It depends, if you have some essential resource where supply is constrained then you might expect inflation. On the other hand goods that are readily available like food or oil shouldn't see any significant difference.
All resources are constrained. Food production requires land which is constrained. No one dies from hunger this days. People receiving UBI will just start buying organic food which is going to increase its price. Rent prices will soar as well because of constrained supply. So do salaries. So do other goods. And boom - there goes inflation.
Why? What mechanism would drive that? In the West we already have more food available than we can reasonably eat. Margins in agriculture are wafer thin driven down by competition.
Compare that to property where there is a limited supply and people are constrained in what they can buy by their salary and ability to get a mortgage.
I'm working and I don't get any basic income. I actually lose income because of taxes. So when you give me 1k a month extra, where exactly will this money come from you say?
If UBI is just a redistribution scheme and aggregate income stays the same, how is UBI than different from the various 'social' countries in Europe such as e.g. Sweden and Finland?
Those countries have progressive income taxes and social benefits for those without work. Isn't this the same as what UBI would look like if aggregate income would stay the same?
I don't understand your assumption about a current high marginal tax rate for poor households. I would say that in a progressive tax system, the marginal tax rate decreases when one's income is lower.
In your other post you state that Finnish effective marginal tax rate for poor persons is more than 80%. Do you have a source for that?
Effective marginal tax rate, not marginal tax rate. EMTR is what how much you actually get when taxes and reduction of welfare with increasing income is taken into account.
It's in Finnish, but if you go to page 13 there is a nice graph. x-axis is wage, EUR/month, y-axis is effective marginal income tax in year 2015 for single person household who pays rent 440 EUR/month. Effective marginal tax rate is the red dotted line.
In page 20 you can see even what single adult with a child can have.
I was actually wrong, the effective marginal tax rate can spike above 11% in some cases.
> UBI removes high marginal tax rate from poor households.
How so? I understand the "it's the same, just with less bureaucracy" camp wants everybody to get UBI, but everyone that's not below a certain threshold will essentially pay all of the UBI back via increased taxation.
So if you get $1000 in welfare now and you earn money, this changes the amount of welfare you receive. I understand that. How does that change if you get $1000 in UBI and for every buck you make, you'll pay essentiall $1 in taxes? You'll still only actually have more money when you're > $1000 on income.