> How do people who think a feasible UBI future is possible square with this?

That's backwards. How do the people that run todays pension funds expect to own up to the fact that they've been technically bankrupt for quite a while?

The only reason the pension age is pushed upwards is to mask the fact that the money in the funds required to fulfill their obligations simply isn't there. The easiest way to do that is to start paying out later, a number of folks that would have otherwise been eligible will simply die in the intermediary and those that don't will pay into the pot for a couple more years.

UBI is a scheme that does not involve pension funds at all.

It's worth noting that the above doesn't relate to pension funds but the state pension.

These aren't paid out from a pot but comes from general taxation, the same as presumably a UBI system would.

State pensions are often paid out of a special pot, and not general government funds; in the US, for instance the Social Security Old Age and Survivors (OAS) Trust Fund.

Yes. The problem is that the government tends to take money out of that 'special pot' for general budget shortfalls. It doesn't help that projections for future pension payouts tend to be overly optimistic as well.

This and the fact that when state pensions were getting good returns - they setup guarantees which became liabilities of the state. However, when investments went the other way - the guarantees were still in place. So they get to have their cake and eat it too.

"Very similarly, a simple way to incrementally implement UBI would be to lower the "retirement age" every year."

I suspect when many (not all) of the supporters of UBI consider it to be the most basic of subsistence payments, not something we would want seniors to retire with.

Think of the difference in amounts between SS and unemployment insurance currently.

Then couple the lowering of the retirement age with a lowering of the amount paid out in the early years of retirement, gradually plateauing down to a base UBI level for 40-somethings and increasing to plateau out to a social-security level for 60-somethings.

Well a) SS is barely livable and b) unemployment insurance would actually be a much better proposition if people paid into it.

    > the most basic of subsistence
    > payments, not something we would
    > want seniors to retire with

The full UK pension is £119.30 per week, unemployment benefit (JSA) is: £73.10.

Wow that's nothing. We have state government workers in California getting 90% of their highest salary as long as they live. And some even double dip.

State pension is not the same as the Civil Service pension, which would be equivalent to what you're talking about, and can be very good indeed.

> How do people who think a feasible UBI future is possible square with this?

You have to address the revenue to pay for it, which in most places means ending preferential tax treatment of capital income. Right now, pretty much the whole world has, at any income level, heavier taxation of labor than capital (in the US, higher direct taxes coupled with employer mandates that act as additional taxes; as well as addressing​ direct taxes those mandates need replaced with public social programs so they aren't burdens on employing labor.)

The problem is that capital is mobile, and that mobility is arguably increasing due to digitisation. In other words, if a country raises tax rates on returns to capital, capital simply relocates somewhere else. I've suggested a solution above (or it might be below by now), but it's complex...

> In other words, if a country raises tax rates on returns to capital, capital simply relocates somewhere else.

So, you need to tax value extraction as a condition of allowing firms to do business, ideally rebating that against taxes on locally-realized capital gains so that local capital owners aren't unfairly penalized compared to foreign extractors.

USA already has worldwide tax jurisdiction. The more difficult problem with capital taxation is how to accurately value an asset.

The USA tries to have a worldwide tax jurisdiction, and fails at it

The Large global companies spend millions on ultra complex business structures to avoid US (and EU) taxes.

See GE and Apple as the most publicized examples but they all do it

Oh, certainly. However, if the US political climate ever reaches the point where a wealth tax is seriously considered (something which would require a constitutional amendment), I very much doubt these loopholes would still exist.

That's a problem with ad valorem property taxation, but not a problem with taxing capital income.

    > In other words, if a country raises
    > tax rates on returns to capital, capital
    > simply relocates somewhere else.

Certainly in the UK, money earned abroad is taxed; this is normal, rather than unusual (like, say, in Thailand, where you're only taxed on money you then bring back to Thailand). Although you can do some dodgy dealing with Non-Domicile status, this puts a kink in any simple capital flight.

Even here in the supposedly socialist paradise of Norway capital gains are more lightly taxed than earnings. My marginal tax rate on earnings is 50% but interest or income from mutual funds is taxed at 27%. At least it was last time I looked, not much I can do about either of those numbers so I don't think about them any more.

This is probably wayy off topic, but not having met real life earning Norwegians (traveling students don't count): how does it feel to be giving away half of what you earn to the government? I'm trying to phrase this question as blandly as possible; don't mean to be snarky or anything. My own political philosophy has been migrating from something far-right to more center, but this is one issue that does bother me very much...Specifically, the feeling I have is: I worked pretty damn hard to get to a situation where I can make the kind of money I make now, and almost 20% goes away in taxes to the US federal govt. (not including Social Security and Medicare). I was born into a poor family so it seems rather egregious that my hard work, my blood and sweat is ultimately to be used for the benefit of people who are not, well, me.

Answering as a fellow Norwegian: I gladly pay my taxes - the beneficiaries of these taxes are the community as a whole, including myself. I don't have to worry about going bankrupt if I ever get any serious health issues, for instance. There's also the issue of social security, which not everyone is a fan of. But giving people a decent economic baseline / safety net should mean they e.g. won't have to resort to crime to stay afloat. It may also reduce tensions, although I can't say that for sure (some of my old friends get social security, and they're feeling disenfranchised due to a lack of real opportunities). I get the impression that some people think that taxation is basically money being stolen from them and being given to someone else - isn't that a somewhat gross misunderstanding?

I don't pay 50% tax in Germany but I probably pay more than you.

I don't mind it because:

1. I get great services for my tax money (health services practically free, good transit, good schools, higher education is free to cheap, daycare/kindergarten is so cheap as to be basically free). I was paying a bit less taxes when we lived in Israel but ALL public services were worse in a greater margin than the difference in taxes.

I recently had to go through some fairly major health related treatment and both the treatment and substantial hospital stay were practically free of charge, I didn't have to think about the financial aspect of it at all (despite being self-employed).

2. even tho i worked hard to get to where I am I still enjoyed a great deal of privilege: i grew up to middle-class parents who taught me that education is important, my family helped support me through college, I had role models of succesful people around me as a child, I grew up in a relatively safe and nurturing environment, etc.

I am sure an ethnic minority growing up to working-poor parents in a backwater periphery would have a much harder time achieving what I did or even knowing what to achieve, and yet it is no fault of their own that they were born to such circumstances. So I don't mind funding public schools/healthcare/infrastructure/welfare to make sure these kids get at least the basics at a level closer to mine, and are more likely to get ahead in life instead of being trapped in generational-poverty.

maybe the issue is that you don't feel your government is spending tax money wisely? IMO the solution there is to replace the government not reduce taxes.

having experienced both systems for many years it's obvious to me the welfare state gave me much better quality of life & safety, despite being a well-earning software developer who pay a lot more into the system than what I (explicitly) take out of it.

Remember, though, that 50% is the marginal tax rate. I don't know the tax brackets in Norway, but only income over X amount will be taxed at that rate, the first X will have a different (series of) lower rates, and generally the first Y amount has 0% tax, for some small-ish Y. This means that his amortized tax rate is less that 50%, maybe even much less if income is only a small amount over the X threshold for 50% tax.

Actually now, 46,72% is the highest marginal rate, see http://www.smartepenger.no/faktabank/skatt/635-marginalskatt....

You have earn over NOK900k to pay that, about USD105k.

Tax on capital gains is now down to 24%.

I should have looked those numbers up earlier.

As a Canadian I can safely say I pay about 50% of my earnings in various taxes.

I don't mind too much because I never really see the money, and I get useful government services out of it for the most part. Would I like my taxes to be lower? Sure. But I see the benefit to society my taxes bring.

> Very similarly, a simple way to incrementally implement UBI would be to lower the "retirement age" every year

Why would you first give UBI to the richest people (old people at the peak of their careers with a lifetime of savings)?

Sounds backwards to me.

You'd give UBI to those least able to work and generate an income.

Then it's not "UBI". The "U" stands for "Universal", and the lack of conditionalities is the most important factor in not creating the perverse incentives of existing benefits systems -- eg., rewarding people for not working.

They don't need an income; they have paid-off houses worth $1.2m that they picked up in 1972 for $100k.

But now who can buy that house for $1.2m, and in 30 years will it have increased in value by 10x again? I feel like this is why an increasing number of people are locked out of the housing market. But as we learned, prices don't increase forever...

>who can but the houses?

Rich people from other countries. Especially places where money isn't made cleanly?

Not sure why this was downvoted.

This is a gross generalization. Not everyone was a solidly middle class worker for their entire lifetime, and not everyone thought to save for retirement. Before you studied it, did you have any idea at all how expensive retirement would be?

Think about it: If someone didn't save their whole life because they assumed social security would provide for a good life, but then they discover that SS hasn't been increasing much at all and the quality of life SS provides is terrible, what are they supposed to do? Suffer? Just because a portion of their generation saved?

All those retirees living off investments will be paying more in capital gains to subsidize the UBI, way in excess of the amount paid out to them to maintain the universality.

In Canada there is no capital gains tax on primary residences. In the US, $500k is exempt. I imagine the laws are similar in most parts of the world, no?

If we were to get rid of the capital gains exemption, housing might become more affordable.

> By 2028, the age will rise again, to 67.

They could just set the age at 80 and be done with it. Funding problem solved! /s

>> In 2010, British women got their state pension at 60 and men got theirs at 65. By October 2020, both sexes will have to wait until they are 66. By 2028, the age will rise again, to 67.

>How do people who think a feasible UBI future is possible square with this?

Because this was done to calm down the markets. The debt is approaching 100%.

UBI is very simple if you allow the state to acquire capital and cultivate it in a sovereign wealth fund. Imagine, for example, public ownership of 50% of the most valuable real estate in the country, which is then rented as usual.

You don't need sky-high taxes when there's income from capital to distribute.

Using taxes to crowd out investment markets...can't go wrong there.

In Norway, apart from the well known sovereign investment fund investing abroad, the state also owns shares equivalent to about 1/3 of the total value of all companies listed on the Oslo Stock Exchange. I'm sure you can go wrong there, but it clearly is also possible not to, as this model has worked quite well so far.

At least a state investment fund is in for the long term. This is better for the company than a bunch of short-term hedge funds which only seek to bleed the company dry.

Taxes, with preferably much more progressive rates.

The pension age depends on the number of people of working age and their tax rate. Population growth is slowing down, so the options are to increase taxes or the retirement age.

And not even try to think to tax business! Tax constantly shrinking in % working population. /s

The biggest problem, one where the trend is running in the wrong direction, is how to fund UBI. If we assume that labour will be increasingly replaced by capital in the future, then I think this ultimately comes down to the following question: how do we tax increasingly mobile capital? I'm reposting here, but it seems particularly relevant. Because of the relative (and increasing) mobility of capital, countries have incentive to undercut each others' taxes on capital, to attract that capital into their country. There seem to be two directions we can go in:

1) Give up on corporate tax and shift the tax burden on to less mobile bases (e.g. land, consumption). This scenario seems to be slowly playing out across the developed world. I'm not sure this could fund UBI, and does little to mitigate the negative effects of capital accumulating in fewer and fewer hands.

2) Engineer some kind of grand international agreement on corporate tax rates: a 'Bretton Woods areement for corporate tax', if you will. This would be necessary because there's such a strong incentive for countries to 'undercut' each others' corporate tax rates (to attract foreign capital investment, tax havens being the extreme example of this). Such an agreement would require: a specific agreement on minimum corporate/capital tax rates, the participation of countries representing the bulk of the world's production output, and provisions that levy punitive tariffs on non-complying, and non-participating, countries that go below the minimum rate.

I've long thought option 2 to be basically impossible. But I've begun to wonder about this. In a strange way, Trump's presidency might be the golden opportunity. He seems to be just the right amount of crazy to do it. I couldn't imagine an 'establishment' president going near something like this. And I think only the US could lead such a process, maybe with some quietly pre-agreed support from China. Given the capital flight China is currently plagued with, their precarious public finances and their main central banker publicly stating support for some kind of international agreement on capital controls (he explicitly invoked Bretton Woods), it seems like a few stars are aligning. I imagine the Chinese communist party is also acutely aware that if the music stops, their Bastille will get stormed.

It's a tricky proposition though. It would have to be 'sold' skillfully. Essentially, we would need to convince the (marginally) most powerful in society (government) that they are about to be eclipsed by another group (capital owners). Perhaps our 'automated future' is the narrative to go with. Something like: As labour is replaced with algos/robots, then by definition production becomes more capital intensive. So more and more of the gains from production and trade accrue to a fairly small group of capital owners.

It's conceivable that, in the not too distant future, some of these mega-corporations will have net incomes that rival that of even large, first-world governments. At this point, they will pose an existential threat to liberal democracy as they will have the means to overcome the will of the majority and even the most co-ordinated resistance (i.e. by employing a large 'private security force'). Not to mention the immense soft-power they will wield given they will control most of the world's means of production.

So, although this may all sound crazy, it would be unwise and dangerous to allow things to reach a stage where liberal democracy is imperilled by this concentration of wealth. Therefore, we must tax corporations/capital in a way that leaves them nowhere to run (i.e. via an enforced international agreement on rates). A fair chunk of this revenue should be redistributed to (former) workers in the form of basic income in the interest of public welfare and social stability.

It's good populist policy too, something that Trump seems well suited to selling (although he'll face significant opposition from those suckling on the corporate teat i.e. mostly everyone, including the 'mainstream' media).

Note: I'm not really keen on emotive arguments like the above, but I think some version of the above is what it would take to sell a radical proposal like an international agreement on corporate tax rates to sustainably fund basic income. Although not exactly a 'glorious revolution', it probably beats the hell out of living in a world that has become a giant company town.

Trump will not engineer any international agreement on corporate tax, or increase taxes on capital in general.

I am expecting a deal later this year or early next year for US corporations to be able to repatriate their overseas cash piles in exchange for significantly reduced taxes on that cash. I'm guessing a majority chunk will end up in share repurchasing and M&A activity rather than job creation.

https://www.forbes.com/sites/joeharpaz/2017/02/06/inside-tru...

UBI does not work mathematically. I posted this a while back, so I'm just copying and pasting from an older response:

Simple back of the napkin math is that based on the 2013 census, we have 242,470,820 adults living in the US. If we pay each of them $12,000 per year, that's $2,909,649,840,000 in additional mandatory spending every single year. That's more than Medicare and Social security combined, and that has no cost of living adjustments built in. The basic math shows that this idea is simply unrealistic as far as I can tell.

UBI in the amount that could be considered a basic living income is infeasible with the current state of the world even if you were to double the tax rates as I would imagine most people in the US can't live on 12K and still be able to have the day to day basics required for living.

UBI is a redistribution expense, that means, the government takes taxes from richer people, and distribute it to everybody.

Retirement is an entitlement pyramid, that means, people pay the government for it to take care of older participants, and by doing so they get entitled into receiving something in proportion to what they paid.

Besides it being a pyramid, a UBI scheme where total received is proportional to total paid wouldn't work either. Yet, none of that means that UBI wouldn't work, those are completely different.

>UBI is a redistribution expense, that means, the government takes taxes from richer people, and distribute it to everybody.

It does not have to be. I take a Georgist view of the topic which when applied to UBI can create system based on Commons Rent.

Commons Rent would be fees on Natural Occurring Resources things like Extraction of Minerals, Forests, Fish. Fees on EM Spectrum (our current model of "selling" the EM Spectrum needs to end), geosynchronous orbits, air corridor usage (which can be very profitable in the coming age of Autonomous Drones). Pollution fees aka carbon taxes or other such fees.

Included in that would be Land Use Fees, and many other things not listed herein

It does not have to be a "take from rich, give to the poor" situation, it however does change the traditional attitude of natural resources as the marketable private property of the first person to discover them.

>Retirement is an entitlement pyramid, that means, people pay the government for it to take care of older participants, and by doing so they get entitled into receiving something in proportion to what they paid.

No it isn't. Retirement benefits have nothing to do with 'paying in' or 'investing' or some sort of 'fund'.

> Retirement is an entitlement pyramid, that means, people pay the government for it to take care of older participants

This is news to those who retire and live on investment income.

In the US at least, almost half of elderly would be living in poverty but for social security. Most are not retiring and living off of investment income.

That does not detract from the truthfulness of my statement.

Investment income depends on a functioning, growing economy.

Even just maintaining stored retirement wealth depends on this. Think about prices for services when there are large numbers of rich retired people with needs, but few young people willing to provide them.

The answer, of course, is automation. Granted, a ton of thing may just not be possible with robots. But I expect that, just like Oil was the resource that boosted humanity, AI (and modern medicine) will be the resource that comes to aid the elderly as demographics rapidly change.

It does not depend on a functioning, growing economy at all. TIPS and Series I savings bonds require the U.S. Govt to not default on its obligations. They preserve purchasing power.

Ubi is going to depend on a mass uprising of the have nots vs the haves. But there is plenty of resources to go around. The problem is the wealth is concentrated in the hands of very few people.

How much is the monthly UBI in your plan?

This is the most racist thing I've seen on HN all week.

Your suggesting that white people in the UK are simply going to stop having children? Or, that in 70 years there simply will be no white people left in the UK?

I'm feel pretty confident that the chart doesn't suggest what you're saying - but then, I'm not entirely sure what exactly you're saying.

Demographics are destiny and if the population of a country is replaced, then it seems a tautology that the new country will resemble the replacements rather than the replaced in many ways. I wasn't being facetious that there is in fact a retirement program in Zimbabwe, and listening to Rhodesians in the 1950s talking about their Rhodesian retirement plan for the then very distant 2010s is likely to be as pointless of a discussion.

The "why" and who's behind it is I'm sure a fascinating off topic discussion but the UK government's own rather linear chart of % non-UK school children vs year the data was gathered has certain implications, if the linear trend continues.

"demographics are destiny", what is that? i believe i've heard it a few times recently. sounds like a new-fashioned "white is right", with the benefit of sounding like something intelligent to an imbecile. but if demographics is destiny, then it's good more brown people are moving into europe. twice in the last century, with so many white people on the subcontinent, europe dissolved into mass barbarism and pulled much of the world into it as well. if demographics are destiny then the migrants flowing in are a blessing. if demographics are destiny, which why the fuck someone should believe that, i don't know.

> so many white people on the subcontinent, europe dissolved into mass barbarism

Part of the Nazi ideology was the idea that Slavs were ethnically inferior and therefore the Nazis felt justified in trying to slaughter them and take their land. In just the same way that colonists had taken Africa, America and Australia. It's just fortunate for them that the Russians had tanks whereas the American Indians or Belgian Congolese etc didn't.

>twice in the last century, with so many white people on the subcontinent, europe dissolved into mass barbarism

And of course the people in the middle east have been so peaceful in the same time period.

I don't agree with the parent's hypothesis that white people have some inherent instinct to start world wars when there are too many of them, but to answer you assertion: while there have been many many disasters in the middle east, they still don't come to the same scale as the destruction caused by the World Wars (and resulting Civil Wars and instability).

This has to be the weirdest thread I've seen on HN in some time. Ignoring all the race and world war stuff, look at Californication as applies to lifestyle in Oregon. I'm not making a moral or ethical argument merely an observation that demographically replacing the population of Oregon with California people, results in a "northern california" lifestyle in the state formerly known as Oregon. So if you think you're going to live in Oregon with an Oregon lifestyle and retirement package in 50 years, you are in for a big surprise when there is no Oregon anymore, merely "north california".

https://en.wikipedia.org/wiki/Californication_(word)

Given the observed rates of demographic change, it seems very foolish to expect the "gold pocketwatch and pension" of 1950s to continue in perpetuity in the UK or Europe in general. For example when Europe goes full on Islamic how does Sharia law work WRT legacy 1950s era western pensions.

You can't wipe out a population, replace with another demographic, and pretend magic dirt means nothing else will change. Look at the lifestyle in Jewish Ghettos in Poland and Germany before and after the Holocaust for an example. Or look at Manhattan island two hundred years before the euro colonists vs two hundred years after the euro colonists. Thats all I'm saying. Regardless of right or wrong we're waving goodbye to what was Europe and it seems extremely foolish to assume legacy euro retirement programs will exist in the future due to magic dirt.

It's the "wipe out a population" thing that I'm getting hung up on. Certainly, state pensions are increasingly problematic, but your assertion of cultural extinction is jarring - very 'Camp of the Saints'.