[grahamburger]

This is the thing I really don't get about UBI. It really, really doesn't remove means testing. Your tax burden is still means based, and that determines whether your ubi is net positive or net negative. So again, your net benefit decreases with increased outside income, because you're paying more in taxes.

[ThrustVectoring]

It's not means testing that's the problem. The problem is that a linear combination of benefit programs with a below-unity benefit-to-income slope has an above-unity slope, which means that making an additional dollar disqualifies you from more money than the dollar gives you. The benefit programs as a whole aren't designed holistically to avoid this (and other) traps, so any welfare overhaul that consolidates multiple independent programs into a systematic whole should solve these problems.

[dllthomas]

And even before unity-in-dollars, it can be way below unity-in-utility for opportunities available.

[dragonwriter]

> This is the thing I really don't get about UBI. It really, really doesn't remove means testing. Your tax burden is still means based

There's a degree to which this is true, but there is a radical difference between tax system "means testing" and that with existing means-tested public benefit programs. With existing poverty support programs, its quite possible to lose nearly (and in some cases even more than) $1 in public benefits for each $1 in outside income (and much more at certain breakpoints), and to do so while your total income is under the federal poverty level.

OTOH with stae and federal income and payroll taxes together, you can -- in a relatively high income tax state like California -- currently reach a maximum marginal rate (including the employer share of medicare taxes, and assuming that payroll taxable income and income taxable income are equal, which both overstates the tax rate on nominal income and ignores minor differences between the income those two taxes apply to) of 55.8%, but it takes $1 million in taxable income to reach that point (some UBI proposals would add higher maximum marginal rates, at even higher income levels.)

So, sure, the tax system reduces the incentive for earning additional income, especially at higher income levels; the problem UBI address is that existing poverty support programs do much more to reduce the benefit for earning additional -- or even any non-benefit -- income, and they do it at poverty levels.

(And, on top of that, they add -- with each program -- additional layers of bureaucracy to enforce those rules, rather than letting the tax system be the single point in which means are considered.)

[imtringued]

With any kind of percentage based tax you're paying more taxes with more income. That's by design and it would still apply if we didn't have any kind of welfare system.

[dllthomas]

If you're paying for the BI with a tax on income, then yes there is effectively still a phase out. But it's the slowest possible phase out.