?

Can they save up for college? For their kids?

Can they play the latest games? See the latest movies?

Do they enjoy cigarettes, alcohol, or other recreational drugs?

Do they like to eat out?

Do they want a higher standard of living when they "retire?"

People would be less willing to work for those goods than for rent and heat, so employers would have to pay higher wages.

Those people sound useless. The same way its less expensive to house the homeless than to chase around with cops, I feel like its better to just pay them to stay in their own little world.

Does the delta between lowering the cost of labor (assuming people will work for the lower wage) cover the tax increase?

Labor, in the service industry, is already handled like a variable cost. If you expect a rush, you increase the number of people on the shift and if you don't, you schedule the bar minimum. If there's mismatch between staffing and projected work - and say schedule too many people for what turns out to be a dead shift - they get sent home. Changing the minimum wage from $9/hr to $15/hr reduces the number of people you can run per shift and keep your costs the same (assuming all other inputs continue to cost the same). I.E. It costs me $30/hr to keep two waiters when I could run 3 for $27/hr so I cut back one waiter per shift.

Where the business gets in trouble, in terms of survival, is the price of fixed inputs. They need to buy goods and services that will fluctuate in price and if the cost of doing business goes up due to higher fixed costs in the form of taxes, those costs will reverberate through the chain. The food supplier will raise prices, the restaurant will need to raise its prices to afford the food, which will impact their ability to attract customers which impacts their ability to derive revenue to pay the food supplier, their tax bill, and so forth.

Similarly, if businesses are having to charge higher prices and wages are depressed due to UBI + <other wage>, will people have the money to afford goods and services at the higher rate?

> For the sake of argument, think about businesses with razor thin margins like restaurants. In the presence of increased taxes, their margins significantly diminish, if not vanish, and it becomes increasingly unviable for the business to stay in business. Once they shutter their doors, the tax base and employment decreases.

That's a big assumption. As long as there is demand in a free market, they will stay in business and prices will adjust accordingly.

Or not, since they might get more business from all these people who now have a minimum income. Also consider that the trend is for operational costs to go down with continued automation of the whole production chain.

The OP's point about certain businesses disappearing is valid. Just as an example, pizza parlors may disappear. Instead that demand will be satiated by highly efficient instant delivery services (with no storefront and almost no staff) or perhaps not at all. Do you see many elevator attendants lately?

Also to be clear, we're not talking about anything remotely like a free market.

Wouldn't it be a better idea to have unions, and have them negotiate shared ownership?

It seems that some people have already solved the problem with dividends in companies they own part of.

What happens to the people who can't get jobs to begin with? Also, does this make it harder for companies like McDonalds to higher people, if they are worried that the employee might be a future claimant?