| No, it's not. UBI and GMI (guaranteed minimum income) can have very different economic consequences. > “universal basic income” aimed at counterbalancing the automation of work and toward “guaranteed income” aimed at addressing economic and racial injustices. The problem that UBI solves neatly is the very high effective marginal tax rate for the poor. NIT (Negative Income Tax) can also be designed to have the same effects (only the transfer mechanism is different. The guaranteed income leaves this intact. It helps with absolute poverty, but poor people get easily 70-90% effective marginal tax rates for work. You can adopt any system and have exactly the same amount of transfers, but UBI and NTI are harder to justify for the conservative layman despite the fact that prominent economists like Milton Friedman were big on NTI. ---- A simple UBI can be framed as * Everyone receives $X per year after taxes and pays a tax rate = t. * Income = (1-t)Pretax + UBI (eq1) A simple NIT can be framed as * Define a cutoff income. Call it a "standard deduction" if you wish. * If you make more than the cutoff, then you deduct the cutoff from your pretax income and pay tax rate = t on the remainder. So Income = pretax - t(pretax-cutoff) * If you make less than the cutoff, you pay no taxes, and in addition you get some fraction k of the difference back. Income = pretax + k(cutoff-pretax) * If you earn exactly the cutoff, then nothing happens. You keep your pretax income. We can do some simple algebra to rewrite NIT income as above: income = (1-t)Pretax + t*cutoff (eq2)
below: income = (1-k)Pretax + k*cutoff (eq3)
source
https://www.reddit.com/r/Economics/wiki/faq_basicincome |