It's time to start embracing the fact that as a civilization we've come beyond the point where we're scrabbling like mad to shake loose the resources for existence, and instead we can now start actually trying to make people, everyone, safer and happier and more actualized.
I'm not trying to be provocative, it's just that you're thinking about this in the wrong way. You can't associate it with any uses that you may think beneficial or worthwhile. You need to accept that it's no-strings-attached money, otherwise you're just going to be disappointed.
I don't mind that it's no-strings-attached money, because I might myself want to blow my allotment on a fleeting pleasure someday.
We need to give up this "keeping up with the Joneses nonsense".
Welfare already exists and while the lazy scrounger stereotype definitely exists, I feel it's worth that overhead to take care of vulnerable people and those in hard times.
Do you feel more confident that a government entity would do a better job at picking a family or students? Or would you only want to do it if everyone at your income bracket was also doing it?
Serious question, not trying to be a dick.
They give it to everybody. If you think that the government does a poor job of allocating the absolutely colossal amounts of money currently spent by social programs, or you recognize that trying to "do a good job" and prevent fraud, and all the other social engineering requires a vast, wasteful bureaucracy, then this is an interesting option.
This is a program that eliminates extreme poverty, but requires almost no infrastructure. You'd only need to verify that recipients are citizens and that they file their taxes. Since you can abolish Social Security, a stripped down social security bureaucracy, which already prevents people who haven't paid into social security from receiving benefits, could take over that task.
It could allow one of the largest and most sweeping reductions in the size of government in our lifetimes.
And if you believe in freedom, but also want to live in a country where people don't have to beg for food, then this is your best bet. You trust people to make their own decisions about what benefits them and their family. You don't discourage work or enterprise.
I think it's a political long shot of epic proportions, but also a great idea.
The fact is, our .gov is doing a pretty shitty job as far as social contracts go, and the incentives for playing nice only exist once you've bought into the thing wholesale and are doing quite well for yourself.
Given the way we treat felons, the poor, and the ill I'm rather surprised things aren't boiling over sooner.
I have never seen anyone advocate for UBI who expressed any position other than support for using it to replace, at a minimum, means-tested poverty support programs, and generally they want it to replace many other targeted social benefit programs that currently provide services, direct subsidies for selected purchases of goods and services, or indirect subsidies through tax credits and deductions for purchases.
The usual argument for UBI is that it eliminates the most of the administrative overhead and duplication of function in the multiple programs it would replace, as well as replacing the perverse incentives that occur with means-testing.
And in any case, I don't think a handful of people donating to charity is a serious systemic solution to inequality and poverty. For one thing, it fails to give a guarantee of a safety net, which is what's needed to give people a believable backstop. For another thing, there's a bit of an adverse selection problem: people who get rich retroactively decide they have no need for the existence of a safety net, and don't want to pay for one, because poorer people are lazy/stupid/etc.
I did move from California to Denmark, which is in a way putting my money towards what I'd like to see more of (due to visas/citizenship/etc. this is not equally easy for everyone). I now pay more taxes, and in return I am part of a more social-democratic system.
And, IIRC, Denmark rates much, much higher on social mobility than the US.
And with universal basic income, recall that there is no 'picking' performed.
If your going to talk about a socialist country you may have a point. But unfortunately I think your going to find you dont have as much evidence as you thought you did, should you do some research.
The most productive level of intellectual growth in the history of mankind has consistently come out of groups of people who have been 'freed' from the burden of worrying about their 'next meal' so to speak. From renaissance era patronage through to the modern trends you see with the flow of capital in California.
Socialized != Socialist.
A centrally planed socialist economy has no place for entrepreneurship at all, ergo it will be suppressed and not flourish. A socialized economy is one where all citizens are invested into the social fabric of society, for instance I have a level of free health care here in Australia, but I choose to work and pay for a higher level of medical care and I am free to do so. This is a socialized system, a socialist one would deny my right to chose a higher standard via some logical argument about the higher standard I want to pay for being excess capacity that should be redistributed to all.
I hope this brief illustration helps clarify some things to anyone else that might be having trouble seeing a clear difference between socialist and socialized.
I think this is general answer to this question (at lest it's mine). It's similar to prisoner dillema: I am happy to agree to rules forcing cooperation but in absence of those I won't cooperate that happily (reasons I think are easy to imagine and I've just seen that one poster did great job explaining those).
The purpose of government, if it can be said to have a purpose at all, is to cover those items where we're better off doing them but they wouldn't happen on their own due to various game theory considerations or just plain transaction costs.
You can do this right now, without having to set up any controversial and potentially corruptible political programs, and have a greater certainty that the funds you supply are actually going to the purposes you support.
I don't understand the mindset that these goals should only be pursued through coercive politics.
At first glance one might think, the recipient now has more to spend, but that amount is taken from others, so it's a break-even. But in fact, the "others" are higher income people, and would spend the money differently.
The poor people relying on the assured income boost total demand for things like food and clothes, while the richer taxpayer would have more likely spent it on either luxuries or investments. A transfer of spending from luxuries to basic items corrects a social balance, and increase of aggregate demand has better outcomes than feeding the supply side.
Yeah, I know I'm questioning something quite basic. Do you (not just you, ds9, but anybody) have any justification for that that isn't a direct quote of Keynes? Because investing boosts the economy (by increasing productivity - Keynes never modeled that, go figure), and spending reduces the potential for investiments, so the picture is at least more complex than that.
Because the economy is the whole set of exchanges of goods and services, and spending is economic activity.
> investing boosts the economy (by increasing productivity - Keynes never modeled that, go figure),
Actually Keynes directly considered not only that investment produced future gains in output, but how those gains changed with additional investement in the same area. [1]
> and spending reduces the potential for investiments
How? If spending by A to acquire a good from B decreases A's funds available for potential investment, it does so only by increasing B's funds available for potential investment by the same amount.
[1] See, particularly Book IV (commencing with Chapter 11) of The General Theory of Employment, Interest and Money (1936).
It’s fair to question whether Orange, SC should be kept alive as a going concern, but this franchise owner was able to employ ~20 people because of the social assistance funds provided to the community. His employees would be able to spend their paycheques, too.
Investments in infrastructure provide much the same value (as in the TVA, which did more for pulling Tennessee out of its deep poverty than anything else). Investments without spending associated with those investments are dead money. While savings should be encouraged so as to reduce individuals’ emergency needs for money, they don't keep an economy going as much as spending does.
(And yes, that pains me to say as someone who doesn’t like our consumer culture even as I participate in it because it’s what we have. I don't have a rightful solution to that dichotomy.)
First, if we define "the economy" as GDP [1] (a generally poor approximation, but still better defined than a vague "the economy" entity), spending tautologically boosts "the economy". It either falls under the "private consumption" or "gross investment" part of the equation.
Now, I'll try and respond to your analysis point by point.
> Because investing boosts the economy
Again, we're on solid ground here if we're considering "the economy" to mean "GDP"
> and spending reduces the potential for investiments
Woah, hold on there. This assertion doesn't make sense from several perspectives. First, the economy isn't some zero-sum game where players must choose between spending and "investiments". Spending by one party can be converted into productive investments by another. e.g. if people start buying a ton of G.I. Joe action figures, the maker of G.I. Joe Figurines can convert that capital inflow into a factory.
In addition, many forms of consumer spending are investments from their perspective. A new washing machine frees productive time that can then be spent e.g. learning a trade. A new car might enable them to find new jobs or reduce their maintenance expenses on their current car.
> so the picture is at least more complex than that.
Right, but generally when parties are producing things other people want to spend money on, the economy is "working". The corollary is that when nobody is willing or able to spend money on new goods, the economy is probably not healthy.
Also, many 'luxuries' are things that eventually become things we need (Tesla Motors?).
Having said that, I Am Not An Economist, so it's possible I Know Nothing.
Also, a question occurs to me. Would this scheme still function at a rate other than 50%? If the billionaires would only allow the scheme with the rate set at 45%, it would change the "zero" point, but maybe not much else?
Consider also that the proportion of people who actually earn an income in many countries is falling already due to ageing of the population. Plus once this guaranteed income is available, it's only going to encourage more to give up working. Personally, I have already given up, even though my available income is substantially lower than the $2800 in the Swiss proposal, and really only covers my basic living expenses. Nevertheless, I value my free time highly enough that I prefer it this way.
I doubt they're that many. Can you give any examples? And in the cases they do, most will be for an exceedingly small number of people.
Even countries people like to consider high tax, like Norway, does not get to 50% other than in extreme outlier examples (if you're an extreme high earner with a shitty tax accountant, has no debts or other means of getting deductions, and spends vast amounts of your money purchasing highly taxed items like alcohol and luxury cars).
If you mean marginal tax rates, then it's a different matter.
But I'd be pretty much nobody has an overall tax bill that approaches the marginal tax rate on their gross income. Norway, for example, has a marginal income tax rate that's 40%, but that only kicks inn on income greater than ~$135,000. Someone who makes $200,000 (about 3 times the national average) still only ends up paying 33% income tax total before deductions. Let's say said person spends $50k/year on stuff that's VAT rated at the full 25% rate (which is frankly unrealistic, and that only adds about 6.25 percentage points to their tax rate, bringing our example person close to 40%.
But if said person pays substantial debt interest (say on a mortgage), they'll also have massive deductions - it'd be fairly unlikely for a person at that kind of income level to end up paying more than about 35% between income tax, VAT and other taxes.
But consider how much taxes would need to rise to pay for the basic income. Let's say 50% of people who are eligible for basic income actually work. Then you'd need to collect two times the basic income from each of those people, on average. Surely this would push marginal, and probably overall, tax rates over 50%. Tax rates this high are only going to encourage even more people to give up working. I suspect such an economy would simply collapse.
It's possible that invention of Star Trek replicators would change things. If people could have all material things they wanted with minimal effort, then I imagine that the remaining work could move to a volunteer model.
Marginal tax rates are the taxes that you pay on additional income. Eg., if I make (rounding numbers recklessly) £9k per year, I am taxed nothing. However every pound I make over £9k is taxed at 15% -- that's my marginal tax rate at the £10k income level -- then there is another step at £20k-something, etc.
For the poor, however, effective marginal tax rate include not only escalations in progressive tax rates, but the withdrawal of social support. Eg., let's say I am unemployed and receiving £700/month worth of benefits. Then I get a job which pays me £800/month. The first £750 is tax free, and I'll have to pay £8 of income tax on the remaining £50, so my total take-home pay is £792. Fair enough, so far...
Except now that I'm earning an income, all my benefits are withdrawn. This means that although I'm now doing £800 per month worth of work that I wasn't doing previously, at the end of the day I'm only receiving (£792 - £700 = ) £92 pounds of additional income. Hence my effective marginal tax rate on the extra income is a whopping 88.5%.
I'd have to think very hard about whether I wanted to keep that job, or stay on benefits. In fact, this is a fairly generous example: many benefits programmes are structured in such a way that they impose an effective marginal tax rate of more than 100% upon people who increase their incomes -- in other words, you can end up with less money by getting a job than by staying on benefits.
This is the mechanism which turns benefits programmes into poverty traps -- by de-incentivising people to work via astronomical marginal tax rates. Unfortunately, people have a very difficult time understanding this mechanism, and their intuitive reaction is often to "fix" benefits programs by increasing conditionalities and means-testing. The problem is that the more conditionalities and means-testing you impose, the more you increase the marginal tax rates for people trying to get out of poverty -- so such programmes are inevitably counter-productive.
A Unconditional Basic Income, however, is never withdrawn. This means that it imposes no penalties for increasing your earnings -- meaning that it actually minimises the effective marginal tax rates.
In fact a very fair basic income could be funded via a flat tax: tax every income at 50%, and then redistribute the earnings as a flat Universal Basic Income. Mean income earners, in this scenario, would pay exactly as much taxes as they receive back from the UBI -- so their tax rate would be zero. Non-income earners would earn 50% of the mean (which is roughly the level that Switzerland is proposing). Billionaires would see their income reduced by nearly 50%. However the marginal tax rate would be identical at every level of income. No matter what your standing in the economy, you would always receive the same UBI, and you would always pay the same rate of tax. It would seem almost fair.