| I'm not sure which of the two cases you're addressing; I'll respond with one comment assuming each. If we are talking about case 1 (a fixed BI tax rate with all proceeds distributed), then when one individual stops working the basic income goes down by 1% as you say. > So, a rational actor would stop working. I don't see how this follows. A rational actor weighs the 1% decrease in BI plus the 100% decrease in earned income, and whatever that means for quality of life, against their preference not to work. > Similarly, if 95 out of 100 stop working, then the other 5 have little incentive to work, because their income is basically funding everyone else. This is not case 1 anymore. In this scenario, one of the other 5 quitting reduces the BI by 20%... of the remaining 5% of the original level. It has no effect on how much any individual is paying in. Meanwhile, with the BI amount being 1/20th its original level, some of the other potential workers are probably getting interested in working again. This is exactly a negative feedback loop. |