Universal Basic Income/Andrew Yang Discussion

[CliffFletcher]

double post

[Harry Lime]

The disconnect between CERB and UBI is that you would recieve the UBI irregardless of whether or not you are working. The way that CERB is set up you lose CERB if you are making more than $1000/month. So to make it worth going off of CERB, you need to be making more than $3000/month to at least come out even.

In reality, if the employees at Indes store were making less than $4000/month, it would not be worth coming back to work. It would make more sense for them to simply find a job where the business was ok not going over the $1000/month limit.

This is the worst part of CERB, but it would not be there in UBI, and therefore is not a factor.

[blankall]

Originally Posted by FlamesAddiction

Someone accepting UBI shouldn’t be offered credit. Easy credit is a big part of the reason upward class mobility is so difficult, even if it gives the opposite facade.

I thought the idea was to give everyone UBI. Hence, the "Universal" aspect of UBI.

[Leondros]

Lets pretend you make the following amounts per year in Alberta and pay the following taxes for 2020:

Person 1) $0 (0) or $0
Person 2) $20K (9.17%) or $2K; Net $18K
Person 3) $80K (25.54%) or $20K; Net $60K
Person 4) $200K (33.03%) or $66K; Net $133K

Lets lets assume tax rates go up by about 15% bottom line. I am going to assume the UBI is $20K. Everyone gets UBI, and I am going to assume UBI is taxable, but under the UBI threshold (ie. $20K) does not have tax (likely through some sort of credit)

Person 1) $20K (0) or $0; net $20K
Person 2) $40K (24.17%) or $10K; Net $30K or $12K more than non-UBI
Person 3) $100K (40.54%) or $41K; Net $59K or $1K less than non-UBI
Person 4) $220K (48.03%) or $106K; Net $114K or $19K Less than non-UBI.

Can you can see there is wealth distributing happening at a certain level. In this example is appears around the $90 - $98K range. Anyone previously making $75K or lower is going to have a net benefit from UBI (more money in there pockets). Where the distribution is hammering people is anyone in the higher brackets. Fundamentally I have no issue with this.

The issues are:

1) Anything in that $20 - $45K range could disincentivize people to work leading to issues in those lower level jobs (ie. Janitorial, fast food, etc.) finding people
2) The huge tax increase on the 'professional' level range of careers such as doctors, accountants, lawyers, engineers, etc. could result in a mass exodus to a country with a more favorable tax regime resulting in a brain drain and lower tax pool
3) A 15% increase in tax rate likely doesn't even get us to a supportable UBI at $20K so we either need to be far more efficient with infrastructure spending (hope you like pot holes and traffic issues), education spending (likely less secondary education grants) and healthcare spending (good luck with that unless we privatize it which defeats the whole premise UBI).
4) There is also significant inflation risk from an economic stand point. I don't see this as an unmitigatable risk, but it still could result in a lot of the basic costs increasing as more people have more access to money

These are just the tip of the iceberg. I think we also have a lot of intangible issues such as addicts with more access to money which is likely an increased drug market.

I also think we should bring up that money doesn't solve all social issues. We can point to many of the Indigenous Reservations that have always had some form of UBI (annual payments from the government) that has actually made the issues worse. With a UBI you would still need strong programs to steer people with these issues in the right directions and quite frankly I question whether we could afford to keep those around while paying the $20K per year.

[FlamesAddiction]

Originally Posted by blankall

I thought the idea was to give everyone UBI. Hence, the "Universal" aspect of UBI.

People could opt out of receiving it. For people making a decent salary, there would be incentives to opt out (such as being able to get credit for luxury items).

[V]

So you don't get the 20k and you pay the higher taxes to support everyone else getting it? Who's going to do that? Based on the post above yours, I'm already losing a bunch of money when I take the UBI. Why would I give up even more?

[GGG]

Originally Posted by FlamesAddiction

People could opt out of receiving it. For people making a decent salary, there would be incentives to opt out (such as being able to get credit for luxury items).

That’s adding costly regulation which is the antithesis of a UBI.

Many of these proposals are Just increasing welfare from 6k to 20k per year.

[FlamesAddiction]

Originally Posted by V

So you don't get the 20k and you pay the higher taxes to support everyone else getting it? Who's going to do that? Based on the post above yours, I'm already losing a bunch of money when I take the UBI. Why would I give up even more?

You wouldn't being giving up more, you just wouldn't be taking extra money that you don't need.

Do you really think people with household incomes of $80k+/yr are going to decide to forgo buying cars, properties, an other items that require credit, just to get the UBI, which would be insignificant to their lifestyle? Maybe some really miserly people would, but I can't see a lot of people doing it.

[GGG]

Originally Posted by V

So you don't get the 20k and you pay the higher taxes to support everyone else getting it? Who's going to do that? Based on the post above yours, I'm already losing a bunch of money when I take the UBI. Why would I give up even more?

It is probably more palatable to give you 20k and raise your taxes by 40k then just to raise your taxes by 20k.

That’s how the math would work out anyways for anyone above a certain income.

[Leondros]

Originally Posted by FlamesAddiction

You wouldn't being giving up more, you just wouldn't be taking extra money that you don't need.

Do you really think people with household incomes of $80k+/yr are going to decide to forgo buying cars, properties, an other items that require credit, just to get the UBI, which would be insignificant to their lifestyle? Maybe some really miserly people would, but I can't see a lot of people doing it.

And how to you propose we create a system of regulation and compliance to ensure that anyone taking UBI is complying with your suggested rules? CRA has already been failing miserable at tracking CERB, what makes you think it can do this with UBI. And by the way, we also would likely be cutting their budget as part of measures to afford the aforementioned UBI...

[Weitz]

Originally Posted by FlamesAddiction

You wouldn't being giving up more, you just wouldn't be taking extra money that you don't need.

Do you really think people with household incomes of $80k+/yr are going to decide to forgo buying cars, properties, an other items that require credit, just to get the UBI, which would be insignificant to their lifestyle? Maybe some really miserly people would, but I can't see a lot of people doing it.

So if you take UBI and don't need it you get a credit hit?

[V]

Originally Posted by FlamesAddiction

You wouldn't being giving up more, you just wouldn't be taking extra money that you don't need.

Do you really think people with household incomes of $80k+/yr are going to decide to forgo buying cars, properties, an other items that require credit, just to get the UBI, which would be insignificant to their lifestyle? Maybe some really miserly people would, but I can't see a lot of people doing it.

I'm really confused, but I think you and I have a different idea of what Universal means.

[V]

Originally Posted by GGG

It is probably more palatable to give you 20k and raise your taxes by 40k then just to raise your taxes by 20k.

That’s how the math would work out anyways for anyone above a certain income.

Right, that's the only way I can see a universal benefit work. You have to give the 20k to everyone, and you have to tax everyone to pay for it.

If I understand Flame Addiction at all (and I'm probably completely missing his point), the administrative burden on a non-universal UBI would be an absolute nightmare.

[blankall]

UBI under our current system is just wealth redistribution. It's no different than expanding the current welfare system, which is already teeming with abuse.

In order for it to actually work, you need a system where labour is largely no longer required and the work is being done by government owned machines. In other words, at this point, it's science fiction. It's a good philosophical talking point, that can spur on conversation about inequality and ways to improve our current system. However, it's an ideal that would be a huge disaster if implemented.

[blankall]

Originally Posted by GGG

It is probably more palatable to give you 20k and raise your taxes by 40k then just to raise your taxes by 20k.

That’s how the math would work out anyways for anyone above a certain income.

Another major issue is that high income earners are rarely strict employees. Most have their incomes sheltered in corporations. Once again, we'd be adding another burden on the working middle class.

It'd probably be a better idea just to overhaul the current private corporate system, increase property and consumption taxes, and implement estate taxes if you want more wealth distribution.

[PepsiFree]

Originally Posted by V

Right, that's the only way I can see a universal benefit work. You have to give the 20k to everyone, and you have to tax everyone to pay for it.

If I understand Flame Addiction at all (and I'm probably completely missing his point), the administrative burden on a non-universal UBI would be an absolute nightmare.

Apologies if this has been explained (big thread) but if you give everyone 20k, and tax everyone to pay for it, I ASSUME the richest people would lose some money, and the poorest people would gain some money, and it would even out somewhere in the middle, but where is that middle based on the expected tax rates? Like I know if you upped the tax rate 20% then 100k would be break even with a UBI, but I guess I’m curious what the actual expected tax rate to pay for this would be and what the break even salary would be (again, sorry, I know it’s probably been mentioned and the math is fairly simple with that number in hand).

[blankall]

Originally Posted by PepsiFree

Apologies if this has been explained (big thread) but if you give everyone 20k, and tax everyone to pay for it, I ASSUME the richest people would lose some money, and the poorest people would gain some money, and it would even out somewhere in the middle, but where is that middle based on the expected tax rates? Like I know if you upped the tax rate 20% then 100k would be break even with a UBI, but I guess I’m curious what the actual expected tax rate to pay for this would be and what the break even salary would be (again, sorry, I know it’s probably been mentioned and the math is fairly simple with that number in hand).

Under our current system, as soon as you implement increased taxes, the tax base decreases.

1. Private corporations have associated costs. There's a level of income where it becomes more economically viable to start a corporation. As you increase taxes, that point becomes lower.

2. As you increase taxes and benefits, the incentive to work becomes lower. That applies at both the very high and low end of the spectrum. High earnings, who are not incorporated, have less incentive to work extra hours, when their income is taxed at marginal rates of 60+%. Very low income earners have less motivation to be in the job market at all.

[V]

Leondros posted this here, but I assume it was a bit of a wild-a** guess. https://forum.calgarypuck.com/showpo...&postcount=304

But yes, I assume the way it works is the further you are away from poverty the more tax you're going to have to pay.

[FlamesAddiction]

Originally Posted by blankall

UBI under our current system is just wealth redistribution. It's no different than expanding the current welfare system, which is already teeming with abuse.

In order for it to actually work, you need a system where labour is largely no longer required and the work is being done by government owned machines. In other words, at this point, it's science fiction. It's a good philosophical talking point, that can spur on conversation about inequality and ways to improve our current system. However, it's an ideal that would be a huge disaster if implemented.

It is 100% wealth re-distribution, and I doubt it would be applied without some caveats and not in our lifetime.

I think about what happens when construction, resource extraction, and service industries become largely automated. There already exists technology to do this. And sure, new jobs will form, but the end goal will be to automate those as well. Eventually, something will give.

[The Yen Man]

I guess I don't see how UBI can work unless future work is heavily regulated by the government, and the government taxes corporations heavily and then re-distributes wealth to everyone. Half of future jobs would be from the government. Sounds suspiciously like communism, to be honest.