
New Bill Would Give Nearly Every Californian $1,000/Month - Reedx
https://www.newsweek.com/new-bill-would-give-nearly-every-californian-1000-month-similar-andrew-yangs-freedom-dividend-1488547
======
redis_mlc
I read the article.

The problem with any US government plan is the lack of sound policies.

After you start with policy goals, then you can look at UBI, high-density
housing, service industry staffing in the Bay Area, infrastructure
maintenance, etc. together.

Having said that, the most visible problems with UBI that should be addressed
(in policy. see above.) are:

1) Would it further inflate rental prices?

2) Is voting for free money the fatal flaw in democracy that this unattributed
quote says, "When the people find that they can vote themselves money, that
will herald the end of the republic."

Modern Greece is an economic cripple from public sector benefits for example,
as are all US cities. What happens when you expand that to the population at
large?

3) In this proposal, what would be the effect on the industries taxed? Would
people shop out of state? Would they avoid online merchants? etc.

The political issue is that any party that promotes UBI will be accused of
pandering to their base by the other party. And it's an effective argument in
the absence of, again, policy.

I would go so far as to say this. The most patriotic thing that Bay Area
residents could do is to finance Yang or Sanders to create a PAC to design and
promote logical government fiscal policy for 10-20 years, then become the
third political party for elections.

~~~
um_ya
Wouldn't it be great if California implemented some laws contingent on the
funds coming from current waste and abuse? For instance, "UBI must be funded
by reducing current waste and abuse in California". If Democrats wanted to
implement UBI, they would have to work for it, by solving real spending
problems, rather than draining the taxpayer further.

~~~
geofft
How do you define waste and abuse?

~~~
cheez
Things I don't agree with of course!

------
dpc_pw
"The program would be paid for with a state value-added tax of 10 percent on
goods and services, with exemptions for (...)"

VAT is such a PITA (I'm originally European, so I know a thing or two about
it). Tons of additional paperwork, plenty of room for fraud and cheating (like
[https://en.wikipedia.org/wiki/Missing_trader_fraud](https://en.wikipedia.org/wiki/Missing_trader_fraud)
).

Just be honest about it, increase existing property taxes, which people
already pay anyway and are naturally progressive and avoid creating
complications.

Also, I would start with lower amounts, and see what actually happens.

And ... Why wouldn't every capable homeless person from all over US move to
California if they would be paid to do it (and I can't imagine more forgiving
weather for homelessness, anyway)?

~~~
boznz
Property tax would just be passed on to the renters wouldnt it?

~~~
fountainofage
Renters pay market rate for rent. If the landlords can pass on 100% of the
property tax, then the supply is way out of sync with the demand.

~~~
mrep
What? How? If the renter is paying less than the property tax, then the owner
is losing money just on the property alone and not accounting for the likely
mortgage payments. Nobody would ever rent out a place if that was the case.

~~~
fountainofage
First of all, no one said renters are paying less than property tax? But even
if they were, it's still the same logic.

That's just the law of supply and demand. Renters pay the market rate. If an
owner can't afford to rent at that market rate, then as you noted, they go out
of the renting business. You'll find if you run the numbers on properties in
SF, landlords are banking on property appreciation. The market rents don't pay
the ownership costs, usually by a huge margin.

~~~
mrep
> First of all, no one said renters are paying less than property tax?

You just said "If the landlords can pass on 100% of the property tax, then the
supply is way out of sync with the demand". For growing areas, why would any
investor develop any land to increase housing supply to rent out if the
property tax alone would cause them to lose money based on the money they
could make renting out places?

~~~
fountainofage
The economic term is "deadweight loss" and the most ideal scenario (outside of
not having it) is to have both the supply and demand side share the deadweight
loss equally. However, if either curve is out of sync with the other, then the
portion of the deadweight loss paid shifts. So if a landlord can pass on 100%
of the property tax, then demand is dramatically and catastrophically way
outpacing supply. This is a bad situation to have if you want an efficient
market where buyers have lots of choices and options.

Edit: I see where you might be confused - I'm talking about passing on 100% of
the property tax. In an ideal scenario, landlords would have to cut into their
profits to pay for the property tax that tenants wouldn't. But in California,
we obviously don't want a market where buyers have lots of options, so
apparently everyone is ok with landlords passing along 100% of the property
tax cost to the tenants.

------
JauntTrooper
30 million adults in California x $1,000 x 12 months = $360 billion / year.

20% of adults are on Medicaid though, so if they're excluded it's $288 billion
/ year.

California's total current budget is around $210 billion. So taxes would more
than double.

On average each adult's taxes would go up by the amount of the UBI. The
specifics of who would bear more of a tax burden would depend on how it's
taxed. Under this plan, taxing consumption and excluding Medicaid recipients
would mean the tax burden would fall disproportionately on low income
households.

~~~
speedplane
> 30 million adults in California x $1,000 x 12 months = $360 billion / year.
> 20% of adults are on Medicaid though, so if they're excluded it's $288
> billion / year.

This is the real fear that progressives have about UBI... that it's a
replacement for government services. Converting government healthcare into an
equivalent check will effectively take away healthcare from millions of
people.

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kingkawn
I do not understand the logic of excluding people who already receive social
support benefits like Medicaid, as they are the ones who would benefit the
most

~~~
RaptorJ
Well I think you've identified the 'logic' exactly -- use UBI as a wedge to
dismantle the welfare state.

~~~
cmendel
...You think that the policy of "Give everyone 1000 USD per month" is designed
to _dismantle?_ the welfare state?

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jmpman
I’ve always thought that this is going to hit illegal immigrants hardest.
Rents on the low end are going to rise by $1000/month, and those without the
subsidy aren’t going to be able to compete. Or California could provide
$1000/month to illegal immigrants, but I doubt that would pass even in
California.

~~~
DougN7
It’s like nobody understands supply and demand

~~~
speedplane
> It’s like nobody understands supply and demand

Folks that use supply and demand principles to argue against UBI don't seem to
understand themselves.

If everyone is given $1,000/mo, it does not necessarily follow that living
costs will also increase by $1000/mo. For that to happen, the additional
$1000/mo would need to actually increase everyone's demand for services, which
is generally not the case. Having more money generally does not make you want
something more, it just makes it easier to afford it. If more people can
afford something and start purchasing it in greater numbers, then yes, the
price will increase, but they are also getting something the thing of value in
return.

Put another way, giving everyone $1000 will likely increase prices, but the
increased prices will be less than $1000.

~~~
erik_seaberg
Supply and demand break down where increasing supply is practically illegal.
As long as there's a severe shortage of housing, landlords can demand as much
as the top _n_ th percentile of renters are able to pay, because there is no
competing landlord who will take a lower price. If this somehow doesn't drain
California dry, it'll be interesting if this enables lots of frustrated
marginally-employed people to move to areas with vacant housing (and no jobs,
but so what?)

------
klipt
In the Bay Area, this would probably just increase rents by $1000/month
because the housing market is very inelastic.

~~~
tehlike
great time to introduce state-wide rent control.

~~~
ajmurmann
Or finally build some housing where it's most in demand.

~~~
katmannthree
Modest housing at that, not the "luxury" apartments that are springing up
everywhere.

~~~
yenwodyah
Any new housing is good, even if it's luxury; when people move into luxury
apartments, it relieves demand on wherever they were living before, lowering
prices.

~~~
erik_seaberg
This. If we refuse to build luxury housing, people who could afford it will
just outbid everyone on whatever we _do_ build, because they need to live
_somewhere_. And it may look like they're springing up everywhere but we're
barely treading water, the absolute numbers still aren't keeping up with
influx.

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yellow_lead
That's interesting. I would consider moving to California to do nothing if it
passed.

~~~
throwaway2048
Good luck living on $1000 a month anywhere in California

~~~
onlyrealcuzzo
I think you could maybe do it if you lived in a garbage can in Joshua Tree and
ate a lot of beans.

~~~
yellow_lead
I was thinking of a dorm or hostel. My food and rent could potentially be
covered, leaving me to work on personal research or a business from cafes.

~~~
sixothree
That sounds very different than "doing nothing".

~~~
yellow_lead
Apologies, I was thinking froma GDP perspective.

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Rebelgecko
Interesting that they'd pay for it via something regressive like sales tax
(maybe a bit less regressive because it doesn't include groceries, but _still_
)

~~~
refurb
If you make food, housing, education and healthcare tax exempt, it’s not
regressive at all.

~~~
fountainofage
Taxing anything at a flat rate without regard for a person's ability to pay is
going to pretty much wind up as a regressive tax. Not saying this is good or
bad, just that it is what it is.

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alpineidyll3
Gradschool stipend for all? ;P The knock on effects of this type of policy are
basically impossible to predict when instituted in something giant and diverse
like CA imo. I don't think the experiment would cost much though or endanger
much. It's too bad laws can't be introduced on an experimental basis with
measurement policies.

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justlexi93
So the Bill benefits anyone spending less then 10k/month on the non exempted
things...

I make about this much and feel this type of tax may actually help me spend
better.

If they added additional exemptions for local and US goods this could be
really neat.

------
purplezooey
Honestly can we just build some housing. Vote out your state senator if he/she
voted against SB 50. That's the way more urgent issue.

------
dragonwriter
It excludes recipients in programs that cover well over a quarter of the
state’s population, so, no, not “nearly every Californian”.

------
thedance
Ah yes, Yang gathered "a surprising amount of support" and I guess nobody was
as surprised as Yang, who came in eighth place in New Hampshire behind Tulsi
Gabbard with a number of votes indistinguishable from none after getting 1% of
votes in Iowa. As we can see Yang's UBI platform is sweeping across the
American imagination.

~~~
akvadrako
Yang got 5% in Iowa. 1% is for the second count when you are supposed to focus
to the top vote getters.

------
RickJWagner
Increasing sales tax 10% in a state with super-high cost of living does not
seem like the right move.

------
mike50
Original source required.

------
irjustin
I'm all for UBI. I definitely think there are bigger things to tackle like
healthcare, but there's absolutely nothing wrong with trying to push this
front as well.

FWIW, I had an interesting discussion where UBI is not a socialist construct
but actually more born out of capitalism to keep the masses happy.

~~~
akvadrako
UBI isn’t socialist at all - it’s very market oriented and reduces the power
of government.

This is why many of the earliest supporters we’re libertarians like Friedman
and Murray. Though they usually called it negative income tax, the output
curves can be made the same.

------
sergiotapia
Under this proposed bill how are they going to prevent illegals from claiming
this benefit? I didn't see it mentioned in the article.

~~~
daenz
Why do you think should they prevent illegals from benefiting?

~~~
sergiotapia
Why do you think illegals should benefit from a foreign government? If I
suddenly moved to Estonia, should I be entitled to benefits from that
government? I don't think I should.

~~~
daenz
>Why do you think illegals should benefit from a foreign government?

I don't think that, I am undecided.

------
013a
UBI is often combined with the idea that increases in automation hurt job
growth, especially low income ones.

But, of course, this bill isn't funded through tax increases on businesses or
the wealthy. Its funded through a tax increase on non-essential goods and
services.

Insane.

~~~
Retric
These can be functionally equivalent as profits are eventually spent by
somebody. The real question is not what general tax system you use, but rather
what you exempt from the taxes.

That and how much profit from other areas ends up in California vs profit from
California ending up in other areas etc.

------
blackrock
How about an alternative idea.

The cost of housing is insane. Prop 13 protects those that were able to buy a
home when prices were cheaper, but it screws over the future generations.

Is this fair?

How about the state pays the remainder of housing costs, after a basic
commitment amount is met?

Say, a person buys a house. He should be responsible for the first 20 years of
payments, which is based on a percentage of his net earnings, like 35% to 40%.

If he stays there for 20 years, and completes the mortgage program, then the
house is his. The government will pay the difference, and close out the loan.
He will need to continue to pay the property tax to live there, but that’s now
like a cheap rent.

The unit must be his primary residence. He cannot rent it out for 20 years. He
can transfer it to an immediate offspring or spouse, like a child or wife,
upon his death.

I chose 20 years, because this is a long enough time to make a commitment to a
location, without being forced to work for 30 years to pay off the loan. And a
35-40% of net, so that he isn’t house poor.

So he can start the program when he is 25 years old, and by the time he is 45
years old, then the house/apartment/condo is his.

This now would tie the price of housing to the price of median pay, instead of
some arbitrary market rate.

The short sighted thing that politicians fail to see with the housing crisis,
is that it destroys the future fabric of American society. People get priced
out of housing markets, and cannot raise a family, because everything is just
too expensive.

We need a different way to look at things. The current method is flawed, and
has outlived its usefulness.

~~~
refurb
Starting at 25?

What if they start a family and need a bigger place?

What if they get a different job and need to move?

