Re:Sympathy for the Luddites
by dragonwriter on Friday June 14, 2013 @07:23PM
(#5883116)
> Sure, but who decides what the right number is for a basic income? No matter what number you pick there will be a portion of the population who sees that number as "good enough" and will cease to work.
This is, to an extent, self-controlling because people opting out of the labor pool decreases the size of the pool, increases the market-clearing price for labor, and increases the incentive to opt in to the labor pool.
The other thing is that it gives people more freedom to undertake speculative efforts (you still need to get funding to meet any costs of the effort itself, assuming that basic income isn't high enough to provide a surplus that can be used for that purpose, but you don't need as much savings to meet your own living expenses while undertaking a speculative effort.) Opting out of the conventional labor market doesn't necessarily mean opting out of work.
> This is good as it reduces the supply of labor, thus increasing the wages of those who do work. But it also reduces the amount of income available for taxation, as this basic income isn't taxed.
Its not clear that this is the case: sure, those who opt out of work will no longer be paying income taxes, but, as you note, wages for those who work are driven up by supply -- which also increases the total amount of income taxes paid by those who work. What effect this has in total is unpredictable; it seems intuitively likely that overall labor-derived income would drop, which would be expected to drop income tax revenues in a flat tax regime, but its also likely those dropping out would be on the lower end of the labor-derived income scale, and in a progressive tax system, that, combined with increased wages for workers, could still increase overall income tax revenues.
This is, to an extent, self-controlling because people opting out of the labor pool decreases the size of the pool, increases the market-clearing price for labor, and increases the incentive to opt in to the labor pool.
The other thing is that it gives people more freedom to undertake speculative efforts (you still need to get funding to meet any costs of the effort itself, assuming that basic income isn't high enough to provide a surplus that can be used for that purpose, but you don't need as much savings to meet your own living expenses while undertaking a speculative effort.) Opting out of the conventional labor market doesn't necessarily mean opting out of work.
> This is good as it reduces the supply of labor, thus increasing the wages of those who do work. But it also reduces the amount of income available for taxation, as this basic income isn't taxed.
Its not clear that this is the case: sure, those who opt out of work will no longer be paying income taxes, but, as you note, wages for those who work are driven up by supply -- which also increases the total amount of income taxes paid by those who work. What effect this has in total is unpredictable; it seems intuitively likely that overall labor-derived income would drop, which would be expected to drop income tax revenues in a flat tax regime, but its also likely those dropping out would be on the lower end of the labor-derived income scale, and in a progressive tax system, that, combined with increased wages for workers, could still increase overall income tax revenues.