The best arguments I have seen for a UBI is as an insurance policy against rapid, technologically-induced unemployment. Anton Korinek (https://www.korinek.com/) makes a persuasive case - as in a scenario worth hedging against, not Road to Damascus conversion experience - that the capacities of modern AI systems may displace human cognitive, and soon physical, labour faster than human beings can be reskilled. You lose your job as a tax accountant, reskill as a barista, then find that robots are serving better lattes than you will ever be able to make, and only the most swanky coffeeshops employ the (Olympic athlete-equivalent skill level) humans anymore. So then you'd probably want UBI to cushion the transition to whatever you are going to do with the rest of your life. Korinek's proposal, however, is to just have a biweekly income transfer system in place that could be rapidly dialed up as it became apparent such a displacement was happening. In such a scenario a work deterrent effect is not relevant, as there is no point in having unemployment insurance for classes of people who will probably never get gainful employment ever again.
My only issue with Korinek's proposal - and I am someone who finds the rapid work displacement within 10-15 years scenario plausible - is the political difficulty of creating and maintaining such a minimal system without using it. The rapid work displacement scenario at least has the benefit that there would be superabundant profits to tax. Right now it would just be another drain on the treasury for little additional - and if the studies are to be believed actually employment disincentivizing - effect.
As a supplement or replacement to the current social insurance and EITC systems, I agree it's superfluous or a solution worse than the kludge of current programs.
Unfortunately the link to Matt's piece appears to be broken - and when I found it (through Google) it turned out that despite the title the only publicly available part of his post was about LNG and the anti-UBI stuff is behind a paywall. But I am inclined to believe you that it is wrong.
I don't have any objection to your idea of implementing (or is that just increasing?) the UBI by means of an enhanced negative income tax such as the US's EITC. That does seem like a practical way to do it and I don't really see why you don't consider them the same thing.
The difference is the EITC accrues only for paid employment.
I think a UBI would not increase GDP and an equivalent EITC by very little. [And I am considering the two as alternative today, NOT in some future AI/robot humanvworkless future.]
Well, that(EITC) is a stupidly bizarre and pathetic plan! If as a single working age male with no children I declare an income of $0, then (according to the IRS's 'EITC Assistant' app) I am eligible for nothing; but if I declare a "self employment" income of $1, then I am eligible for a $2 tax refund; $1000 gives me $79, $2000 gives me $155, $4000 gives $308, and so on up to $8k giving $600, and then back down with $10k giving $583, $15k giving $201, $17k giving just $48, and back to being ineligible at $18000.
But without the bottom-end income dependence and with decent numbers it could presumably be modified to deliver the equivalent of a proper UBI.
However I think it's almost completely irrelevant whether or not such a plan increases GDP, as the reason for it in my books is just basic fairness; and the test, if any, is just whether or not it increases the health and happiness of its recipients.
I agree with your argument in principle (gut reaction, not deeply pondered) but I think bundling them together has political benefits compared to doing things individually. Of course all these debates are sadly quite fanciful already, so it’s useful to start with the optimal plan and then go from there.
Its not clear form this why you think EITC is better than UBI. EITC is similar to a negative income tax where only employed people can receive it. This of course means that it cannot be used to help those who don't have jobs - which are often the people who need it most.
You mention that EITC doesn't discourage employment. I would argue it can do that, as someone who makes more money in one job can decide to take a break from working for longer than they otherwise would have. However, since its basically a subsidy for working for a specific group, it will encourage employment. But is this really a good thing? One of the possible benefits of UBI is that it gives people the space to focus on other parts of their life, change their living arrangment, go to school, etc. The fact that some people choose to have more leisure time because of it should not be seen as a negative. The goal of economic policy should not be to get people to work harder. We aren't feudal lords talking about feudal serfs, are we? Perhaps the most efficient thing for that person is to take a break. Maybe they value their free time more than the extra money they would make. Is that such a strange thing? Regardless, the point is that it should be their choice. Artificially stimulating people to work more than they otherwise would seems far more likely to me to lead to losses of overall economic utility, not gains.
"(and Libertarians support UBI because it is more efficient) but that's just a stalking horse for reducing net transfers to poorer people so more can be transferred with tax cuts to richer people.]"
Tax cuts don't distribute money to the rich because the money belongs to the people who earn it. Tax cuts allow people to keep more of their own money. You give yourself away with a comment like this. Money belongs to the government and it transfers money to those as it sees fit.
For years, UBI has been promoted as increasing the well-being of people (less stress, more savings, more money for food, ability to enjoy leisure, pay off loans, etc.,) Now that the program doesn't even do what it was intended to do, well that's no problem. Just invent another justification.
What is the justification for income distribution? What are the goals and how are they measured?
I have been opposing UBI and proposing an EITC essentially since I first heard the idea of a UBI. "UBU? Why not a EITC," I said; "same great taste with fewer calories. :)
Now, why I want to make consumption somewhat more equal is a longer, multipart story.
1) Starting from where we are today with a 6% GDP deficit, it's where some of the money to close the growth-sucking deficit has to come from.
2a) Politically, it gives even people who do not benefit _directly_ from real-income improving reforms like merit-based immigration, using cost benefit analysis in making regulatory decisions, congestion taxation and time of day parking fees for urban street and road use, tax on net emissions of CO2 if not offset with a "carbon dividend, freer trade, etc. a stake in their success.
2b) A corollary of 2a) politically, it gives even people who are not harmed _directly_ from real-income diminishing policies like minimum wages, rent controls, restrictions on GMO food, NIMBY-ism, etc., a reason to oppose them.
3) I hold with decreasing marginal utility of consumption. A dollar of consumption is worth less to George Soros that a dollar to someone who made a bad choice of college major. A transfer of $1 from the former to the latter if accomplished at low enough deadweight loss is a net improvement for society.
4a) Part of the tiny utility that Soros receives from that last dollar of consumption is feeling of superiority over the next highest consumption guy.
4b) With less consumption of goods favored by _hoi oligio_ their prices fall and the rest of Soros consumption dollars go farther, so he loses even less utility from the transfer
5) While I agree that Soros earned his money fair and square (in his case even better, he did UK and the world a great favor by keeping UK out of the Euro) some part of his ability to consume is due to luck, so he does not "deserve" _everything_ he has earned.
6) Soros benefits more than our unfortunate college major person from living in a liberal capitalistic democracy with pretty good rule of law and not some socialistic hellhole like Venezuela, so he should pay more of the rent.
"5) While I agree that Soros earned his money fair and square (in his case even better, he did UK and the world a great favor by keeping UK out of the Euro) some part of his ability to consume is due to luck, so he does not "deserve" _everything_ he has earned."
Some luck was involved so therefore we can take everything if politically necessary or advisable This is just envy politics, utopianism and a desire to play God. Luck, fortune or circumstance are facts of life. We cannot control every single aspect of the world, never mind our lives. Admitting that a person may benefit from circumstances they do not control is irrelevant to determining whether they "deserve" something. We all get what we deserve and what we don't deserve. Why do you think economists or politicians get to play God and determine whether what one person got was "deserved"? Even if one person is lucky, it's rare for that luck to be the only (or sole) determinant in the outcome. Do you really think Soros is rich because he got lucky? Mostly he is intelligent, took risks and benefited from circumstances beyond his control. This resulted in him being fantastically wealthy. Divining which one of the 3 was the primary determinant is foolish.
These are not quantifiable goals or measurements you listed, probably because there are none. It's all touchy feely vibes and whether something feels right. Is 50% total taxes too much? Too little? Or does it depends on whether it was deserved or what the people want?
Keeping your own money doesn't have to do with feelings of superiority. This is projection and even if true, who cares? That shouldn't be a factor is determining tax policy.
You were the one who raised desert as a reason not to tax. It's not an unusual consideration, but it is related to praise or blameworthy behavior. We think the employee who performs well "deserves" a raise [If we thought that some good outcome on his watch was just luck, we would not think he deserved a raise.] Folks who favor LVT think it is OK to tax 100% of the increase is value of land; they did nothing to ring it about as so do not deserve.
Separate point, it's really not a good idea to speculate on the motives (and character flaws) of people that disagree with you. People who favor redistributive taxation may or may not be "envious" of the people taxed and it is really irrelevant to the argument.
I mentioned earning money. Deserving it is entirely another matter.
Envy is most certainly at the heart of some wealth redistribution supporters. I’m not impugning your motives specifically though. And yes envy is absolutely relevant to the tax as wealth redistribution argument.
Money is a collective illusion owned by society (the government), who has a responsibility to keep it churning bc otherwise it all gets sucked up to the top.
Fine but money is a proxy for wealth. People don’t count gold bars or cattle as wealth anymore. It’s all about market or liquidation value which is tied to money.
The best arguments I have seen for a UBI is as an insurance policy against rapid, technologically-induced unemployment. Anton Korinek (https://www.korinek.com/) makes a persuasive case - as in a scenario worth hedging against, not Road to Damascus conversion experience - that the capacities of modern AI systems may displace human cognitive, and soon physical, labour faster than human beings can be reskilled. You lose your job as a tax accountant, reskill as a barista, then find that robots are serving better lattes than you will ever be able to make, and only the most swanky coffeeshops employ the (Olympic athlete-equivalent skill level) humans anymore. So then you'd probably want UBI to cushion the transition to whatever you are going to do with the rest of your life. Korinek's proposal, however, is to just have a biweekly income transfer system in place that could be rapidly dialed up as it became apparent such a displacement was happening. In such a scenario a work deterrent effect is not relevant, as there is no point in having unemployment insurance for classes of people who will probably never get gainful employment ever again.
My only issue with Korinek's proposal - and I am someone who finds the rapid work displacement within 10-15 years scenario plausible - is the political difficulty of creating and maintaining such a minimal system without using it. The rapid work displacement scenario at least has the benefit that there would be superabundant profits to tax. Right now it would just be another drain on the treasury for little additional - and if the studies are to be believed actually employment disincentivizing - effect.
As a supplement or replacement to the current social insurance and EITC systems, I agree it's superfluous or a solution worse than the kludge of current programs.
Sounds reasonable for THAT scenario, but we could have a more generous EITC today.
Unfortunately the link to Matt's piece appears to be broken - and when I found it (through Google) it turned out that despite the title the only publicly available part of his post was about LNG and the anti-UBI stuff is behind a paywall. But I am inclined to believe you that it is wrong.
My own reaction to the results of the Altman-funded study is similar to (but less polite than) that of Scott Santens (at https://www.scottsantens.com/did-sam-altman-basic-income-experiment-succeed-or-fail-ubi/?ref=scott-santens-newsletter).
I don't have any objection to your idea of implementing (or is that just increasing?) the UBI by means of an enhanced negative income tax such as the US's EITC. That does seem like a practical way to do it and I don't really see why you don't consider them the same thing.
But however it's done I don't see it as justifiable only on the basis of GDP enhancement but rather on moral grounds as per Gar Alperovitz (eg at https://medium.com/@GarAlperovitz/technological-inheritance-and-the-case-for-a-basic-income-ded373a69c8e )
The difference is the EITC accrues only for paid employment.
I think a UBI would not increase GDP and an equivalent EITC by very little. [And I am considering the two as alternative today, NOT in some future AI/robot humanvworkless future.]
Well, that(EITC) is a stupidly bizarre and pathetic plan! If as a single working age male with no children I declare an income of $0, then (according to the IRS's 'EITC Assistant' app) I am eligible for nothing; but if I declare a "self employment" income of $1, then I am eligible for a $2 tax refund; $1000 gives me $79, $2000 gives me $155, $4000 gives $308, and so on up to $8k giving $600, and then back down with $10k giving $583, $15k giving $201, $17k giving just $48, and back to being ineligible at $18000.
But without the bottom-end income dependence and with decent numbers it could presumably be modified to deliver the equivalent of a proper UBI.
However I think it's almost completely irrelevant whether or not such a plan increases GDP, as the reason for it in my books is just basic fairness; and the test, if any, is just whether or not it increases the health and happiness of its recipients.
I agree with your argument in principle (gut reaction, not deeply pondered) but I think bundling them together has political benefits compared to doing things individually. Of course all these debates are sadly quite fanciful already, so it’s useful to start with the optimal plan and then go from there.
Its not clear form this why you think EITC is better than UBI. EITC is similar to a negative income tax where only employed people can receive it. This of course means that it cannot be used to help those who don't have jobs - which are often the people who need it most.
You mention that EITC doesn't discourage employment. I would argue it can do that, as someone who makes more money in one job can decide to take a break from working for longer than they otherwise would have. However, since its basically a subsidy for working for a specific group, it will encourage employment. But is this really a good thing? One of the possible benefits of UBI is that it gives people the space to focus on other parts of their life, change their living arrangment, go to school, etc. The fact that some people choose to have more leisure time because of it should not be seen as a negative. The goal of economic policy should not be to get people to work harder. We aren't feudal lords talking about feudal serfs, are we? Perhaps the most efficient thing for that person is to take a break. Maybe they value their free time more than the extra money they would make. Is that such a strange thing? Regardless, the point is that it should be their choice. Artificially stimulating people to work more than they otherwise would seems far more likely to me to lead to losses of overall economic utility, not gains.
"(and Libertarians support UBI because it is more efficient) but that's just a stalking horse for reducing net transfers to poorer people so more can be transferred with tax cuts to richer people.]"
Tax cuts don't distribute money to the rich because the money belongs to the people who earn it. Tax cuts allow people to keep more of their own money. You give yourself away with a comment like this. Money belongs to the government and it transfers money to those as it sees fit.
For years, UBI has been promoted as increasing the well-being of people (less stress, more savings, more money for food, ability to enjoy leisure, pay off loans, etc.,) Now that the program doesn't even do what it was intended to do, well that's no problem. Just invent another justification.
What is the justification for income distribution? What are the goals and how are they measured?
I have been opposing UBI and proposing an EITC essentially since I first heard the idea of a UBI. "UBU? Why not a EITC," I said; "same great taste with fewer calories. :)
Now, why I want to make consumption somewhat more equal is a longer, multipart story.
1) Starting from where we are today with a 6% GDP deficit, it's where some of the money to close the growth-sucking deficit has to come from.
2a) Politically, it gives even people who do not benefit _directly_ from real-income improving reforms like merit-based immigration, using cost benefit analysis in making regulatory decisions, congestion taxation and time of day parking fees for urban street and road use, tax on net emissions of CO2 if not offset with a "carbon dividend, freer trade, etc. a stake in their success.
2b) A corollary of 2a) politically, it gives even people who are not harmed _directly_ from real-income diminishing policies like minimum wages, rent controls, restrictions on GMO food, NIMBY-ism, etc., a reason to oppose them.
3) I hold with decreasing marginal utility of consumption. A dollar of consumption is worth less to George Soros that a dollar to someone who made a bad choice of college major. A transfer of $1 from the former to the latter if accomplished at low enough deadweight loss is a net improvement for society.
4a) Part of the tiny utility that Soros receives from that last dollar of consumption is feeling of superiority over the next highest consumption guy.
4b) With less consumption of goods favored by _hoi oligio_ their prices fall and the rest of Soros consumption dollars go farther, so he loses even less utility from the transfer
5) While I agree that Soros earned his money fair and square (in his case even better, he did UK and the world a great favor by keeping UK out of the Euro) some part of his ability to consume is due to luck, so he does not "deserve" _everything_ he has earned.
6) Soros benefits more than our unfortunate college major person from living in a liberal capitalistic democracy with pretty good rule of law and not some socialistic hellhole like Venezuela, so he should pay more of the rent.
"5) While I agree that Soros earned his money fair and square (in his case even better, he did UK and the world a great favor by keeping UK out of the Euro) some part of his ability to consume is due to luck, so he does not "deserve" _everything_ he has earned."
Some luck was involved so therefore we can take everything if politically necessary or advisable This is just envy politics, utopianism and a desire to play God. Luck, fortune or circumstance are facts of life. We cannot control every single aspect of the world, never mind our lives. Admitting that a person may benefit from circumstances they do not control is irrelevant to determining whether they "deserve" something. We all get what we deserve and what we don't deserve. Why do you think economists or politicians get to play God and determine whether what one person got was "deserved"? Even if one person is lucky, it's rare for that luck to be the only (or sole) determinant in the outcome. Do you really think Soros is rich because he got lucky? Mostly he is intelligent, took risks and benefited from circumstances beyond his control. This resulted in him being fantastically wealthy. Divining which one of the 3 was the primary determinant is foolish.
These are not quantifiable goals or measurements you listed, probably because there are none. It's all touchy feely vibes and whether something feels right. Is 50% total taxes too much? Too little? Or does it depends on whether it was deserved or what the people want?
Keeping your own money doesn't have to do with feelings of superiority. This is projection and even if true, who cares? That shouldn't be a factor is determining tax policy.
You were the one who raised desert as a reason not to tax. It's not an unusual consideration, but it is related to praise or blameworthy behavior. We think the employee who performs well "deserves" a raise [If we thought that some good outcome on his watch was just luck, we would not think he deserved a raise.] Folks who favor LVT think it is OK to tax 100% of the increase is value of land; they did nothing to ring it about as so do not deserve.
Separate point, it's really not a good idea to speculate on the motives (and character flaws) of people that disagree with you. People who favor redistributive taxation may or may not be "envious" of the people taxed and it is really irrelevant to the argument.
I mentioned earning money. Deserving it is entirely another matter.
Envy is most certainly at the heart of some wealth redistribution supporters. I’m not impugning your motives specifically though. And yes envy is absolutely relevant to the tax as wealth redistribution argument.
Ha “their own money”
Money is a collective illusion owned by society (the government), who has a responsibility to keep it churning bc otherwise it all gets sucked up to the top.
Fine but money is a proxy for wealth. People don’t count gold bars or cattle as wealth anymore. It’s all about market or liquidation value which is tied to money.
Sure. Of course. Still doesn’t mean anyone has a right to it beyond what society determines