
Replacing welfare payments with “basic income” for all is alluring, but expensive - kylered
http://www.economist.com/news/finance-and-economics/21651897-replacing-welfare-payments-basic-income-all-alluring
======
raldi
This analysis doesn't seem to account for the savings and increased efficiency
from all the policy changes basic income would enable.

For example, water and parking spaces could be priced at their actual cost,
rather than being subsidized. This would make the water market function
properly and allocate it efficiently, and remove a bunch of car-related
externalities.

Need public housing? Not if you set a high enough basic income level.

Street crime? Possibly quite reduced.

Massive corn subsidies? Who needs 'em?

And think of all the otherwise great ideas that we don't do because they'd
effectively be regressive taxation. For example, congestion pricing. We could
revisit all those ideas.

And what about when the children of would-have-been-poor households grow up
with an actual ladder up? Think of the things they'll invent, the
contributions they'll make to society.

~~~
chrisseaton
'Need public housing? Not if you set a high enough basic income level.'

If everyone's income were increased, might not prices for things like housing
go up as well, so some people could still be priced out?

~~~
nevinera
Yes. But the presence of a large group with a consistent fixed income would
incentivize the building of large-scale low cost apartments - those don't
exist currently outside of major cities (where 'low cost' is substantially
higher), because the demand isn't there.

~~~
asuffield
There is no shortage of incentive for that in most of western Europe - such
property is significantly profitable. The reason why not much gets built is
because (a) cheap housing blocks results in ghettoisation, which most
governments try to prevent with mixed-dwelling planning requirements, and (b)
local residents invariably object to any planning request for housing more
low-income people near them.

~~~
learnstats2
I've seen enough uncompleted estates and empty unsellable new buildings over
time to suspect that such property is significantly risky.

Maybe such property is significantly profitable today, but we can't be sure by
the time the building is complete.

I suspect it's more likely a simple business decision: the profit doesn't
outweigh the risk.

In London, construction companies work hard to avoid the commitment to
affordable housing and pay councils bribes to overcome that. Why would they
need to pay councils off if this was a profitable option for them?

~~~
asuffield
London's a special case: every single unit that can be converted from
"affordable housing" to "luxury accommodation" is a massive profit realised by
the developer. You can make a lot of money from building low-cost housing, but
you can make an awful lot more from building really expensive housing, because
there is essentially unlimited demand for both.

------
smackay
The article points out that making basic income available to those
contributing to society (working, looking for work or volunteering). That's
incredibly short-sighted for several reasons: 1) the idle are best being,
well, idle - out of the way while everybody else gets on with making the world
a better place. Sure they will reap the benefits but their number is likely to
no higher than the currently idle. Indeed the numbers are likely to be fewer
since everybody is free to do what they want; 2) means testing whether
somebody is eligible is going to create bureaucracy and drive up the costs of
the system and finally 3) if I wanted to spend a couple of weeks cleaning up
my local beach of garbage I should be free to do so - the benefit to society
is obviously large but the effort might just be me or a small group of similar
minded folks. Justifying that to some authority so I could collect my payment
would kill a lot of creativity because of the paperwork involved. As a result
of lot of trivial but useful things, cleaning garbage from playgrounds or
collecting household vegetable waste for a local compost heap would go undone.

~~~
ChrisLomont
>their number is likely to no higher than the currently idle

Why do you think giving some people free money that do not get it now would
not result in some of them becoming idle?

There is evidence as payments increase the idle increase. For example, I think
the OECD has data showing there are more people on disability by a wide margin
across countries, and this correlates with the benefits the various countries
offer. Do you really think there are naturally more disabled people in the UK
than the US, or that because they offer better support more people are
inclined to try and get it?

>if I wanted to spend a couple of weeks cleaning up my local beach of garbage
I should be free to do so - the benefit to society is obviously large but the
effort might just be me or a small group of similar minded folks

Obviously large to whom? Why does this group or person not already pay someone
to clean the beach? Apparently the value is so low that people spend their
money on things they want, instead of hiring you to clean the beach.

What you're arguing is that people will produce things of lesser value to
society, but of some value to their own belief set, things of such low value
overall that no one will pay for it. This results in a lower amount of goods
and services, which ultimately results in society getting poorer, not richer.

~~~
ThomPete
Some of them do become idle thats the whole point because some of them ARE
idle. We are not talking about living like a king. We are talking about basic
income i.e. getting by.

------
DiabloD3
I am going to tell a story about the state I live in: Maine.

We have many programs: HUD (to help pay rent), Food Stamps, HEAP
(fuel/electricity assistance), and others.

All of these have complex forms to fill out, and offices filled with staff
that don't actually understand the complex rules, and the rules seem to change
all the time.

Hiring these people costs money. Due to the complexity of the rules and forms,
many families that qualify for these programs do not apply for them due to the
frustration they cause, and when you're poor you only have a limited amount of
frustration before you curl up and cry yourself to sleep every night.

Many consider just getting any aid from the state a full time job in of
itself.

Not only that, programs like food stamps issue a card, the maintenance of
these cards is probably not cheap as they outsource it to some company out of
state. The minimum you can get on food stamps here is $15/mo (which helps
absolutely no one, I'm sorry, but $15/mo could be a day's worth of food for a
couple with a kid); what is the actual cost of doing that $15/mo? I read
somewhere that a quarter of a million households qualify for food stamps in
Maine, how much are money are we losing administering a program like this that
has such little benefit? Could we be feeding another few thousand households
with that waste?

I've been advocating a basic income program for years purely because of the
efficiency of it. Once people no longer have to worry about where their next
meal is, or their wife's next meal, or their kids's next meal, or if they will
have a roof over their head tomorrow, or will their car be stolen, I mean,
repoed by the bank tomorrow, they can actually focus on being gainfully
employed, or go back to school, or just not be a fucking wreck.

I live in Maine. I suspect we are the poorest and most forgotten about state
in the great experiment that is our nation. A program like this would create
all the jobs we don't have, would end the constant bullshit people here have
to deal with, and probably save lives as well.

Life here is so bleak that, as a non-alcoholic, people have assumed that I
mean that I'm just in AA, and quit drinking. "No," I tell them, "I really
don't drink. Never have." They look at me like I have two heads.

~~~
rquantz
I have never heard someone talk about Maine as bleak. Seems like most people
who live there or are from there love it. Are you really saying poverty in
Maine eclipses the Deep South?

~~~
douche
Purely anecdotal, but I took a roadtrip through southern Appalachia a few
years ago, and the parts of West Virginia, Tennessee and North Carolina that I
went through reminded me so much of rural Maine that it wasn't funny.

Maine is really two different states. There is southern Maine, centered on
York and Cumberland counties (basically the Portland metro area), and then
there is the rest of the state. The other half of Maine has very little
industry, almost no white-collar work, and extremely low population density.
There are entire regions of the state that are propped up by one or two paper
mills that are still operating, or subsist off of tourism dollars during the
summer months or the ski season. And even tourism and skiing took a beating
during the recent financial crisis.

~~~
DiabloD3
I agree with this. When people say "Hey, what about Portland" I tell them, no,
Portland and Kittery are actually part of New Hampshire since they seem to get
all the actual benefit.

Like, you know how when you travel between states, theres the major highways,
and theres tons forest, and no actual towns or anything for miles? It isn't
like that from NH into Portland, it IS like that from Portland into Augusta or
on the way up to Bangor.

Oh, and as for all the paper mills? We're killing those off. And our one large
major employer that isn't in Portland/Kittery? Its rumored that since Jackson
Lab couldn't open a big new location here in Maine and opened it in Flordia
instead, they're moving their existing location here down to Florida too (and
with that, probably thousands of jobs will go with it between the people that
work there and the people that support those people in that community).

Its like, can we just leave the US and join Canada already?

------
highCs
_A generous basic income funded by very high taxes would be self-defeating, as
it would reintroduce the sort of distortions that many of its advocates hope
to banish from the welfare system. Loafers could live comfortably without
lifting a finger._

Basically, if there is not enough jobs for everyone - the raison d'etre of the
basic income - then at some point, some aren't going to do anything: that's
the point.

In other terms, the basic income is all about how do deal with the people
which does nothing since we have reasons to think they couldn't do anything
anyway according to the situation.

~~~
lazyant
> Loafers could live comfortably without lifting a finger.

I have zero problems with this (for some levels of "comfortably"), the
alternative is filled with drugs and crime.

------
dsr_
Unvoiced assumption #1: working is good. Corollary: Not working is bad.
Unvoiced assumption #2: anyone who wants a job can get one.

We know that #2 is false. Coupling the assumptions together produces a group
of people who are considered to be bad for reasons that are entirely beyond
their control.

~~~
unclebucknasty
Well, I think assumption #1 (especially the corollary) is voiced, for
instance, as follows:

> _Loafers could live comfortably without lifting a finger._

But, I do think that sentiment is a root part of the resistance against BI.
People have bought pretty heavily into the current status quo that says, "you
eat what you kill". So, if you don't work you are an undeserving freeloader or
loafer.

Whereas, BI, for some, essentially acknowledges the common ownership of
natural resources, etc., treating sustenance derived therefrom as more a
natural right than something that must be earned.

~~~
plurinshael
The capitalist status quo is all about "you eat what you kill," true. But in
America, a huge majority is ostensibly Christian, especially in politics. And
Jesus is all about grace, that you literally cannot earn the living truth, the
light, the peace, the spirit, because they are given in grace. I wonder why
it's such a radical suggestion to take that premise into material aspects of
life.

~~~
unclebucknasty
I think there is a huge disconnect between professed Christian values and
execution on many fronts, including this one.

I suppose that _especially_ those who adhere to the Christian faith would
anticipate this. In other words, the Christian teaching is that the very need
for grace is brought about by humankind's utter inability to consistently
adhere to Christian principles.

------
ForrestN
I think the ethical arguments and the practical arguments about how other
policies could be changed once basic income is implemented are more than
enough reason to vote yes. But all of that is ultimately moot: the most
important reason why basic income will soon be necessary is that "jobs" as
they exist now are already on their way out.

The idea that it is "too expensive" just begs the question "too expensive to
whom?" Eventually, our practice of giving the richest people more and more
money will hit a breaking point, and we will have to figure out a way to take
care of all the people whose livelihoods have been automated. Basic income is
the best and easiest way to obviate that problem, and the richest can easily
afford to pay for it.

------
transfire
The article also doesn't seem to take into account that we already spend of
hundreds of billions of dollars every year of welfare programs that could be
saved. The article just piles BI on as an additional expense.

I also think most BI supporters tend to shoot too high. The equivalent income
of just a 16hr per week job at min wag would do wonders for the economy
without putting a great deal of pressure on people not to work.

~~~
csandreasen
The US spends $454B on welfare programs[1], but has a population of 321M. If
you scrapped the existing welfare program in favor of BI, you'd be able to
give everyone only $117 per month. You can make adjustments for things like
children not requiring as much, but we're still nowhere near a livable wage.

[1]
[http://www.usgovernmentspending.com/year_spending_2015USbn_1...](http://www.usgovernmentspending.com/year_spending_2015USbn_16bs2n_40#usgs302)

~~~
netfire
I think you'd need to expand beyond what's generally classified as welfare.
You could probably also get reduce or eliminate social security benefits
(another $745.3B)

You could also probably greatly simplify the tax code, which has become a form
of welfare with the poor paying less and the richer paying more relative to
the amount they earn.

Then there's other potential benefits or reductions in cost, that are harder
to quantify and predict. Would there be a reduction in crime? (which could
reduce police costs) A decrease in sickness and health costs? (due to
increased nutrition and better shelter) An increase in productivity and a
boost to the economy? (due to people being in better health, being able to get
more education and a tax code and welfare system that doesn't incentivize
making less) What about all the non-profit organizations that spend millions
helping the unfortunate? (What could that be spent on instead?)

I'm not necessarily in favor of a basic income to the extent mentioned in the
article. I do wonder, however, if some limited basic income could be more
effective than our current programs designed to help the poor and needy and if
it would provide some better stability in people's lives generally. Either
way, it would have a broader impact on the economy than simply removing
welfare programs from federal and state budgets.

~~~
dllthomas
_" You could probably also get reduce or eliminate social security benefits"_

"Eliminate" would never fly politically, and to be honest I don't think it's
the right thing anyway. We probably could reduce/consolidate, if we did so in
a way that meant (BI + SSI) was never lower than SSI before the change, which
would certainly still mean savings.

------
karmacondon
Money doesn't disappear. If you give people a basic income, they'll spend it.
On rent, beer, education, their kids, all the things people normally spend
money on. And some of it is going to come back to all of us in one way or
another. Maybe more people will have money to buy apps or pay for services
offered by hn members' startups. Or they'll buy lottery tickets and the
additional money that goes to education will be used to hire consultants or
custodians for schools. Or they'll spend more money at Wal-mart, some of which
will be used to purchase some kind of software from a tech startup. Money
always trickles back up, especially when it's put into the hands of low income
people who tend to spend more than they save.

This adds up to a discount on the cost of BI. Increase taxes by X% and you get
back Y% in increased spending. Of course everyone won't benefit equally, but
there will be plenty of good times to go around. Don't worry about moral
judgements regarding who is working and who isn't. As long as they're spending
it will mean more for you.

~~~
maxerickson
The thing to do is take a step back from money and consider production and
consumption.

A basic income would hopefully create some increase in consumption.

The more interesting question is what it would do to production. The big fear
is that it would cause a drop in production, a drop big enough that mean
consumption would have to drop below where it is today.

~~~
ChrisLomont
>A basic income would hopefully create some increase in consumption.

But you took the money to pay for basic income from someone else. They would
have used it for consumption and possibly investment (or savings, which is
also invested). So it is not at all clear this would result in a better
economy.

~~~
maxerickson
I more or less said that in the next paragraph there.

------
powertower
Having negative income tax brackets for those that:

1\. Work +

2\. Declare their income (i.e., file tax returns) +

3\. Make below X amount

... is more financially reasonable _and has the benefit of keeping the person
working /trying/moving_.

In this system, as an example, someone making below 30K year would gets the
difference between what they make and the 30K mark given to them.

Otherwise, the only other solution is to just have the FED print out the 5-10+
trillion/year this guaranteed minimum income program needs - and distribute it
each month.

Most people are already paying a 40-60% effective tax rate (all use, property,
local, state, federal taxes - and other related fees - added up) on what they
earn, and you really can't tax them more for obvious reasons.

~~~
raldi
Speaking for people who make as much as, or more than, me: We could afford to
pay a lot more in taxes.

~~~
gergles
Speak only for yourself, please.

I paid close to 50% of my income in income and payroll taxes last year. I live
in the US and am not in the top marginal federal tax bracket. I feel I am
taxed more than adequately when compared to other economies that provide a
much greater service level for their citizens.

The problems in the US are not on the supply side, they are on the demand
(government spending) side, and simply - they are on the military complex
side.

~~~
ezzaf
Why isn't the statement that people on high incomes can afford to pay more tax
generally true? Simply feeling that the tax you pay is adequate does not mean
paying more would be unaffordable. Certainly you could more afford it than
someone on an income of half or a quarter of yours.

The question of whether reducing funding of the military complex would be a
better policy than tax increases is a valid one, but unrelated.

------
netfire
Why not start with something smaller, like providing "basic food" for
everyone, and see what the result is? You could reuse existing programs, like
food stamps, where the infrastructure is already in place for most grocery
stores to accept payment. (except without the application process)

That seems like a less risky change than trying to provide enough income to
cover housing, utilities, clothing, etc. all at once.

~~~
rjsw
Or just start with a small Basic Income to test out the system.

~~~
netfire
Also a good option.

Personally, I think I would favor providing something like food through a
system like food stamps first. It provides less risk of the money being wasted
on addictions (drugs, gambling and other bad financial decisions) and better
ensures the money is used to help someone (especially in the case of children,
where they are not spending the money, but their parents are).

~~~
rjsw
But part of the theory behind Basic Income is that people will change their
behaviour when given more Agency, restricting what they can spend it on
doesn't let us test this.

------
code_reuse
I think what we need is "basic commodities" in terms of foodstuffs that a
person could live off of, for example: a 40lb bag of rice, lentils, 3
different kinds of beans, corn meal, canned tomatoes, canned fruit, and a jar
full of multi-vitamins. Absolutely no proof of income status should be
required only a quick verification that that A. You are a human being, and B.
you're not abusing the system by taking more than you could actually consume
during a given time period.

This ensures that nobody ever needs to go hungry, it puts money in people's
pockets because now they don't have to spend as much of their income on food,
and it accomplishes this all without prying into the private details of
anyone's life.

The goal in my opinion should not be to "give everyone an income" but rather
to give everyone a safety net on top of which they can attempt to build a life
for themselves. It trains people to be used to _sharing_ and _giving_ the
things that we need to sustain ourselves, which is healthy and nurtures a
cooperative spirit among men.

------
stegosaurus
The trick that governments all around the world pull is taxing those who are
not wealthy.

Taxation should not be a 'membership cost' for society. It should be a fee
levied on the very wealthy, not out of some sense of spite, but in order that
the system continues to produce reasonable outcomes for everyone.

When you do that, then basic income can be argued for reasonably.

Right now, poor/working class people fall over themselves to come up with
reasons why BI won't work because they don't want their tax burdens to rise.

Land and capital owners should pay tax. Those with zero net worth really
shouldn't. Why?

Because taxation on labour is effectively stolen labour. Taxation on capital
is simply an adjustment in living standards. The two are hugely different.

The idea that the rich would just go fugitive if wealth were taxed is a total
fantasy. Knightsbridge exists as a real place. I can cycle down the road and
pop a letter through a letterbox. It might become marginally less attractive
with a 1% annual tax. It might be that the economic boom caused by
redistribution results in it increasing in value anyway.

------
mellavora
How expensive is it to NOT provide a "basic income"?

~~~
vdaniuk
This consideration is missing in most of discussions about basic income. What
is the opportunity cost of NOT implementing a basic income scheme?

What if we make an effort to assess the opportunity cost in longevity changes,
public health indicators, crime rate, education levels and, perhaps, most
encompassing and important parameter: human happiness.

I am quite sure that the opportunity cost which humanity and individual
nation-states incur for not implementing basic income is absurdly, humongously
huge.

------
akhatri_aus
I don't see how this is affordable. With the Swiss amount of $2700 per month
($32,400 p.a) it's $32bn for 1m people per annum (8m people in Switzerland).
This is 45% of the annual federal budget last year ($70b) & doesn't even cover
13% of the population. What about everything else that needs government
expenditure: roads, defense, education & research, regulatory oversight,
police?

~~~
ThomPete
But you don't need all the people you are paying to control all sorts of
things in a conditional system. So you would basically get rid of a lot of
expenses that are currently being used to control the system.

~~~
akhatri_aus
I don't see how you could get rid of spending on roads, police, foreign
relations, defense, regulatory oversight? It's a jump to assume crime would
disappear with basic income and police would no longer be needed.

Also expenditures where economies of scale can be achieved are better off as
government expenditures as an individual would get nowhere near the cost
effectiveness (healthcare, education) or the incentive to build as an
individual (roads, parks, water networks, cleaning, etc).

There's also the prime issue of how it can be afforded in the first place,
besides all the consequences of reallocating existing expenditure.

~~~
ThomPete
Thats not what we are talking about. We are talking about the system to
control that people are in fact getting what they are supposed to and not
cheating.

Thats many many times bigger than you would think. Also no one is talking
about not spending on road and the current system doesn't really do that
either IMO.

~~~
akhatri_aus
I think there is an opposing argument to the benefits you claim could be
achieved. By having free income, there is less of an incentive to work, there
is actually a large chance productivity would drop, not increase!

Also, keep in mind you need funds to run the tax collection system to collect
taxes to fund the basic income scheme. On a theoretical basis you may have a
point but I don't see its that easy or possible in reality. I for one would
just use the basic income to live and roam the world without giving anything
back (since this is what I'm incentivised to do).

~~~
douche
I doubt that. If basic income was implemented as a straight, tax-free cash
payment, which didn't contribute to income tax, and replaced current means-
tested welfare benefits, I think that it would actually be a net win for
everyone. If you work, it means extra money in your pocket, and your benefits
don't get pulled out from under you if you go over the income limits. On the
government side, administration gets much simpler - just mail out the checks
to everybody. You could also drastically simplify the tax code.

------
feld
Probably as expensive as giving the homeless free housing... which has
repeatedly shown to be cheaper than not

~~~
tomcam
If you believe that deeply in that idea, then turn it into a startup. Put your
own money into it and I'm sure you'll see truly interesting results!

~~~
ZeroGravitas
The money saved is in police time, emergency health care, etc. so you'd need a
way for a private enterprise to claim the savings that result from housing the
homeless to make this market work.

~~~
greggyb
In a large city these are all city services, which implies that a startup
could work with the city as the customer.

------
ZenoArrow
I really like the general idea of basic income, but I don't think it's the
right time for it now. The only reason I say that is that we need to address
the destabilising effects of the banking sector before money is ready to use
as a means of providing a safety net.

Control over the money supply ensures that prices can settle, which means that
the income you earn (through UBI or otherwise) can give the basic quality of
life we want to ensure all have access to. However, at the moment, the
increase of money in circulation is largely driven by banks, who serve profit
over people.

Solve the banking issue, and you'd have removed a road block for UBI as well
as freeing up the capital to do it.

Alternatively, I like the idea of 'basic food' and 'basic shelter' that were
mentioned elsewhere in these comments. They'd probably be easier to push
through, as well as providing tangible benefits for those in need.

------
spacehome
I haven't really made up my mind about Basic Income, but one thing I never
heard advocates of Basic Income talk about is that incentives matter to human
behavior. BI will tax people who work more and give handouts to those who
don't. This disincentivizes working and incentivizes not working. For example,
the increasing numbers of people on Social Security Disability Insurance seems
like a similar phenomenon and is not a good omen. [1]

[1] -
[http://www.ssa.gov/policy/docs/chartbooks/disability_trends/...](http://www.ssa.gov/policy/docs/chartbooks/disability_trends/sect01.html)

~~~
ebiester
1\. A basic income doesn't mean that you have enough to fulfil all dreams.
There will still be reasons to earn more income, especially with those who are
capable of delivering value.

2\. There is a fundamental assumption that we are at a technological stage
where work can be automated. If there are not enough jobs that someone a
standard deviation below average intelligence can fulfil, we could be coming
upon a societal disaster.

If instead, we incentivize automation by saying, "no job is a superior
alternative to an easily automatable, low value job where people are treated
as disposable," there is no significant conflict. If people with low skill do
not choose to work, and their skills are automatable, it is only our moral
qualms that get in the way.

As it is now, significant portions of the population cannot provide enough
value to ensure their subsistence, minimum wage or otherwise. Is it only our
morals that require some work from them?

3\. Incentivizing not working also means incentivizing spending a year on an
idea that could advance society, or works of art and literature. Harry Potter
was written by someone who decided not to work. There might be major value to
society that we're losing because we _don 't_ have a basic income.

~~~
unclebucknasty
What's interesting about your point 3. is that it speaks to these archetypes
we have defined for people.

We have so ingrained in our minds that a person's value to society is defined
by his/her economic contribution in the traditional sense (i.e. via a job or
business ownership), that we assume that a person who does not work has no
value by definition. In fact, they are even morally deficient. So, how can
they possibly be of a quality/character as to contribute anything to society
via arts, ideas, or otherwise?

It's a sneaky bit of circular logic that, for many, argues against a BI.

~~~
ebiester
There's even more to it -- it's that the only thing of value to society is
that which can be traded for money.

~~~
unclebucknasty
Indeed. When companies that otherwise have the wherewithal choose not to
pursue cures or vaccines because there isn't enough profit in it, larger
society barely pauses to register the true awfulness of such a calculus.

But, this is the type of stucture that we've engineered to allocate the
world's resources--one where human value is malleable and always somewhere
along the economic continuum. It's the same structure that precipitates the
need for a BI and, sadly, also produces the minds that resist it.

------
stegosaurus
The whole discussion is ridiculous to me. All of the money filters back up to
the capitalists anyway. Is that not mind-bendingly obvious?

If you are a recipient of the basic income, you spend it all. Every last
dollar. You don't build net worth and take it out of the economy. (If more
than a small hardcore crowd even can, it's been set too high).

In a country like the UK, that gets taxed at 50%+ (providing the tax
authorities are actually doing their job and have not been deliberately
underfunded). So half of it almost immediately goes back into the Government
coffers.

I don't understand why people spend so much time doing arcane analyses whilst
seemingly missing how the economy works at a very basic level.

Government spending can be a net drain in two broadly defined ways, as far as
I can see. There may be others that I am missing.

1\. Giving money to the rich directly who then hoard it. 2\. Inefficient
allocation of human talent or natural resources (e.g. if the government paid
me 200k pa to chew pens, and I gave up my real job).

Spending on the poor really cannot cost money unless you have issues with
collecting taxes.

------
nevinera
2700 per month is 32.4k per year - that's awfully high for a basic income. I'm
not surprised it's "too expensive".

~~~
laurencerowe
Adjusting to GDP per capita gives a US equivalent of $20K/year. For the UK it
adjusts to £10K/year, pretty much exactly the amount a single adult would get
on job seeker's allowance plus housing benefit. (For pensioners and single
parents with one child it goes up to about £15K/year.)

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nevinera
In the relatively near-term future it will be literally impossible to employ
more than half of the population in nearly full-time positions that produce a
net gain for their being filled. At that point there are essentially two
choices - let some people not work, or let everybody work less. (There's
actually a third choice that will probably be the default - make-work for all,
so that we can be kept too busy to effect change).

The latter sounds more fair, but is inherently less efficient - specialization
means that for every doctor to work half as much, we have to train twice as
many doctors for the same amount of 'product' (the practicing of medicine).

The math in this article seems to also have inexplicably paired 'basic income'
with 'flat tax' \- while I'm sure there are plenty of people who would like
both, those two systems are completely separate, and there's no good reason
not to consider the effects in isolation rather than together.

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Numberwang
As a big fan of the idea of a basic income I would love some numbers on this.
Simplicity is sometimes worth the price.

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kwhitefoot
No one on this thread seems to be aware that basic income has been tried in
several trials both in the US and Canada. See, for instance,
[http://en.wikipedia.org/wiki/Mincome](http://en.wikipedia.org/wiki/Mincome)

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EvenThisAcronym
One thing that I think doesn't come up very often when discussing BI is the
fact that many other laws will have to dramatically change to make the
experiment successful. Just imagine the enormous increase in things like
contribution to open source, creation of art and culture, etc. I don't believe
that the current environment of hyper-strict IP and patent laws can continue
if BI were to be implemented, as many more people would use their increased
leisure time to create. Today we can already see conflicts between big IP
companies and individual creators, and if BI is introduced it will get much
worse.

------
steveitis
Inflation is currently controlled by adjusting the amount of new money printed
to back up loans given to large banks.

Instead of printing new money in this way, we could just give the new money
directly to the citizens.

Quick napkin math shows that every person in the US would have gotten a check
every year all the way back to the 30's (some years smaller than others),
without needing to raise taxes at all. In fact cancelling some of the welfare
programs made unnecessary by this system would likely result in lower taxes.

Loans would be more expensive, but more expensive loans seems like a small
price to pay for basically ending homelessness and hunger.

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gaius
_n Britain, for example, workers can earn £10,600 ($16,500) before income tax
is levied on subsequent earnings (starting at 20%)._

Shortly to increase to £12,500 in George Osborne's next budget in July.

~~~
learnstats2
1\. The £12,500 promise is for this parliament, i.e. before 2020. It's
probable that they will exceed the promise, but not in July.

2\. Increasing the personal allowance no longer makes much difference to the
poor and underemployed: the disadvantaged in society. Thanks to the last
parliament, they are out of this category.

Increasing the benefit is now primarily a small tax benefit for the working
middle classes that has the significant advantage of appearing to be
progressive.

------
treelovinhippie
Best solution I've come across is a small <1% fee on all financial
transactions. Which would work well if all those transactions in the world
occurred on a blockchain.

This guy is giving the method a shot:
[http://www.basicincome.co/](http://www.basicincome.co/)

~~~
ChrisLomont
Many countries have tried it, and it usually ends like this [1] implementation
by the Swedes from 1984-1991. Then they cancelled it after witnessing the
devastation to their economic sector.

"During the first week of the tax, the volume of bond trading fell by 85%,
even though the tax rate on five-year bonds was only 0.003%. The volume of
futures trading fell by 98% and the options trading market disappeared. 60% of
the trading volume of the eleven most actively traded Swedish share classes
moved to the UK after the announcement in 1986 that the tax rate would double.
30% of all Swedish equity trading moved offshore. By 1990, more than 50% of
all Swedish trading had moved to London. Foreign investors reacted to the tax
by moving their trading offshore while domestic investors reacted by reducing
the number of their equity trades.

As a result, revenues from these taxes were disappointing. For example,
revenues from the tax on fixed-income securities were initially expected to
amount to 1,500 million Swedish kronor per year. They did not amount to more
than 80 million Swedish kronor in any year and the average was closer to 50
million. In addition, as taxable trading volumes fell, so did revenues from
capital gains taxes, entirely offsetting revenues from the equity transactions
tax that had grown to 4,000 million Swedish kronor by 1988."

[1]
[http://en.wikipedia.org/wiki/Swedish_financial_transaction_t...](http://en.wikipedia.org/wiki/Swedish_financial_transaction_tax)

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littletimmy
Raise tax on capital gains and stop corporate tax avoidance. You'll have
enough to implement a minimum wage.

------
KaiserPro
sure actually giving everyone 10k a year is going to cost too much. But I
don't think anyone who is sane is actually proposing that.

At the moment, the poor get a mismash of benifits that all require
administration.

replacing that with a single means tested universal income is far simpler.

for example:

every house hold is entitled to 10K, if you only earn 5k, you get a top up to
10k. This is no more costly that what already exisits in the UK (housing
benefit, out of work, DLA, working tax credits) but is a magnitude more easy
to administrate.

You get the added bonus of abolishing pensions that cost uber cash to
maintain.

I think the economist is deliberately grasping at the wrong straws. Either
that or the Swiss are batshit insane.

~~~
anonymoushn
That's a 100% tax rate on your first 10K in income?

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Madmallard
How is basic income even feasible from an economic, realistic standpoint? It
would have to be wealthy people taking the hit right? How else would it be
possible?

~~~
lukifer
Here is my high-level hypothesis, sans numbers: most workers produce far less
real value than what they are paid. At one end you have many white-collar jobs
that are glorified seat fillers, padding budgets for their departments. At the
other end, you have blue-collar jobs whose value is artificially inflated by a
minimum wage (or, wastefully shipping work overseas, and finished products
back.)

In a UBI world (also assuming socialized medicine), neither minimum wage nor
de facto salary+benefits would be necessary, and labor would be free to seek
its true market value, as the competition becomes over status rather than
survival. My hunch is that even if all work was taxed (flat or progressive) to
pay for it, the actual purchasing power of the dollar would increase to offset
it due a more efficient market. (It would also be offset by the elimination of
means-testing and beauracracy in existing social programs, as well as enabling
a great deal more education and entrepreneurship.)

Admittedly, the idea is abstract and hand-wavy. But it's worth considering.

------
gremlinsinc
Here's some of my ideas: 1\. CEO pay cap @ 20x(or some other similarly
reasonable #) of the median salary of the employees. Median salary is 30k ? So
I can only earn 600k ? Screw that, I'm going to get everyone closer to 75k,
that'll put me at 1.5 mill, that's way better - and everyone profits.

2\. Flat but fluid Nationwide Sales Tax (would mean anyone visiting, or
staying illegally has to pay taxes -- way better than an income tax.) --
Adjust this yearly as needed to compensate for basic income and other needs.
When there's a surplus lower it the next year, when there's a deficit raise it
1-2 cents per dollar.

3\. Higher taxes on luxuries like: 4star+ hotels, First Class plane seats,
fancy cars, boats, private jets.

4\. All recipients must have a roof over their head, and an address to mail
the check to.

5\. Congress / Senate pay and benefits capped at the national average as well.

6\. Allow individuals, ceo's, etc who have more money to "pay it forward" and
actually donate money to the government earmarked for the basic income fund.
Some of the .01% may actually want to help out the rest.

7\. Tax on automation, and companies that use robots to displace workers. The
age of the robot worker is coming, this may slow that down if we can make it
less of an incentive.

~~~
powertower
If you took all the money paid to all Walmart employees above the manager
position, every last cent, and redistributed it back to the workers, you'd
increase their pay by less than $100.

You are assuming that companies are all in a high margin low competition
markets, and a bunch of other stuff that is simply not true.

