Universal Income.

[psionl0]

An article I saw posted - or maybe that I posted, I forget - upthread makes it quite clear that a UBI is absolutely not a negative income tax.

Negative Income Tax is one way that a UBI could be implemented. There are other ways as well.

 

[Squeegee Beckenheim]

How has 'many' snuck in there?

We have seen many people in this thread contend that nobody loses from a UBI. I think this is utter ********. What about you?

That's the post you were posting in support of.

I already quoted someone saying that there wouldn't need to be any tax rises to introduce UBI.

Can you do so again, please?

I'm not sure in practice that's how it would work. For a start people's tax codes wouldn't change quickly so they would still be being taxed at the 'getting the UBI back' rate until they updated that and that's going to be a screwed system in a pandemic anyway.

Income tax is taken directly out of your paycheque. How do you imagine people will continue to pay that tax while not getting a paycheque?

Having to wait for your money is a policy decision that could be changed in the welfare system.

It's a red-tape thing. It's the time taken to process your claim, do checks, all that kind of thing. None of which would be required if you're already getting the money and nothing has to change.

Plus UBI isn't apparently enough to live on anyway.

Perhaps it wouldn't be at first, but the final goal of a UBI is to make it enough to live on.

I mean I get that it's 'simpler' but that's only if you kind of ignore that the complexities in the welfare system also serve a purpose like giving you enough money to pay your rent etc and would still have to exist to deal with the things that UBI doesn't.

Nobody's pretending that it's a magic elixir that will solve every single problem. But it will simplify the system, which means it'll be a better safety net because it will always be there when needed, and fewer people will fall through the cracks.

The benefit trap issue is only addressed if the UBI isn't recouped from low earners but some people here seem to argue it will be. Maybe the problem is that we have multiple people here who are putting forward different visions of how they see UBI working?

Yes, there are different people in this thread and each is an individual with their own thoughts and opinions, rather than being a facet of a hive mind.

 

[Squeegee Beckenheim]

Since covid-19 a lot of people have switched to working from home as well. This idea would have been unthinkable to employers in the past but it also seems to be working well.

I read an article a day or two ago which was about a trend of workers now used to working from home and the benefits it brings (more money and time due to no commuting, for example) actually quitting jobs that are forcing them back to the office. Some employers would like to (particularly those out of touch with modern technology, and those who feel they need to keep an eye on their employees otherwise they'll stop working), but I think the genie is going to be hard to put back into the bottle.

 

[Archie Gemmill Goal]

As a review:
In Post #754 dirtywick said:


In post #756 psionIO said:


I took that to mean that no one who was currently employed would end up with more money, based on psionIO's statement that dirtywick would not have extra money.

I'm assuming that while dirtywick probably makes decent money, he's probably more in the middle income/workling class range. (Apologies if this is incorrect.) I base this on his statements that he works overtime to pay for his truck. This is something I've seen a lot of blue collar Caterpillar workers do. The white collar workers don't have that option as they are salaried. So that's where I presume dirtywick falls. (Again, aplogies if inaccurate.)

psionIO did not say that it will be recovered through taxes from those with higher incomes, so I'm asking if this is the case for all incomes.

For a real world example: My wife, until recently, worked half time (20hrs) and brought home about $1200/month. Supposing UBI of $1000 and that being recovered by increasing taxes...If she will end up with $1200/month in the end, then effectively, the first $1000 is taxed at 100%.

And if she would only lose $200/month, why would she work when she can just take the UBI?

And, by the way, taxing $4000 at 25% is really taxing at an additional 25%. $4000/month is $48000/year. A single person is not taxed on the first $12400/year in the US. (Married couple: $25,100.) So you are already paying tax on half to 3/4 of that $48,000.

No, I'm following your logic Tom the issue is that the responses are at odds with one another. One is telling us that working people will be no better off and others that they will be no worse off.

The idea that nobody working would be better off under UBI does not match with my understanding of what UBI is or is meant to be.

To achieve what Psion is suggesting (that low income working people won't be better off) is going to need some pretty high marginal tax rates for those with low incomes to offset the UBI. That's why it made no sense to me.

 

[Archie Gemmill Goal]

Archie is employing the "I can think of an incredibly stupid way to do this, therefore it won't work" strategy.

I'm not thinking of any incredibly stupid way to do it, I'm ASKING people to explain what they are proposing as the way to do it. And they are telling me things that seem like incredibly stupid ways to do it. Ways that are contradictory and impractical as well.

This proposal and how to pay for it is fundamentally simple. It's a wealth distribution system. It's certainly stupid to think that everyone will have the same income before and after putting this in place. That would obviously be pointless. Paying for it is tax the rich, pay the poor. You may not even need to restructure the tax brackets for the lowest paid 80% of the population.

Yes, that's what I THOUGHT it was. But people here are telling me it isn't. So maybe point the finger at them instead of me?

Since most countries have tax brackets that don't tax people below the property line and UBI is initially about that much, then the current tax brackets wont touch anyone that who live solely on UBI. For people who are in a bracket where they pay taxes it works the same as just getting a raise. If for some segment of the better paid workers you decide it's too big a raise then you adjust the marginal tax rate for that bracket.

Let's say a country shoots for a higher goal than the poverty line. To avoid the issue of the government immediately taking back the money they just paid out, you set the first taxable bracket above the UBI income level.

How do you get upper earners to pay for it? Taxes. And guess what, figuring out how to do the tax has already been done. Governments know how to raise money through taxes. They know every point where money is flowing and how to divert it via taxes. This will be a political point and which segment of the population winds up paying the most will depend on who pushes back the most. When politicians have debated large proposals in the past do you think the tax arguments are actually about figuring out how to tax? They aren't, they are about who to tax.

Yes great. So maybe instead of having a go at me have a go at the people here who are saying silly things like you won't have to raise taxes and nobody who is employed will be any better off? Because those make no sense.

 

[Archie Gemmill Goal]

That's the post you were posting in support of.

No I was posting in reply to your claim that nobody had said it

Can you do so again, please?

EDIT: I'll put it in here for you

Psion claimed: "The only tax rises would be to offset the UBI which would leave employees in the same position as before. The rest is just a straight swap between complex pensions/jobseeker allowances and UBI."

So... no tax rises to introduce new funds into the system or to fund the administration of the system. The only tax rises needed are to offset the UBI from employees.

Income tax is taken directly out of your paycheque. How do you imagine people will continue to pay that tax while not getting a paycheque?

They will get their UBI and be taxed on the UBI the way they would have been taxed had they been employed. If you have ever changed jobs or quit jobs mid tax year you will know that tax codes don't update immediately and that generally it ends up with having to settle up at the end of the tax year with a refund or a payment.

I mean it's not a dealbreaker for UBI but it isn't going to be much if any better during a pandemic than a proper welfare system would be.

To explain what I mean let's say you get UBI of £1000 a month and earn £2000 a month. If your tax code means you pay 35% of that in Tax and NI etc then when your income drops to £1000 a month you are still going to get taxed at 35% on that until the system sorts itself out.

It's a red-tape thing. It's the time taken to process your claim, do checks, all that kind of thing. None of which would be required if you're already getting the money and nothing has to change.

It's a policy red tape thing though. There's nothing to stop them paying out UC much quicker. they just choose not to. Tories going to Tory.

Perhaps it wouldn't be at first, but the final goal of a UBI is to make it enough to live on.

And as I mentioned before that's when I think the maths becomes complicated and it gets expensive. 'Enough to live on' is quite an elusive amount to pin down.

Nobody's pretending that it's a magic elixir that will solve every single problem. But it will simplify the system, which means it'll be a better safety net because it will always be there when needed, and fewer people will fall through the cracks.

Oh there are some people definitely pretending it's a magic elixir. I'm always sceptical of claims that new things are going to simplify the system because in my experience they rarely do, they just get bolted on to the existing complicated setup. As for falling through the cracks... I'm convinced the cracks are there by design not by accident.

My fear with UBI is that it seems to be attacking the wrong end of the problem. It may well be an improvement on the existing welfare system but the issue for me is that nobody actually wants to do the hard yards of taxing the rich to pay the poor. Until that is overcome to me it doesn't matter what system you put in place and I think there are people who seem to think that UBI gets around this issue somehow. At least we both seem to agree that it doesn't.

Yes, there are different people in this thread and each is an individual with their own thoughts and opinions, rather than being a facet of a hive mind.

Having your own opinion is one thing. Having completely contradictory explanations of how a proposed system works isn't really helpful to understanding. Especially when countering one proposal then seems to get assumed as opposition to all of them.

 

[Squeegee Beckenheim]

No I was posting in reply to your claim that nobody had said it

I actually said that I hadn't seen anybody saying that, in reply to lionking's post.

EDIT: I'll put it in here for you

Psion claimed: "The only tax rises would be to offset the UBI which would leave employees in the same position as before. The rest is just a straight swap between complex pensions/jobseeker allowances and UBI."

So... no tax rises to introduce new funds into the system or to fund the administration of the system. The only tax rises needed are to offset the UBI from employees.

Without the context, it looks to me like they're talking about a subset of people, not everybody.

They will get their UBI and be taxed on the UBI the way they would have been taxed had they been employed.

Why would the government start taxing UBI for these people? How do you see that working? Would they get less UBI than other people? Again, PAYE is taken straight out of your paycheque. Without the paycheque, nobody is going to take anything out of your paycheque, because there is no paycheque to take it out of.

It's a policy red tape thing though. There's nothing to stop them paying out UC much quicker. they just choose not to. Tories going to Tory.

Whether or not the Tories are making the time required longer, time is still going to be required to process claims. If something is means tested, then the actual testing of the means needs to be done.

And this is still ignoring the fact that a crisis such a covid puts a strain on the system that wouldn't happen with UBI.

And as I mentioned before that's when I think the maths becomes complicated and it gets expensive. 'Enough to live on' is quite an elusive amount to pin down.

The calculation has already been done. That's what Universal Credit is supposed to be.

As for falling through the cracks... I'm convinced the cracks are there by design not by accident.

I think you're right. UBI would prevent that.

My fear with UBI is that it seems to be attacking the wrong end of the problem. It may well be an improvement on the existing welfare system but the issue for me is that nobody actually wants to do the hard yards of taxing the rich to pay the poor. Until that is overcome to me it doesn't matter what system you put in place and I think there are people who seem to think that UBI gets around this issue somehow. At least we both seem to agree that it doesn't.

As has been said several times in this thread, it's important not to let the perfect be the enemy of the good. If it's an improvement to the existing welfare system then it's a good thing, regardless of whether or not it eliminates systemic inequality.

The only people who have used the word "utopia" in this thread are those mocking the very idea of UBI.

 

[Belz...]

I took that to mean that no one who was currently employed would end up with more money, based on psionIO's statement that dirtywick would not have extra money.

That's psionl0, with lowercase L and zero, not IO.

 

[Belz...]

The last time I tried to explain that this is all mathematical smoke and mirrors I seemed to enrage you.

What?

I have no idea what you're talking about, but it seems that even when we're on the same side of an argument you can't resist the urge to take jabs at me. Seems like you're the one with some rage to vent.

 

[Belz...]

One is telling us that working people will be no better off and others that they will be no worse off.

You understand that those can be one and the same, right?

 

[Archie Gemmill Goal]

I actually said that I hadn't seen anybody saying that, in reply to lionking's post.

And i pointed out that they had. I mean seriously it's not that important to the matter but it's been said.

Without the context, it looks to me like they're talking about a subset of people, not everybody.

No tax rises is not referring to a subset of people or indeed any people but taxes. And no tax rises isn't referring to a subset of anything. it was quite clear.

Why would the government start taxing UBI for these people? How do you see that working? Would they get less UBI than other people? Again, PAYE is taken straight out of your paycheque. Without the paycheque, nobody is going to take anything out of your paycheque, because there is no paycheque to take it out of.

They wouldn't START taxing anything. It would already be taxed. Because tax is worked out on an annual basis but paid on an ongoing basis there is going to need to be some kind of reckoning at some point. If it isn't taxed at source then there is going to be a tax bill at the end of the tax year to be paid. I'm not sure if that's better or worse.

Whether or not the Tories are making the time required longer, time is still going to be required to process claims. If something is means tested, then the actual testing of the means needs to be done.

If they wanted to turn it around quickly they could do. I mean you are still going to have to wait up to a month until UBI day anyway. And you are still going to have to apply for other benefits to actually have a living amount of money.

If the government wanted people not to be short of money then they could for example have pre-approved UC claims before the means test checks were complete.

And this is still ignoring the fact that a crisis such a covid puts a strain on the system that wouldn't happen with UBI.

Possibly. But COVID is once in a century. And the system is still going to be strained with people who need all the other benefits that UBI doesn't cover.

The calculation has already been done. That's what Universal Credit is supposed to be.

It isn't though, is it? My UC payment is about half of my monthly mortgage bill.

I think you're right. UBI would prevent that.

So would a properly designed welfare system though.

As has been said several times in this thread, it's important not to let the perfect be the enemy of the good. If it's an improvement to the existing welfare system then it's a good thing, regardless of whether or not it eliminates systemic inequality.

The only people who have used the word "utopia" in this thread are those mocking the very idea of UBI.

I agree, but my point has only been that we can improve the existing welfare system as it stands without the need for UBI. UBI in and of itself doesn't fix the issues and if its going to be a hard sell to convince people and introduce it then are the marginal benefits of it you mention worth the hassle? Would it be better to just focus on actually improving what we have now?

 

[TomB]

Why would the government start taxing UBI for these people? How do you see that working? Would they get less UBI than other people? Again, PAYE is taken straight out of your paycheque. Without the paycheque, nobody is going to take anything out of your paycheque, because there is no paycheque to take it out of.

In the US, your unemployment benefits are subject to income tax. You have the option of having it withheld from your check. If you don't you'll end up paying at tax time.

Lots of things are subject to income tax that do not involve a paycheck. Capital gains, for one. Interest income for another.

 

[Matthew Best]

Having thought about it a bit more I'm guessing that what psionl0 is suggesting is something similar to the way Child Benefit is dealt with in the UK.

Child Benefit is a universal benefit - anyone with a dependent child can claim it - it's worth £1,099 a year (and an additional £728 for each extra child). But if you earn more than £50,000 a year, this benefit gets gradually clawed back in tax, and if you earn £60,000 it is completely recovered.

So, it's a universal benefit that everybody can get, but nobody who earns more than £60,000 a year actually gains from it. As a result, most people who earn more than £60,000 don't bother to claim it.

I assume that UBI would be treated in the same way, but perhaps with a much lower threshold.

 

[psionl0]

So, it's a universal benefit that everybody can get, but nobody who earns more than £60,000 a year actually gains from it. As a result, most people who earn more than £60,000 don't bother to claim it.

I assume that UBI would be treated in the same way, but perhaps with a much lower threshold.

Means testing a UBI negates one of its advantages. The cost of administering it goes up since you need bureaucrats to assess the rate of UBI that each individual is entitled to.

A better way to administer the UBI is just pay it to everybody at the same rate (far less bureaucratic intervention required). Better off wage earners simply repay it through higher taxes. This is just a simple change in the tax scales and does not require extra administration.

 

[Archie Gemmill Goal]

Having thought about it a bit more I'm guessing that what psionl0 is suggesting is something similar to the way Child Benefit is dealt with in the UK.

Child Benefit is a universal benefit - anyone with a dependent child can claim it - it's worth £1,099 a year (and an additional £728 for each extra child). But if you earn more than £50,000 a year, this benefit gets gradually clawed back in tax, and if you earn £60,000 it is completely recovered.

So, it's a universal benefit that everybody can get, but nobody who earns more than £60,000 a year actually gains from it. As a result, most people who earn more than £60,000 don't bother to claim it.

I assume that UBI would be treated in the same way, but perhaps with a much lower threshold.

Unless they've changed it very recently that's not quite how CB works either. The system is that you get paid the CB and your salary throughout the year (if you have asked to receive CB) and if you are over the £50k limit then you are supposed to file a self assessment tax return at the end of the tax year to pay the tax charge associated with the CB.

Its a bit of a stupid system and not one I would suggest is replicated for UBI.

 

[Matthew Best]

Unless they've changed it very recently that's not quite how CB works either. The system is that you get paid the CB and your salary throughout the year (if you have asked to receive CB) and if you are over the £50k limit then you are supposed to file a self assessment tax return at the end of the tax year to pay the tax charge associated with the CB.

I'm not quite sure how that's different from what I said.

 

[Matthew Best]

Means testing a UBI negates one of its advantages. The cost of administering it goes up since you need bureaucrats to assess the rate of UBI that each individual is entitled to.

A better way to administer the UBI is just pay it to everybody at the same rate (far less bureaucratic intervention required). Better off wage earners simply repay it through higher taxes. This is just a simple change in the tax scales and does not require extra administration.

I'm not quite sure how that's different from what I said.

 

[psionl0]

I'm not quite sure how that's different from what I said.

It sounded like the Child Benefit gets reduced if your income was more than £50,000 so that "most people who earn more than £60,000 don't bother to claim it" (why wouldn't they bother to tick the box?).

I guess the main difference is that UBI is not a tax rebate. (It could be structured as such but it would be more bureaucratically intensive to decide how much money is put in anybody's bank account or whether it is just a pure tax reduction).

 

[Archie Gemmill Goal]

I'm not quite sure how that's different from what I said.

Maybe i misread your 'gradually clawed back' line as saying it was taken back throughout the year.

 

[Matthew Best]

Maybe i misread your 'gradually clawed back' line as saying it was taken back throughout the year.

No, it gets gradually clawed back between an income of £50,000 and £60,000. If you earn £50,000 some of it gets taken back in tax, and by the time you get to £60,000 it all gets taken back in tax.

Obviously it wouldn't work if people earning £49,999 got £1,099 CB and people earning £50,001 got nothing.