
AB2712 – California Universal Basic Income - aninteger
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB2712
======
rmah
Can they not do basic math? There are around 30 mil adults in California. Even
if provision 18992.1 (b) is 5 mil people, that's still 25 mil people. That's
25 mil * $12,000 = $300 bil a year. The ENTIRE California state budget for
2020 is only $220 bil.

They would have to more than double the tax revenue for a state with already
very high taxes.

Now, assuming the most generous interpretation of their 10% VAT proposal...
which means a 10% VAT on things like rent, transportation, etc. CA has around
11.5mil households with apx $40k/household of spending, which yields $460bil @
10% => $46bil in additional tax revenue.

This won't work. It's just meaningless hot hair.

~~~
infecto
Boy, I already pay some of the highest taxes in the country and now I get to
pay more. For what? They cannot manage anything else properly in this state.

~~~
dessant
What percentage of your income goes to taxes? In the EU almost half of your
income would be withheld for different taxes, and depending on the country,
you would also get absymal health care, with a system that forces you to pay
out of pocket, after a part of your salary was already taken to pay for
universal health care.

~~~
ac29
The top tax bracket in CA would require you to make well over $1M for a
married couple: a rate of 37% federal + 13.3% state. But depending on your
definition of "almost half", this could be much lower - a combined rate of
41.3% starts at about $325k for a couple. These are income taxes only,
mandatory medicare and social security taxes add a bit more.

~~~
aidenn0
Those are marginal rates though. A couple making $325k would pay about $98k
per year in taxes.

------
kyledrake
If you pass this without passing radical reform of zoning and building
millions more homes, it will be yet another wealth transfer mechanism from
poor consumers to wealthy California landholders. Rents will eventually match
the increase in income as way too much demand chases an incredible, inhumane,
History Will Judge You shortage of supply.

Which, amazingly, is one of the reasons this could actually pass. California's
property class seem to get everything they want, even if it's voting down
small and inadequate reforms like SB-50 was (it was a start but not even
remotely enough).

California should be thinking about absolutely nothing else that's big except
fixing their housing crisis. It's so big at this point that it's actually
causing most of the other major problems.

~~~
oDot
You write as if markets are a zero sum game, however they are most certainly
not.

You say the poor tenant will transfer wealth to the wealthy landlord as if the
tenant is losing. However -- they are both gaining.

Say the rent is $1000.

Obviously, the property usage right is worth to the landlord less than $1000,
otherwise he would've just used the property himself. He gains.

The property usage right is worth more than $1000 to the tenant, otherwise he
would've just kept the money. He gains.

Both people gain. Both people get richer. Both people ended up with more than
they had prior to the transaction.

~~~
michaelt
Housing markets are a zero-sum game if you _refuse to build more housing when
demand exceeds supply_

If ten families want houses and there are only nine on the market, one family
will go without whether you have auctions, price caps, land taxes, means
testing, subsidies, or any other economic intervention, because _nine is less
than ten_

~~~
JoeAltmaier
Houses get built, maybe just not in the favorite places. People get roommates.
Sure housing is more inflexible than some products, but not a whole lot.

~~~
thereisnospork
> Houses get built, maybe just not in the favorite places.

So 9 out of 10 families get to live in a commutable distance to where they
work, or 2 families get to live in half the appropriate space. Not good for
the economy, not good for the families, very good for landlords.

Whether or not housing is naturally flexible, CA's government has done pretty
darn well making it inflexible. See rents vs. inflation.

Every dollar of rent above costs for construction and __necessary
__administration is a monetary redistribution from the renting class to
property owners. CA doesn 't lack land, and it doesn't lack the ability to
pour concrete into earthquake-safe cubes with plumbing; the difficulty in
construction and resulting high rents is the result of intentional obstruction
and regulatory capture by the benefiting property owners.

~~~
fargle
Pretty sure it's not the landlords and wealthier classes that are making CA's
government into a giant tarpit. They'd love to see less and smaller
government.

Over-regulation is only a part of the cost. The biggest part is the demand.
But don't worry, whenever people figure out that silicon valley jobs can
easily be relocated, to basically anywhere, that will all work itself out.

~~~
thereisnospork
> Pretty sure it's not the landlords and wealthier classes that are making
> CA's government into a giant tarpit. They'd love to see less and smaller
> government.

They, like anyone else, want to see a government act in their interest.
Sometimes that means less government, sometimes it means more. Democrats want
more government in healthcare, Republicans want more government in
immigration; it is about what they want not how they get it.

And yes it will sort itself out, much like Detroit has worked itself out after
the auto boom. It is just sad seeing myopic governance[0] lead CA towards that
future.

[0]"Democracy is the theory that the common people know what they want, and
deserve to get it good and hard."

------
Someone1234
I'm confused by "18992.1 (B)." So if you fall on hard times (e.g.
unemployment) and UBI would be most beneficial you now have to pick between
UBI and health insurance? That doesn't make basic sense to me, and undermines
the whole "universal" part.

Plus managing those exclusions would likely cost more than it would save
(imagine all the additional management overhead of cross-checking programs and
or having people certify they aren't on them/policing fraud).

Actually I find the under-18 restriction kind of questionable too, since this
could be a great system for supporting poor families. The real reason this
cannot just happen outright is that it "competes" with too many other benefits
that it could just outright replace instead.

The biggest problem with scrapping health insurance for UBI is that health
insurance is astronomically expensive. I can see the argument for giving
families with kids $1K/per kid, and just scrapping the food program to name
one example.

~~~
Beltiras
If Medicare 4 All is adopted then that would free up a lot of folks from that
predicament.

------
alistairSH
Very mixed feelings on this. I'm in favor of UBI, but the devil is in the
details and this bill doesn't pass the smell test.

As noted elsewhere, $1000/month for all adult residents adds up to more than
the state's current budget.

The bill doesn't appear to remove other welfare programs. UBI is usually
touted as a moral-judgement free program that replaces all the targeted
welfare programs (food stamps, housing allowances, etc).

So, I'm glad people are taking UBI seriously. But, bills like this feel like a
footgun. People are rightly suspicious of UBI (at minimum, it's new and
untested) and bills like this do nothing to assuage their fears.

~~~
the_gastropod
> The bill doesn't appear to remove other welfare programs

And I think that is the correct move. I'd expect the need for SNAP benefits,
housing assistance, etc. would decrease (probably dramatically so) after UBI's
implemented. But there will always be people who need help. You can't turn a
blind eye to someone in need just because they're getting $12k/yr.

~~~
alistairSH
In theory, any UBI program would provide an amount equal to, or greater than,
whatever amount was previously being provided.

So, if CA food stamps + local housing assistance = $12k, then UBI would also
be $12k. Otherwise, as you say, UBI isn't enough.

If this were part of a broader plan to consolidate benefits into a single
program, it would make more sense. Give everybody the $1000 (or whatever
amount) and if they qualify, bump that $1000 to $2000 (or whatever amount
works out).

The whole point of UBI is to get out of managing many programs, with the
overhead those entail. And if you have a libertarian tilt, it also gets us out
of dictating morals to the poor.

------
Aloha
Perhaps the authors of the bill are unaware that the U in UBI means Universal.

If your unemployment benefits are less that UBI, you should get the difference
in UBI, similarly excluding Medicaid recipients seems well, plain stupid.

~~~
carlisle_
It doesn't exclude medicaid, that's a federal program. These are the programs
it excludes:

> Medi-Cal program, the County Medical Services Program, the CalFresh program,
> the CalWORKs program, or Unemployment Insurance

I'm not entirely sure why, though.

~~~
lukeschlather
[https://www.dhcs.ca.gov/services/medi-
cal](https://www.dhcs.ca.gov/services/medi-cal)

> Medi-Cal is California's Medicaid program.

Because the ACA basically allows states to opt-out of providing medicaid,
Medicaid has separate agencies for every state.

~~~
carlisle_
Good to know thank you.

------
cm2187
If I read it correctly it seems to apply to all residents over 18, present
legally or not.

Combining UBI with open borders / non enforcement of immigration policy is
going to be interesting from a budget point of view.

~~~
JamesLeonis
"California Resident" is a significant phrase. Here's an entire document that
details how California determines it [0], specifically how it _taxes_ those
individuals. Sections F through I, with specific details in G, govern these
specifications. How about doing a little digging before appealing to wild
speculation?

[0]:
[https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf](https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf)

~~~
cm2187
> _How about doing a little digging before appealing to wild speculation?_

Since you are being condescendent about this, would you perhaps mind letting
me know where in that document it states that you need to have entered the US
legally to be resident?

------
throwaway55554
> (b) California residents who are 18 years of age or older and receiving
> benefits under the Medi-Cal program, the County Medical Services Program,
> the CalFresh program, the CalWORKs program, or Unemployment Insurance shall
> not be eligible to receive a universal basic income under the CalUBI
> Program.

I must be misunderstanding something. If you're unemployed and getting
unemployment benefits you don't get your UBI? Isn't that part of the _point_
of UBI?

Edit: Thanks to everyone helping me understand what I was missing!

~~~
timerol
One of the stated benefits of UBI is that it has the potential to replace
other forms of welfare more efficiently. Instead of people getting separate
benefits for food, housing, unemployment, etc, they get the one benefit: UBI.
This removes the problem of "I don't work hard enough to be poor in America",
where the people going through the worst situations have to spend the most
time going through forms and bureaucracies.

Instead, you just get UBI. In good times and in bad, so there's no weird
income caps and disincentives to work. People don't have to deal with welfare
cliffs ([https://www.learnliberty.org/blog/the-welfare-cliff-and-
why-...](https://www.learnliberty.org/blog/the-welfare-cliff-and-why-many-low-
income-workers-will-never-overcome-poverty/)) and/or multiple welfare off-
ramps simultaneously anymore.

Having UBI and still keeping means-tested welfare removes one of the best
benefits of UBI. Most serious UBI proposals do what this one does: Either keep
your current benefits or go on a UBI, whatever works best for you.

~~~
michaelt
_> Most serious UBI proposals do what this one does: Either keep your current
benefits or go on a UBI, whatever works best for you._

I appreciate that we wouldn't want the situation where instituting UBI stops
(for example) severely disabled veterans getting specially adapted cars.

But doesn't this mean we retain all the forms and bureaucracies and weird
income caps and disincentives to work, and the administrative costs that go
with them?

~~~
AnthonyMouse
> But doesn't this mean we retain all the forms and bureaucracies and weird
> income caps and disincentives to work, and the administrative costs that go
> with them?

Mostly not, because everyone whose weird byzantine collection of benefits
doesn't add up to more than the UBI will abandon all of them and choose the
UBI. That should be nearly everybody even if it isn't literally everybody.

------
salimmadjd
US Rep. Tulsi Gabbard has also indicated she'll be putting a UBI legislation
on the US Congress house floor in the coming weeks.

Edit: making it clear it's federal level not state level legislation.

------
pmoriarty
My main problem with this is that if you're poor you'll have to give up Medi-
Cal (California's Medicaid program -- aka health insurance for the poor) and
other state-funded benefits to be eligible.

Health care spending can and has bankrupted many people with private insurance
who are very well off compared to Medi-Cal recipients, so if the poor were
forced to give up Medi-Cal to get $12k of UBI per year, and then spend that
money on private health insurance, and spend even more of that money on food
(since they'd also have to give up food stamps), it makes absolutely no
economic sense for them to do that.

As far as the poor are concerned, this is an attempt to get rid of Medi-Cal
and substitute it with private health insurance, and same with the other
state-funded programs that help the poor.

The way it stands now this is an awful idea, and I'd only support it if it was
truly universal and did not require the poor to give up the state support they
have now.

If this proposed program doesn't actually help the poor then what is the
fucking point?

~~~
AnthonyMouse
> Health care spending can and has bankrupted many people who are very well
> off compared to Medi-Cal recipients, so if they were forced to give up Medi-
> Cal to get $12k of UBI per year, and then spend that money on private health
> insurance, and spend even more of that money on food (since they'd also have
> to give up food stamps), it makes absolutely no economic sense for them to
> do that.

So then they wouldn't do that. It says you can't get the UBI if you get Medi-
Cal, it doesn't say you can't decline the UBI and continue to get Medi-Cal,
right?

The entire point of a UBI is that it replaces all of these hacked together
assistance programs with something with less overhead (no eligibility testing
bureaucracy) and less economic distortion (giving restaurant workers food
assistance when they already have access to food and could better use the
money for transportation or education etc.)

If you like Medi-Cal, propose it as a "public option" \-- instead of getting
it if you're poor, you get it if you pay $6000/year or whatever it actually
costs the state. Then people can take their $12,000 UBI, use $6000 to buy
Medi-Cal and have $6000 left over. But then it lets people to choose _not to_
, e.g. because their spouse's employer-subsidized private insurance would
cover them for an additional $4000/year and they'd rather come out ahead by
$2000.

Having both is silly because it doesn't get rid of that inefficiency. If you
instead wanted people to have a $12,000 UBI _and_ $6000 in medical coverage
then just give them $18,000 and let them decide whether they want to buy $6000
in medical coverage or something else. You can debate the amount of assistance
but it still makes no sense to force people to buy specific things.

------
trothamel
It seems that the line at the bottom about the 10% VAT on many goods and
services seems just as interesting as the UBI (especially when the UBI seems
to exclude many of the poorest Californians).

I wonder how they will administer the VAT without other states cooperating
with them.

~~~
nerdjon
I am very confused about the math of this, unless California has a surplus of
taxes coming in.

Without even taking into account the existing tax rate in California, wouldn't
this need an average of 10k of spending per person a month getting this to
work out?

Then again there are enough restrictions on this (seemingly largely the ones
that would actually benefit the most from this) that it actually works out...

~~~
Jtsummers
A VAT would apply to businesses as well as people. Considering the amount of
manufacturing in CA, this would be quite significant.

~~~
nerdjon
Ok so that is the part that I was missing.

So that does spread that out a bit if you take into account anyone buying
those manufactured goods outside of the state.

Then that personally raises the question on how this would scale nationwide,
the cost to the business would ultimately be largely pushed down to the
consumer. Maybe that is getting a bit ahead of ourselves, but I keep hearing
about a UBI and I struggle with seeing the logistics of it.

------
cabaalis
States solving their own problems. If it's also properly funded by the state,
it's the way it should be.

~~~
snazz
It says it will be funded by a 10% VAT.

~~~
Aloha
Which is only a couple percent more than existing sales tax

~~~
hedora
Current sales tax is ~7.5%. Sales + VAT will be 17.5%, right?

~~~
dbbk
For reference, VAT in the UK is 20%

------
someonehere
We’re due for a recession here in California. I follow the real estate gurus
and they’re a bit perplexed on why we aren’t in one yet.

The timing of UBI and an impending recession are a bad formula for the state
and will definitely change the political landscape of California. ie likely to
see some politicians voted out of office and flipping the majority.

------
zentiggr
Good - let's have a real world test and see whether there is something behind
UBI as a concept.

And perhaps this'll be the first program to survive the trolls and nay-sayers
who will find the smallest niche failures and sspout the "If ANYONE falls
through the cracks it's a FAILURE!"

~~~
claudeganon
It’s not UBI if you means test a lot of the poor out of it, which this bill
actually does. Instead, it’s just going to push them even further away from
things like stable housing, as landlords jack up rents to eat it all up.

~~~
hedora
Also, it’s funded by a regressive tax. Also, my reading says everyone’s rent
(edit: and child care!) is going up 10%, but hopefully, I’m wrong:

> _It is the intent of the Legislature to fund the CalUBI Program with a
> value-added tax of 10 percent on goods and services, except medicine,
> medical supplies and equipment, educational materials, including textbooks,
> tuition or fees for education, food, groceries, and clothing._

------
whiddershins
Ubi ... it’s right there in the name: universal.

A ubi test that isn’t universal seems potentially counterproductive to me.

------
burlesona
I’d be a lot more interested if they’d fund it via property tax instead of
VAT. Since California has such severe restrictions on housing construction,
anything that puts more money in people pockets just gets absorbed by higher
rent. The entire CA game is the fixed supply of housing eating up most of the
economic output of individuals who aren’t grandfathered in. So if you’re going
to fix it, collecting against the property owners who have spent decades
greatly enriching themselves by making it prohibitively difficult for anyone
new to move in would be a good start. Then when you go to try and remove the
barriers to housing supply, they’d suddenly have a lot more reason to get on
board (or at least get out of the way).

~~~
reaperducer
_I’d be a lot more interested if they’d fund it via property tax instead of
VAT. Since California has such severe restrictions on housing construction_

If you increase property taxes, doesn't that make housing developers less
likely to build high-value, high-density housing? And don't the property tax
increases on existing housing just get passed on to the renters?

I've never rented in California, but I've rented in 13 other states, and in
the handful of cities where I've lived during a property tax increase, the
rent went up quite a bit (especially Chicago). One place even itemized it on
the rent statement.

------
Ohn0
Do any other hackers wonder what the overhead is for collecting / enforcing a
new tax (VAT)?

Like others have mentioned, it seemed like the benefits of UBI were to
eliminate some redundancy from similar programs that require more
administration. Creating a new tax seems non-trivial, but on the other hand
would be easy to ratchet up down the road.

------
m0zg
The worse the better I say, as long as it doesn't spill over into other
states. The long suffering CA taxpayer will wake up en masse one day, and
sweep this bullshit aside, at which point CA might become livable again.

------
mech1234
The precautionary principle seems to be thrown to the wind here.

The unintended consequences of such a policy are far-reaching and poorly
understood. UBI has seen a lot of coverage in the media recently and gets a
lot of people excited on social media. Most coverage of it is shallow, but
even the most in-depth studies of it that have been performed have been too
small scale to have any bearing on the reality of transforming an entire
state's economy.

It would be nice if we lived in a post-scarcity (or sufficiently close)
economy where we could afford these things. I doubt we do.

~~~
paulgb
Although both a smaller payout and a smaller state, the Alaska Permanent Fund
is interesting precedent.

[https://en.m.wikipedia.org/wiki/Alaska_Permanent_Fund](https://en.m.wikipedia.org/wiki/Alaska_Permanent_Fund)

I agree that the CA proposal feels reckless, though.

------
ahi
I think UBI is kind of dumb, but UBI on the state level is just plain stupid.
If you don't control your currency, UBI is a non-starter.

~~~
purplezooey
Maybe we should start issuing Golden State Doubloons

------
papreclip
Why only $1000/month, why not make it $10,000?

------
dev_hacker
There is no hope of something like this passing in the US. If it doesn't
disenfranchise at least a few hated social groups its flat out un-American and
the people won't stand for it. Fuck over felons, recent immigrants, black
people, or someone like this and you might have a chance of getting it
through. I'll grant you that California is its own weird little world, so yeah
maybe its possible there, but for sure this won't fly in the US.

~~~
randyrand
> Fuck over felons, recent immigrants, black people, or someone like this and
> you might have a chance of getting it through.

This is surprising to me. Which recent california laws are you referring to
that have done this?

~~~
dev_hacker
Ah no, I am not saying California is up to this, but the rest of the US
definitely is. I am from VA and can assure you that people would not be
comfortable giving money equally to say, sex offenders or black people, as
their WASP neighbor here. California is not like the rest of the US at all, so
I withhold my opinion on what could pass there.

------
claudeganon
I’m in favor of UBI, but it only works with floors on housing, healthcare, and
possibly even food (which are more or less in place through ag subsidies
anyway). All of this will just be eaten up by rents and rising healthcare
costs, and means testing it makes it even more absurd, as it will exclude most
vulnerable populations.

Given the recent state-wide rent control, it’s hard to see this as anything
other than a sop to landlords.

~~~
jrbuhl
Wouldn't it be easier to move away from the big cities and the big rents with
ubi?

~~~
claudeganon
No, because that’s where the vast majority of jobs and other services are
located.

------
madengr
Think there is an illegal immigration problem in CA now? Wait until UBI.

~~~
papreclip
If you buy into some of the logic I've seen kicking around recently that:
>housing shortage prevents poor people from participating in centers of high
productivity, which reduces their economic output

then attracting as many warm bodies as possible to these "centers of
productivity" will result in an explosion of wealth production

------
option
Evan Low introduced this bill. He is on the ballot right now, please vote
accordingly

~~~
dave5104
Sadly, I'm not in his district, so I can't vote for him.

------
bassman9000
how many people will move to Texas after this, to vote the same policies?

------
m0zg
Funny how HN readers can be at the same time overwhelmingly for Andrew Yang,
and against the measure that implements one of the selling points of his
campaign. :-)

~~~
dang
"HN readers" aren't a person. They're a large population sample that is
divided on divisive issues the same way any other large population sample is.

------
aty268
If you own real estate in California, I would sell while you still can.

~~~
johnnyjukey
Proposition 13 treats all California property taxes the same. Voters could
change that in 2020

