An enormous tax increase only if you figure there would be no compensating decreases in government expenditures. Unemployment benefits (60B$), medicare (600B$), social security (800 B$), welfare benefits (300B$) are just a start. [1] That's just at the federal level; there are a lot of state expenses that would go away as well. And there would be a lot of administrative costs eliminated, and a lot of corporate welfare programs could be cut as well, because everyone would have access to basic income.
> An enormous tax increase only if you figure there would be no compensating decreases in government expenditures. Unemployment benefits (60B$), medicare (600B$), social security (800 B$), welfare benefits (300B$) are just a start.
That's one of the more compelling arguments for BI: it's more sensible than the piecemeal programs we have. And don't forget the various tax credits and deductions that could go away, too. If done well, BI could be revenue-neutral or better.
But in practice, unless you delete all of those in the same bill that introduces basic income, you're going to find yourself stuck with both the basic income and those welfare programs.
Without trying to be too flip, there is a poverty industry who benefit from every dollar that passes through the social service programs. Its naive to think that these bureaucrats NGO officers are going to sit idly by while their livelihood is taken away.
Average SS monthly income is around $1500, or $18K annually. That kind of puts a floor on Basic, because if you propose a pay cut to all retirees, you would have a mob of cranky oldsters on your back.
It seems like leaving old age social security alone for old people leaves a far higher chance of this being passable (and is arguably more fair). But don't give them BI on TOP of it by any means.
42 million people receive the type of social security you get for being old and having paid in. This takes the number of people you'd need to pay BI to from 320 million to 278 million.
It reduces the cost of social security on the federal government by 23% of the SS budget(814B) to count out a beneficiaries who aren't retired we save saved: $187 billion dollars
Between taking retirees off the roles, and this savings from knocking out disability, we're down to a total required revenue of 3.3 trillion, and a savings of 187 billion dollars in cut programs.
So find that other 3.113 trillion dollars and we're in business :D
Since pacta sunt servanda, SS would need to be grandfathered. But that does not put a floor on BI, you are free to set BI below SS.
This may not sound fair, but is no more unfair than introducing new environmental regulation without punishing all past acts which would be in violation of new regulation.
Cutting Medicare to give people BI would leave the people who need Medicare in the lurch, because there's no way in hell that you're going to get the medical treatment you need on that $12k.
Medicare provides for the sick by levying a disproportionate cost:benefit on the healthy. Distributing BI to the healthy and sick alike in lieu of Medicare eliminates that.
You might also notice the "Total Federal Spending" line in that chart you linked is $3.6 trillion...a full $200 billion short of the $3.8b mark.
The article proposes that everyone (healthy or sick, young and old) pay $350/month out of their BI for health insurance. Would that be enough to replace Medicare?
Sure, but all you've done is keep medicare in place and reduce BI to $7800/year. Note that medicare is only available to people over 65 in most cases - it isn't generalized health insurance, so now anyone under 65 needs to pay for health insurance on top of the Medicare tax. Which is exactly how it is now anyway.
First off, I think the idea of BI is great, I just don't think we have the real taste of what that would look like yet from someone who knows how to write bills. Lots of handwaving from all corners.
I don't see how cutting medicare could work to solve income?
The reason we have socialized medicine for old people is it's too expensive for insurers to carry. $350 a month is not an annualized cost for EVERY american, it's for non old people. That's including sharp obamacare type subsidies still for many age brackets. I know even my (early 30's) healthcare premiums are above that.
I don't see how cutting someone who's reliant on a $2,642 dollar a month income social security retirement payment is going to work. At best, I see social security retirement largely staying at it's current level. Cutting Social Security Disability (and all the anti fraud apparatus around it) is likely very possible though
>would be a lot of administrative costs eliminated
Those costs are rolled up into the SSA numbers in the federal budget. A portion of the medicare cost is the medicare overhead, etc. So it's not the budget numbers + overhead: the budget numbers are inclusive already
I think a wage floor (minimum wage still), strong policing of unpaid internships, and a smaller form of BI is possible, possibly without any tax increases or with far more moderate ones, especially if many state responsibilities are taken over at the federal level.
I just don't see the list of things that can really be cut nor the total take we'd get from that to work with.
If we don't touch SS Retirement or medicare because lets be realistic if we want something passable:
We can reduce the rolls of people who need to be paid to 278 million people.
We can get 396 billion by cutting welfare (but if we do this, children get the same bi, and that's not being sure there aren't protective services in here which would need to still exist) at the federal level, we get $187 billion by cutting the people who don't get SS because they are old.
That's a total of $585 billion, with a needed sum of 3300 billion total (aka, 3.3 trillion).
This means we're still at a deficit of 2715 billion (2.715 trillion) dollars
Where else does that come from? (I'm asking, legitimately)
With the money I can see that could be freed up at the federal level, I see a yearly benefit of 585B/267M -> $2191, or 183 a month.
This is an equivalent (for fulltime job holders) of a raise of the minimum wage by 1.10 an hour.
No, enormous tax increase regardless, with a balanced budget. If tax revenues are currently $2.8 trillion, and basic income alone would cost $3.8 trillion, then even if government eliminates all other spending, taxes would still have to increase by $1 trillion in order to only pay for basic income.
Edit: The US Government does run a deficit, but it was $680 billion in 2013. A deficit of $1-2 trillion would be new.
It's worth noting that increased economic activity would mean collecting more taxes even at the same rates. It's probably nonetheless true that, at the numbers given, there would have to be an enormous increase in tax rates - just trying to keep all the pieces in view.
Medicare expenditures would in no way decrease as a result of the implementation of a BI (unless you plan to pay for BI by causing the deaths of most of our senior population, as they couldn't pay for medical services or medication on $12K). Also, tax revenue would decrease as at least a portion of the population would simply drop out of the workforce.
BI, like socialism and communism, sounds good on paper to a certain set of people. It won't work in the real world. I have always wondered why otherwise intelligent and successful people keep bringing up ideas to give others' money away, and then I recently heard casino mogul Steve Wynn's interesting explanation for it (that they believe that everything should be given to everyone, because everything has been given to them):
> as they couldn't pay for medical services or medication on $12K
While their numbers do seem a bit low, they are not off by an order of magnitude. Canada's healthcare system averages $375/month expenses across all citizens. [0]
> tax revenue would decrease as at least a portion of the population would simply drop out of the workforce.
Even if the bottom 50% of earners drop out of the workforce, this is a loss of tax revenue of 2.25% [1]. So the first-order effect of reduced tax revenue isn't meaningful.
> It won't work in the real world. I have always wondered why otherwise intelligent and successful people keep bringing up ideas
It would be one thing if there was broad empirically-based consensus that BI "won't work in the real world" but if so you have not brought that evidence with you today. It is probably best to refrain from unsourced assertions that people who disagree with you are stupid.
> Canada's healthcare system averages $375/month expenses across all citizens.
That sounds great, but that's an apples to oranges comparison. Medical care in the US is drastically more expensive than in Canada, and unless we implement single payer (which will not happen) those numbers will not come down. Therefore $12K (which also has to cover living expenses) won't come close to supporting the medical expenses of the Medicare set in the US.
We are discussing fucking BI. Is BI more likely than single payer? "Medical care in US is drastically more expensive" is a problem to solve to implement proper BI, not a deficiency in BI proposal.
I didn't say that at all. The point is that people who were born lucky - parents that provided for them, or maybe they easily and quickly found success in their career etc., tend to have a world view that because things came relatively easy to them, that everything should be handed to everyone else.
BI as a supplement to wages and other resources already exists in the form of welfare and the like, its just a matter of reducing the conditions to nothing.
somebody mentioned 600 a month for BI, you could do something lower without needing to quadruple tax revenue
From the calculations above, that requires 5050*267 million more government revenue than we have, or 1.35 trillion dollars (after cutting the non-old age part of Social Security, and the welfare part).
How are you going to raise that 1.35 trillion dollars?
Also at 600 a month, we arguably cannot drop minimum wage.
My conclusion does match my statement (that BI is generally a bad idea, and wouldn't cause significant decreases in other social programs).
As far as the rest of your comment, by reducing the conditions to nothing, you dramatically expand the expenditures while lowering the tax base by encouraging a portion of the population to not bother being productive. People like to say that welfare acts as a form of BI, but that is far from the truth. Most welfare programs in the US contain requirements that recipients at least look for a job, stay drug-free, etc. With BI, people that don't want to work will simply move in with each other. $12K/yr isn't really enough for 1 person to have a good life; however $60K/yr for a household of 5 with no taxes taken out comes alot closer.
Can $12k/year actually replace medicare? Medicare is health insurance, so at the very least we would have to have a competitive market for self-health-insurance from which retirees could buy coverage, before Medicare could be scrapped.
As a citizen of South Korea, nationalized health insurance is no brainer at all, but it doesn't need to be as expensive as US.
South Korean National Health Insurance Service covers every citizen (not just for elderly, not just for poor) and is 1.5% of South Korean budget. Medicare is 15% of US budget. Medicare may provide better quality, but cost/benefit is unclear to me.
Another non-obvious change would be the elimination of minimum wage, which would improve corporate profits, which should (theoretically, at least) increase the taxes they pay.
[1] http://www.usgovernmentspending.com/us_welfare_spending_40.h...