Quote:
Originally Posted by bizaro86
The problem with having it means tested is that the incentives are bad.
Take someone who is getting a $2k/month UBI. If you reduce the UBI by 50% for a dollar of earned income (like the PBO analyzed at the request of a senator) then you have the following situation.
If we assume someone chooses to work to earn extra money over and above their UBI they pay the following:
UBI clawback: 50%
Current Federal Income Tax: 15%
Current Alberta Income Tax: 10%
CPP: 5.25%
EI: 1.58%
So before any new taxes are implemented to pay for UBI (which would absolutely be necessary) with the clawback someone getting their first job faces a marginal tax rate of 82%. At minimum wage of $15, that means that persons effective take home pay is $2.72 per hour. How many people do you think will get out of bed for $2.72 per hour? And it's probably less as taxes would have to go up.
If everyone gets the UBI no matter what the UBI is more expensive, but the marginal tax rate on someone's income is still pretty low, so that person has a much stronger incentive to still work and earn extra money.
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GGG did the math on this and showed what likely changes to the tax system would look like to support this idea. Not only would UBI require a major tax increase, it would require elimination of many social programs everyone gets to take advantage of. How comfortable are people going to be about losing their social security?