[smountcastle]

I'm curious why you don't think that a basic income would accepted politically? If it were provided to everyone without regard to their other sources of income it would differ from other approaches like welfare. I realize that the money has to come from somewhere, so perhaps a transition to a consumption tax rather than income tax would work. Of course the basic income would need to be significant enough to offset the increased cost of consumption for basic needs.

[JonFish85]

Once people saw the cost of the program, I think it would cause a great deal of outrage. I've done the back-of-the-envelope math here on HN several times, so I don't really care to do it again, but essentially it would dwarf our current budget (which is already spending beyond income).

The cost is enormous. I believe if you taxed everyone whose net worth is over $1b at a 100% rate, you could pay for this program for just under 2 years.

And if you're talking about "everyone gets the same amount", remember that you have to collect it back, so you have the overhead of giving a person $1 just to collect it back again.

[minthd]

The key for this to be possible is a big reduction in the cost of living. Robots,automation and other tech , combined with the right regulations, could possible reduce cost of living by 80%-90%. Under those assumptions, won't basic income become possible ?

[refurb]

reduce cost of living by 80%-90%

Relatively speaking, our cost of living has already been reduced by 80-90% since the late 1800's. The problem is, wealth is relative, not absolute.

[minthd]

True, but given no other job, decent living conditions(but not being rich) plus lots of free time won't be such a bad deal for many.

[frobozz]

Have you factored in the reduction in cost from the removal of means-testing and other red tape? If it starts at the same level as current unemployment benefits, and the income tax threshold is lowered by the same amount, then it would be cheaper.

[JonFish85]

Here's the copy-paste of my post a couple of months ago:

Let's do some back of the envelope math here.

316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year.

The budget that Obama just proposed is $4 trillion dollars (and that has no chance of getting implemented in full). Even if we say you can cut half of that out (Social Security, Medicare/Medicaid, etc), let's call it $2 trillion dollars.

So we need $11 trillion dollars of tax money to fund this. The total net worth of US private people is $67 trillion or so[1]. The aggregate net worth of the top 400 people in the USA is $2.3 trillion[2]. You could take all of their money, and still not even come close to paying for the program for ONE YEAR.

At that point, you start having to come down hard on the upper middle class. The top 25% owns roughly 73% of the wealth in the country, or ~$48 trillion. If you tax their NET WORTH at 25%, you could fund the program for a year.

Pretty quickly you're going to run into a situation where you're cutting a check to everyone, then collecting the money (and more) back in taxes. And in this case, it's terribly inefficient.

On a small scale, a program like this probably works well. On a large scale, it would be a disaster.

[1] http://en.wikipedia.org/wiki/Financial_position_of_the_Unite.... [2] http://www.forbes.com/forbes-400/

[chimprich]

Where did you get the figure of $30k/person from? My understanding of basic income is that you'd get only a very, well, basic level of income from it somewhat equivalent to basic unemployment benefits now. In the UK you get something like £65 JSA + £70 Housing Benefit a week which works out something like $10k/year. That's $3 trillion according to your figures[1], or a total budget of $5 trillion. That's a substantial increase to be sure and would be a massive social change but rather more feasible to fund.

[1] In reality you presumably don't pay a full amount to minors.

[JoeAltmaier]

Actually printing money is pretty cheap. The issue isn't the imaginary points; its the goods and services. Can we produce what people want and need, without them working in factories? I think that answer is Yes.

[zanny]

This is something that people against basic income fail to acknowledge, that basic income is not a strict expense. It is redistribution. You cannot just line item it as a tax expense because if you implement it properly (automated, no bureaucracy, no middle men - best done by detaching the funding and payout) you are effectively adding your 1k or whatever a month per person right back into the economy.

And for most people, the stimulus of spending 1k vastly eclipses the recession of a billionaire losing 1k. The market pressure of demand by those who had none would generate so much economic growth it offsets a huge portion of the tax "cost" of basic income.

The real cost is not the figure in how much you take to give back. It is the opportunity cost - how much potential growth is lost depressing the rich in relation to how much growth is generated stimulating the poor.

And almost every economic report in history shows that is always a positive correlation. That the richer and more equal you make a society the more prosperous it is.

I think HN is a great reflection of that. SV is awash in venture capital, people are getting millions thrown at the most stupid ideas, because we are economically out of sync in this country, where the elites have too much and the masses have too little. This means that the rich are throwing money at random at things hoping to find new ways to get money out of the masses, but when the masses have so little they generate so little market pressure its impossible to gage what they want.

Likewise, you could have the inverse problem - where the masses have huge demand for things, but there is no venture capital left to kickstart meeting that demand. But honestly that sounds completely ridiculous today - in the age of the Internet I see no reason a wholly wealth-equal society could not just kickstart their own VC, because the only difference between one million people giving a dollar and one person giving a million dollars is the immediacy of your responsibility - your VC backer today is a lot more personal than a million funders, but I think Kickstarter and similar projects have shown how the model and work and fail.

But yes, if you talk about universal basic income / citizens dividend / negative income tax / etc in the wrong way, you will trigger all these culturally instinctual emotional responses in people against it.

But it is not like the military, or medicare (or NHS), where pretty much that "cost" is the cost. You spend money on something and hope for the benefits - non-monetary - to outweigh the expenses. In the later case you are hoping that taking care of your people is worth it over making them fend for themselves, but you are actually paying that bill with tax dollars.

Meanwhile, other projects like social security and UBI are just monetary redistribution. SS is much more inefficient than a well implemented UBI, but a huge portion of the money going into that program is redistribution. So you cannot talk about them as these black hole money traps when they are not, unless of course you are the opponent to their implementation.

[logfromblammo]

The political sector is largely a client of the upper class and the rich. A basic income scheme takes power and influence directly from them, and shifts resources to the middle class, while essentially pushing the lower class and poor into the middle class by force of law.

Indirectly, business owners are deprived of cheap labor, while barriers to entry are lowered, increasing competition. The market becomes glutted by zero-employee owner-operated lifestyle businesses. DIY culture explodes, and is primarily motivated by a desire for genuine quality at an affordable price. Companies dedicated to supplying small businesses and home businesses, garage-sized production capital, and small quantities of raw materials win big (i.e. Staples, Home Depot) and those who depend on large business customers and factory-sized production capital lose a little.

The latter type of company pays for a lot of the government's pet projects. You simply can't tax small businesses as heavily without destroying them utterly.

[abathur]

Not sure I'm on-board with basic income yet, but I'll point out that business owners are only deprived of the obligatory/menial/degrading kind of cheap labor that only people who have no other options to put food on the table will do.

I think we'd expect that businesses which can still provide compelling work will have improved access to cheap labor (both due to the falling wage floor, and the ability of workers to refuse menial work in favor of the meaningful). Meanwhile, businesses that provide soul-sucking work will be less-able to rely on the almost-indentured-servitude of the poor and will have to provide more appropriate compensation for their work.

[logfromblammo]

Not quite. Basic income lowers the barriers to entry for small businesses. As "runway" goes, it isn't paved and lighted, but it is firm, flat, and reasonably free from debris. Every person who hangs a shingle on a new small business, and can keep it up indefinitely, is just more lean competition to incumbent businesses. That competition might otherwise represent employees or acquisition fodder.

You can't hire cheap labor if the laborers can always get a better deal by self-incorporating and contracting themselves out to you.

If your choice is between contracting your building janitorial services to one large firm who no longer has any employees and splitting the work among 10 owner-employees, only one selection will actually result in clean toilets.

That is a huge hit to the existing business-owner class. It is no longer possible to skim off the top as a middleman without providing actual value as a manager.

[dragonwriter]

> You can't hire cheap labor if the laborers can always get a better deal by self-incorporating and contracting themselves out to you.

Conversely, laborers can't get a better deal by self-incorporating and contracting themselves out to you if you aren't willing to give them a better terms as contractors than you would as employees. (And even if you are, they still might not be able to get a net better deal, as incorporating isn't without its own costs.)

> If your choice is between contracting your building janitorial services to one large firm who no longer has any employees and splitting the work among 10 owner-employees, only one selection will actually result in clean toilets.

OTOH, if your choice as a laborer is to work as an employee for the firm that has contracts to clean toilets or to be a firm that has no contracts, only one choice will get you a pay check.

Sure, if productivity has reached the state where society can provide a UBI that provides a reasonable living where few people need the work for the style of life they would prefer, you can just opt out. But if productivity reaches that point, the way you get the toilets clean is probably by contracting with the one big firm that owns the janitorial robots and has succeed in best optimizing the design of the hardware and software for them, so that it can undercut any competitor on price.

> That is a huge hit to the existing business-owner class.

UBI funded by a taxation system which doesn't preferentially minimize taxes on capital mitigates the degree to which automation and other capital-favoring productivity changes redistributes the gains of wealth to an increasingly narrow capitalist class; it does so by essentially granting the whole citizenry a share of the gains of capital. But it doesn't seem likely that any level at which is sustainable will actually be a meaningful blow to the existing capitalist class, its just will reduce the degree to which the top of that class rockets ahead in wealth and power of everyone else, including the bottom of that class.

[logfromblammo]

That is exactly the class of people that would complain if everyone else got 3 times as much pie this year as last year, but their slice was only twice as big--ignoring that they ate 80% of the entire available quantity of all pies last year.

They deserve all that pie~ It wouldn't be fair if they got less (to them, a lesser rate of increase is less--same as in government budget proposals)~ Without them, no one would even have any pie~ So they fund politicians to vote against proposals that would result in more pie for everyone.

It wouldn't be an actual blow to the wealthy, who would still get objectively more stuff, but it is a significant psychological injury to someone who may measure their self-worth relative to other people. If they can only buy everything you have ever owned 500 times, rather than 1000 times, they feel less rich, even if you have 3 times as much stuff as you had before.

By my perception, the more wealth you have, the more likely you are to measure its worth relatively rather than absolutely. Small-time investors own $X in stock. Big-time investors own Y% of the company. Small-time workers earn $X per year. Big-time workers earn $X plus Y% of company profits. People from opposite ends of the wealth spectrum don't even calculate with the same math.

[NoMoreNicksLeft]

> If it were provided to everyone without regard to their other sources of income it would differ from other approaches like welfare

The trouble with that is that the math becomes impossible.

If everyone gets equal benefit, then there are only two possibilities:

1. It's so small as to be worthless. Your annual basic income check of $6.28 won't be able to buy combo #3 at the drive thru, let alone combo #1.

2. The tax bill is so huge it strangles the economy. There are 300 billion people in the United States, for them to each get even $1000/year, that's $3 trillion. And what's $1000? Most basic income stooges talk more about 5 figure numbers... so we'd need $30 trillion/year.

Where does that come from? It needs to be up front, since people will lose jobs first, and only decades later will 100% automation actually produce immeasurable wealth.

[edmccard]

>There are 300 billion people in the United States, for them to each get even $1000/year, that's $3 trillion

300 billion? No. There are only around 318 million people in the US.

[NoMoreNicksLeft]

That's dumb.

What can I say, it's still morning.

[smountcastle]

As edmccard said, there are roughly 318 million people in the US. Not all of them are above the age of 18. Let's say adults get $1,500/month plus $500 for each dependent. So a married couple with two kids would get $4,000/month.

If we assume that 24% are under 18, that's roughly 242 million who get $1,500/month (for a total of $363 billion/month) plus the 76 million children that receive $500/month (for a total of $38 billion/month). That's $4.812 trillion/year which exceeds the current annual US budget by a little over $1 trillion.

So it doesn't look like $30 trillion/year. I agree that it seems unrealistic but perhaps the monthly amount can be lowered. Those who want to live better (or in more expensive locations) would still have to hold jobs. It does give others who cannot or do not want to work the opportunity to move to cost effective locations (where housing and utilities are cheap).

[Shivetya]

Sell it to the left as assistance programs, sell it to the right as a tax overhaul, (fair tax/flat etc).

You could cover both sides by consolidating aid programs into one basic income payment and bundling with tax reform where all tax paid is via a consumption tax. So borrow the fair tax idea of a prebate, where the government automatically deposits a set amount weekly/monthly into your account.

The worrisome parts here are is that far too many people are willing to live at near poverty levels as long as the feel comfortable and the effort to exist there requires little on their part. We could end up legislating an entire segment to permanent poverty, paid enough to keep them from rising against those who have all the money