Negative income tax (more emphasis) + basic income (less emphasis) would be a better system. A negative income tax would encourage people to work. Basic income by itself may just remove some barriers to working but may not result in a change (basic income > costs).
Negative income tax would be a blatant subsidisation of labour, which has it's own issues. In another sense, it's just welfare, but a highly regressive one. More income would go to those who are poor but in work, and less to those for what ever reason (like disability) unable to work.
If you were to further lower the costs of labour, you risk stymieing actual economic growth which comes from improvements in efficiency. For instance, why use a machine when you can just hire more people?
Also what would the effect on monetary policy be? If this was funded though an income tax, would the lower savings rates of the poor, put more money in circulation, thus increasing inflation? Could you account for the change in prices driven by an increase in demand from those who's labour isn't actually valuable enough to sustain their consumption.
I don't claim to have the answers to welfare, but I really think that we should aim for a solution that provides as little market distortion as possible. I sincerely think that a negative tax would be a huge unwelcome and ineffective distortion in the labour market.
> More income would go to those who are poor but in work, and less to those for what ever reason (like disability) unable to work.
Isn't that a desirable outcome ? Shouldn't the able bodied person who is working obviously earn more ? Giving people incentive to work not only helps them rise up but also prevents their exploitation in case they try going to underground economy.
> For instance, why use a machine when you can just hire more people?
If people are more efficient business will use people over machines. I don't think machines are be default always a good choice. What matters is the efficiency.
Free market capitalists who otherwise like machines and automation criticize the minimum wage laws for the same reason. Minimum wage laws force business to invest more in automation by outlawing hiring of people who could compete with machines over cost.
> Isn't that a desirable outcome ? Shouldn't the able bodied person who is working obviously earn more ? Giving people incentive to work not only helps them rise up but also prevents their exploitation in case they try going to underground economy.
This happens anyway in our current system. Someone who's disabled and unable to work already earns less than someone who's working 50 hours a week in a minimum wage job. Negative income exacerbates that.
> For instance, why use a machine when you can just hire more people?
Politics could become a reason -- the people who are being replaced by machines become a powerful force, have a strong work-based ethic (different from "work ethic"), and care more about their well-being than the overall efficiency of the economy.
Either way, I'm curious to see more adoption of UBI - even if it is a small, homogeneous population. Maybe working class beneficiaries of UBI could dedicate a larger portion of their time to volunteering, or re-training.
One reason that comes to mind is that it would just allow the rich to become richer by providing a cheap workforce subsidised by the tax payer. Imagine if a company wanted to pay less than minimum wage, hire a bunch more people and have their new workers' pay topped up by a negative income tax. It'd just be getting people to work for the sake of working while tax payers subsidise profits for business owners.
This is only when you view income in isolation. Negative Income Tax requires the person to work, while Basic Income doesn't. Moreover Negative Income Tax could support very unproductive jobs that the economy doesn't really need.
No, NIT doesn't require people to work unless you make that a specific requirement.
For example, if you have a negative tax of 25% on income below $40k, unemployed people on $0 income will receive a $10k tax credit. This is equivalent to $10k Basic Income with a 25% tax bracket up to $40k earned income, since in both cases people earning $0 get $10k and people earning $40k get $40k.
You could make it a requirement to work, but then people could just get trivial jobs for $1 just to get the tax credit.
Because then the rich people can't afford to buy dozens of excessively expensive cars, or own several houses, or have other people do all the menial chores for them, ...
>People who are unlucky to be earning just enough to be excluded in one way or the other, from these UBI handouts
Universal Basic Income means there are no such people, by definition.
>as in say an universal extra $10,000 bump to _absolutely everyone_ regardless of income class ( if that is what they even _mean_ when they say UBI; I doubt it is )
Yes it is. That is the definition of UBI.
>a) their kids cannot get into those choice daycare centers which weren't so crammed only a few years ago
>c) their favorite restaurants are always booked or have lines out the door ( a perennial theme in SF ) [2]
Your reference contradicts your point. It says SF has more restaurants per household than elsewhere, so one would assume they are much less crowded on average.
Moreover, if services start to become crowded as a result of increased demand, then new ones will open to cater to that demand.
> d) the rent pressure is greater for a smaller inventory of listings in the desirable neighborhoods
There's plenty of affordable desirable housing available, the problem is that it's nowhere near the jobs people need to pay for it. If you pay people Basic Income, they can afford to move out of the expensive cities which in turn reduces demand for housing within them.
The rest of the world is perfectly happy with universal healthcare, strong social safety nets, and "handouts" to children.
How do you think Brexit was sold to the British? Do you realize that the Brexiters (and all the European nativists) have been selling their agenda primarily on the basis that it would mean more handouts?
America is different. And we all know what that difference is. Americans are very much unique in rejecting basic social guarantees out of the fear that the "wrong people" will benefit.
I don't think that this is due to "fear that the 'wrong people' will benefit". I think the fear is that such programs will sap our will to improve. We fear becoming European. We fear becoming docile wards of the state. Keep in mind that everyone in the US descends from people that decided that the risk of exposure, wolves and bears was more tolerable than staying with their peers.
We now stand at a crossroads unseen by past humanity: unnecessary man. How do we deal with the fact that a portion of our population, perhaps even half, is quickly becoming a millstone about society's neck? Ideas like UBI are our first attempt to deal humanly. Soon we'll probably add to UBI voluntary sterilization or other population controls. How will we collectively in the West solve this? Burdening our State coffers by maintaining useless populations might not be the best thing.
>In other words people are mostly fine with any entitlements to the poor & disadvantaged as long as it doesn't threaten their way of life or become a competitive element to the comforts & privileges they are accustomed to.
Threats to people's "way of life" is the central idea to your post, which I think is a great springboard for specifically cultural issues that surround UBI. At the very least, cultural inertia is a real barrier to this kind of policy, even if we grant it status of being strictly better economics. The article also fixates on the "people will become lazy"-thinking as a culturally entrenched barrier, but I think your post has other real barriers that are harder to bring to discussion.
>people don't want a handout-receiver...suddenly being able to afford the same niceties of life that they see themselves slaving at their 9-to-5s for.
The "basic income" part of UBI suggests that "niceties of life" are not paid for. How austere that definition - whether it includes your examples of daycare, economy flights, and popular restaurants - is up in the air.
>universal extra $10,000 bump to _absolutely everyone_ regardless of income class ( if that is what they even _mean_ when they say UBI; I doubt it is )
I'm also deeply suspicious of how "universal" we really mean; just consider how the article's "experiment" really samples only from the "best case" of entrepreneurial, well-educated professionals (w/ families).
As for your post, an assumption is that universality w/r/t income is the only meaningful way of looking at it. For example, single and family households have very different "basic needs." Following from the "per-need" basis, reasonably, shouldn't UBI handouts be larger with more dependents? This seems to get to part of your worries, given the examples of daycare, etc. Being young and single, my assumption is that UBI is relative to single living expenses, but the article makes a point about people raising families. I doubt it's economically feasible to pay up-to family household needs for everyone - taxes and social benefits make that distinction. Are there still cultural worries w/r/t UBI that scales on dependents? What does that do to incentives and cultural perception on raising families? Maybe UBI will eliminate income-class related cultural issues that plague us this century, but it'll shift those cultural lines over other lifestyle-related boundaries (i.e. single v. married v. family)?
>People who are unlucky to be earning just enough to be excluded in one way or the other, from these UBI handouts ( which already happen in disguised means and forms, but more on that later [1] ) but not enough - from their wages & other sources of income - to be living a comfortable life will...
This is awkwardly phrased and hard to parse to me. Being excluded from UBI after some amount of income contradicts your later ideas. Also, "work" that pays that low is assumed to be at the margin where either automation eliminates it, or it's so undesirable (flipping patties) you're free to fall back on UBI living to find other undesirable work you like. That's also assuming you really don't have skills, which leads me to ask: do we consider some level of skill-acquisition a basic need and thereby include "education" costs in UBI?
>e) their friends cannot afford to socialize as frequently as they once did ( or worse, have moved to a different part of the country simply because it is no longer affordable to remain ) due to the same wage pressures
I don't know what friends you have, but society as it feels like to me already poses career-advancement choices against staying close to friends, especially those that don't work in the same field. Once you reach some level of career success, the need to maintain it naturally constrains your mobility w/r/t friendship (diversity) in some ways. Having a UBI-line only makes the "some level of career success" explicit when you make more than that line and like the lifestyle. On the other hand, wouldn't UBI let friends be patient about finding work that keeps them together? You and I may argue about the value of our friends, but certainly there are very meaningful friendships out there on the status of "threats to lifestyle" that you insist. But now we've come to a turn: originally, the article claims UBI will incentivize working over "patiently waiting," but w/r/t friendship we have a different case to consider.
Negative income tax (more emphasis) + basic income (less emphasis) would be a better system. A negative income tax would encourage people to work. Basic income by itself may just remove some barriers to working but may not result in a change (basic income > costs).