Re:Policies that make the poor less poor
by dragonwriter on Monday June 21, 2021 @04:30AM
(#27577332)
Stimulus payments (particularly, the enhanced jobless benefits) are not like UBI, they are essentially means-tested welfare. Like means-tested welfare, you lose them rapidly by gaining outside income, eliminating (or reducing) the benefit of the first big chunk of outside income you gain if you are currently receiving them. That’s exactly the perverse incentive in means-tested welfare that UBI removes, you “lose” benefits only at the rate of marginal taxation, which (especially at the low end) is much slower than the rate at which means-tested welfare programs reduce benefits with additional income, making additional income opportunities more attractive to pursue for UBI recipients than means-tested welfare recipients.
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Another way to look at it:
For a low-wage earner today, the choice is:
* Don't work, get $300/week * Work, get $400/week
Depending upon circumstances, many find the former option better.
But UBI is proposing an option like this:
* Don't work, get $300/week * Work, get $280 + $400/week
With this kind tradeoff, many more will chose latter option.