[jbkly7]

One of the differences is that a basic income eliminates the "welfare cliff". With any kind of means-tested system, there's a reduced incentive to increase your earnings because every dollar you earn reduces your benefit. With a universal basic income, there's no disincentive to work extra because you receive the benefit no matter your income, and earning an extra $5k is $5k more in your pocket rather than being offset by your benefit going down.

[zanny]

That isn't an actual answer to the question, though. With UBI, you get a fixed amount and just end up paying more taxes to make up for getting the UBI in the first place. NIT means instead of taxing you for the amount of money they give you you just stop getting the money.

[eru]

You can set up your tax system to exactly mirror the net effects of UBI. Negative income tax is just one possible implementation of UBI.

[aninhumer]

Indeed. For example, the parent's suggested scheme is equivalent to a $15k basic income, with a 25% tax on earned income up to $60k.

The only real difference between the two is the constants each framing leads us towards. The above scheme is fairly mild, but if you shrink the window down to $30k, which initially sounds progressive (less money for richer people right?) you actually end up with the equivalent of a 50% tax band on income below $30k.

I prefer the Basic Income framing for this reason.

[CydeWeys]

Yes, you figured out why I picked the numbers I did. It's somewhat surprising how high the full phase-out amount has to be for things to work: It basically needs to go to several times the poverty level in order to make the marginal taxation on poor people of acceptably low levels.

[CydeWeys]

There is no welfare cliff in any of the alternatives that I proposed. That's why I had the phase-out over $60K of income: So that you keep most of each marginal dollar of income across the entire income spectrum.