All: don't miss that there are multiple pages of comments in this thread. That's what the "More" link at the bottom of the page points to. Or click these:
I like the simple argument made here about UBI enabling efficient consumption.
I worry about three things with UBI though and they're more social than economic.
1. Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't. The former will be absolutely at the mercy of the latter. We can see this a little bit with the coronavirus relief packages.
2. Predators - individuals and companies will find a way to take your UBI check from you as fast as possible. We can see this in housing where some governments give poor people vouchers for rent. Those vouchers are targeted by slumlords who find a way to give you as little as possible for them. There will be rampant scams and bad behavior in areas where the UBI makes up a larger portion of total income.
3. Charity - let's say we actually give every person enough money for food, housing, and utilities. Some people will mess up. They could spend it all on an addiction or just make a bad investment. Even with UBI they could still end up hungry or homeless. Will we help them? Or will we say "you had your UBI, the rest is on you". This changes the morals of how we treat people in the worst times.
I wish all of the above wasn't true. But I just don't think America can handle UBI and I'm not sure how that's going to change.
There are a lot of people here dissenting on the idea of UBI on the premise that they find meaning in work, and to take the incentive to work away will lead others (themselves included) not to have meaning in life.
I’ve taken a year off of work to start a business that failed and spent the past few months hanging out with my kids. At first, my stress levels were high because daycares were shut down and I was panicking about my business. When I accepted the fate of my business, I chilled out and just hung out with my kids. These past few months were amazing. I loathe finding a new job now. Instead, I’ve built a mechanical keyboard, explored streaming, learned how to cook, read useless books, and learned how to be present.
I see the choice of UBI as: “do I toil away for the wealthy class? Or do I took away for myself?” No way will I toil for someone else if I had a choice.
Why give free money to everyone? Clearly a rich person doesn’t need a monthly check from government...
Milton Friedman long ago proposed a negative income tax to replace means-tested welfare programs. Essentially, people below a certain income threshold would receive money which scales to a maximum the closer their income approaches zero.
I do think people radically underestimate the unforeseen consequences of a free guaranteed income, even if it was low. I’d be willing to live as a poor person if that meant not having to work. Actually, where I live now I live comfortably on $1200 a month. I definitely would choose not to work or work less if that money came free from government. If I got free money I wouldn’t increase spending, I would reduce work.
I know these are anecdotes but I already heard several cases from my circle of friends and families where they just chose not to work because of unemployment checks. Instead of practicing music or learning programming or doing something productive during their period of unemployment, they decided to watch Netflix and play games all day.
Creating is hard work, studying is hard work. Just like having information and online videos/articles/courses at their fingertips do not make people more educated but instead chose to believe what they believe. Having money and time alone do not motivate people to study or create.
UBI will probably benefit most to those who already have inner desire to succeed. But for majority of people, I have my doubts.
I like how the article pointed out the biggest economic problem I see in post-industrial society - instead of almost everyone being a small business owner, we have huge corporations reaping massive profits, and poor replaceable corporate drones barely making ends meet.
That said, I completely disagree with the proposed solution of UBI and here's why. We humans have a rather nasty bug in our firmware: when we do not have to work, we turn tribal. We form cliques and our meaning of life becomes to bite, or at least to bark at the clique on the other side of the fence.
If you want some evidence, look at the correlation between cold climate (forcing people to do serious agriculture) and economic development in many countries. I also suspect that the recent spike of divisiveness and outrage in our society has something to do with people having more free time from lost jobs, and not desperately trying to learn a new marketable skill, because of the COVID-19 support.
Mind you, I'm not saying that COVID relief is bad, but I seriously suspect that the recent unrest is a preview of what the society would turn into if we eliminated the need for people to work.
I wish we could instead figure out a system for taxing scale or subordination levels. So that having a couple of owner-operated grocery stores in every neighborhood would become a viable alternative to centrally managed Walmart with armies of corporate zombies miserable at their jobs. Of course, it would reduce the overall efficiency, but I would happily pay an extra dollar to live in a society where people are putting their energy into producing objects of value and making others happy, than see endless infighting about who deserves that extra chunk off someone else's table more.
I really don't think enough thought goes into the affordability of a UBI when it comes up in discussions.
Just a quick estimate, assuming that we're talking about the UK here
The UBI pays out to 53,000,000 people (very roughly the number of people 18 and over).
The amount the UBI pays out is £1,000 a month (whether you could really live on this is debateable, but it's certainly not possible in most of London for example).
So a UBI would cost pretty much as much as the entire UK national budget (healthcare, education, defence, infrastructure, welfare etc.)
I'm all for increasing taxes, but assuming that you replaced welfare with a UBI, you'd still have a (roughly) £400 billion shortfall - just where does that money come from?
It's affordable at a lesser amount, sure, but at that sort of level, what's the point?
This is before even getting to other arguements (if you want to use it to replace a welfare system, then in my opinion, it's essentially a regressive scheme, because everyone is getting the same payout, regardless of need).
A UBI paid for with a carbon tax would both save us from the worst consequences of global warming and stimulate the economy. It's hard to find a rational excuse for not doing it.
Planet Money did a great episode on this idea over 7 years ago:
One of my best friends is an academic economist working in this space, so while I won’t pretend to be an expert, I have spent a goodly amount of time discussing this with one.
With no disrespect intended to you personally, this policy you propose makes no sense. Without putting words in your mouth, it looks to me like “two things I as a progressive like the idea of”, rather than a coherent economic policy.
Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.
With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is orders of magnitude more than a carbon tax could ever hope to raise. It’s orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point.
It’s fine to like UBI and it’s fine to like carbon taxes, but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence, and there’s certainly no reason to link them as part of a single policy.
I don't see how this would really work. A carbon tax in an ideal situation is just a consumption tax. This means that it's the consumer that pays it. Rich people don't eat more food nor do they drive dozens of cars at once. If we want this carbon tax to offset our greenhouse emissions then that means it will necessarily disproportionately impact poor people.
And then you want to turn around and pay that money back to people as UBI? It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI.
In an unideal world it will just be gamed to all hell instead. Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.
Henry George had it right: Use land value tax to fund UBI. Abracadabra, all the birds get killed with one stone: Real estate prices calm down, income inequality calms down, environmental costs are valued into use, and poverty is eliminated.
The basic problem with funding a universal income with a carbon tax is that the graphs are pointing in the opposite directions.
Population is going up, and inflation is carefully managed to be persistently slightly positive, so you'll need to grow the nominal size of the UBI fund every year. But taxing carbon emissions will result in decreasing carbon emissions; in fact, this is the entire purpose of taxing it! So your revenue from taxes will go down as your outlays go up.
Philosophically, a universal basic income is intended to be a "forever" government program, like Social Security or Medicare. In contrast, we hope to bring our carbon emissions down dramatically and keep them down. Funding a forever program with a revenue source we hope goes away does not seem like good long-term planning to me.
Disagree strongly that you should combine UBI and carbon tax to same policy framework.
Carbon tax needs to function globally. An UBI scheme will be - for the foreseeable future - a local policy enacted within the borders of a sovereign political entity.
The economic actions of every human being must somehow be encompassed in the carbon tax scheme.
UBI on the other hand, is about how local governments wish to split and spread the dole.
Were you to combine these two into one, it would mean massive capital flows from the rich countries to the poor. It did not work well in the scope of development aid. You could say development aid has only made third world poorer.
If you could give this "global UBI" to people personally it might work better - stimulating local markets and entrepreneurs. Because everybody likes to get rich, and once you have UBI-loaded consumers everywhere, suddenly it makes more sense to offer services and products that were economically untenable before.
So if you could in some non-dystopian scifi future give direct UBI payments to people personally, then maybe this would make sense. But while we are seemingly moving towards a world with unconstrained financial services for everyone, we are not there yet! And we need carbon tax yesterday!
How are we not there yet? Well, according to the Economist, for example only half of the people in Latin America have a bank account. We can imagine that we can leapfrog to a future where everyone has a bank account through mobile banking services, but - not there yet!
Carbon taxes tend to be regressive. Using a regressive tax to fund "ubi" sounds cunningly evil. Are you familiar with the yellow jacket protests in France?
I don't see how a carbon tax on its own solves any environmental issue. By itself it just means it costs more to buy things without changing how they are actually produced & that production's environmental impact. A carbon tax might be used for remediation after the fact, which isn't as effective, but such remediation funding would leave little room to fund UBI.
If you want the costs of products to "bake in" environmental costs, it needs to be done at the production stage. Producers need to either spend more money on reducing emissions or more money on remediating their environmental impact, or both, which raises product prices instead of very indirect tax. Trying to do it as a carbon tax doesn't offer producers any reason to change.
The Planet Money episode is about a revenue neutral carbon tax. UBI funded carbon tax doesn't make any sense to tie those 2 things together. Carbon emissions would decrease with a carbon tax, but the amount of revenue needed for UBI would stay roughly the same. This means we would need to tax carbon even more. This would create a feedback loop where energy is prices explode uncontrollably. Basically, if you live in Alaska and need to heat your house and drive a truck, you're basically screwed.
> It's hard to find a rational excuse for not doing it.
Well the numbers being off by an order of magnitude is a good reason. The US tax revenue would have to double just to pay for anything that resembles UBI.
The carbon tax would have to be obscene to gather that amount of money (another $25k in taxes on a middle class US family). Even if people survive the initial shock, the rapid drop in demand for anything with a carbon tax now means that UBI has a budget shortfall and has to be cut.
It’s horrendously stupid to tie something we want to be dependable (UBI) to revenue from taxation on things we want to stop.
Most estimates on a carbon tax raise at best $200B a year in the US. For the ~150M adults, that would be a UBI of about $100 a month. Not much of a UBI. It’s also paid by the same people as explained elsewhere in this thread.
The only way a UBI makes sense in terms of increasing equity in society is either a) printing the money to intentionally induce inflation, which american economic common sense seems allergic to, or b) reclaiming the wealth from the wealthy directly, which seems unlikely to be effective in the near future.
I certainly don’t want to put the idea of carbon neutrality and solving wealth inequality at odds, that doesn’t make any sense.
I am not a fan of using a Tax of something bad to fund something we want to have. The Tax should be directly related to cleanup efforts of the Bad thing™, otherwise you get a dependency where the Bad Thing™ is required to keep up funding.
You tax something you want to reduce. Since carbon emissions are associated with most travel and great-tasting food, it sounds like paying people to sit at home, watch TV and drink themselves into depression.
It's hard to find a rational excuse for not doing it.
Aside from we haven't figured out how to actually pass a carbon tax despite, what, twenty years of trying. I used to be enamoured with the idea, but now I'm growing to believe it's a distraction and a waste of time & effort that just isn't going to happen in any meaningful timeframe.
There are other ways to skin this cat, and the ones we stand a prayer of implementing are the ones we need to focus on.
"It's hard to find a rational excuse for not doing it."
Just the opposite, it's hard to find any rationality for doing it at all.
If a 'carbon tax' is really just going towards reducing carbon, but not going into R&D for carbon reducing technologies, then it's probably just as efficient to simply limit carbon use in a variety of areas. Taking vast amounts of money from businesses is an indirect way to stimulate R&D on such things.
The simultaneous effect of severely limiting productivity, with a gigantic wealth transfer to those at the lower end of the economic spectrum, would be a 'double inflation whammy'.
A more extreme version would be: "No more cars or busses, and by the way, we're now going to grab your wealth and transfer it over to those people over there"
It's best to consider them as separate activities.
Solve the climate problem with effective technology and regulation, solve inequality by getting people into the workplace and by helping to more evenly distribute surpluses.
In particular, low interest rates are causing massive inequality in wealth due to home appreciation, which is absurd.
I feel like this conflates two issues, and politics should be conducted in all the clarity it can get. Also a carbon tax should probably be used to support the planet, e.g. sustainability projects.
The basic problem is that efficient producer types make terrible consumers. From my industrious friends to Warren Buffet, they don't care to spend the wealth they accumulate. The dollars move more slowly, often to the hands of rent-seeking institutions. When they do consume on a large scale, it funds innovative of extravagance. Its fundamentally ineffective and inefficient relative to other models.
Given resources, consumers are remarkably efficient at consuming. My neighborhood is alive with home improvement projects, enabled by direct cash payments. The money isn't going idle. These dollars are flowing throughout communities into places that large money cannot reach. The velocity of these dollars is at least an order of degrees faster than sitting in an individual's offshore account. This invigorates production, adaptation, and research in ways a grant or tax discount cannot.
I often hear we live in a consumer-driven economy. If that is the case, its only prudent to empower consumption across the broadest possible base to grow the economy. The more I think about it, the more it seems like excluding people from being able to earn and spend money is actually sacrificing macroeconomic growth in exchange for social control.
The elephants in the room are the extremely cheap labor that already undermines the legit goods and services:
- extremely cheap prison labor
- undocumented laborers who have (almost) no legal rights and who take difficult jobs
- ex-cons who have to pay a portion of their wages to employers who are willing to hire them
- jobs where wages must be subsidized by government programs (eg. WalMart encourages their lowest paid workers to sign up for SNAP)
UBI is nice, but the markets are already distorted and without addressing these issues, UBI just distorts the markets more.
That said, even if we can't address these issues, I'm happy to support modernizing the American (federal, state, and county) welfare programs -- including giving recipients the option of taking the cash value.
I understand and agree with how a UBI will benefit those that are currently falling between the cracks and not receiving any assistance. I can also see the benefits of greatly simplifying the social security system. (If it was implemented in a way that was actually simple. i.e. no distinction between sick, unemployed, old, lazy)
But I don't understand why people don't believe the UBI will just become the new definition of poverty. People will still be miserable and feel like they have nothing when comparing themselves to those who get UBI and have a job.
I can’t help but think that UBI would distort job markets. Let’s pick an example of a “sucky job” (and I say this as just an example, I realize these guys work hard and are vital). A garbage man. He get’s paid $42k a year because they have to find people who would be willing to do this sucky job and need to pay higher than minimum wage to do so. At some point of income, people would be willing to accept the suckiness.
Now let’s throw UBI into the world. Everyone is getting $2k a month. Now a garbage man says “I’m not gonna be a garbage man anymore, I can do something I love now, like a music teacher that pays $30k”. Now we have no garbage man and the wage would need to increase to find new people. To cover that, taxes go up. Higher taxes are a regressive solution to giving people more money.
The US population has 199M adults[1]. Let's say a decent basic income is $40k. That's 8 Trillion that the government has to find every year.
The US federal tax revenue was of 3.86 Trillion last year[2]. Half of which comes from individual income, and another third from payroll taxes. This is before the effects that UBI will have on the economy.
Maybe my 10 minute research is wrong? It seems like a quite central piece to address in an article promoting UBI.
I support the idea of UBI in principle, but I think it needs to be combined with a land value tax in order to work as intended. Rents are charged at the highest the market will bear, so the UBI could just flow into the hands of landlords, and the people who it is supposed to help being no better off.
I haven't seen this discussed as much, but I am worried about population rises along with a UBI.
Especially amongst poorer communities where extra children are viewed as financial stability. Already with free schooling and meals, there is a mindset that you can raise kids and let the state take care of them to some degree.
But I guess UBI is far more likely to be implemented in places which don't have population problems to begin with.
Comparing UBI to the welfare system, UBI's upsides:
U1. Simple to administer
U2. Efficient spending since the UBI beneficiary has the most information about what he/she needs
But downsides:
D1. Will inflate cost of everything, including cost of housing and healthcare
D2. Some fraction of beneficiaries will spend it poorly, meaning we might still need a welfare safety net for them (which itself might incentivize spending UBI poorly)
The alternative is an even bigger welfare system, let's call it Universal Basic Needs. That should include Universal Basic Healthcare, Universal Basic Public Housing, Universal Basic Food (aka food stamps aka rations), etc. It's diametrically opposite to UBI, and the upsides of one are the downsides of the other.
With UBN, there's no need for unemployment insurance, which is a problematic part of the current welfare system because it incentivizes not being employed. Defining the 'basic' level isn't easy, but it should be good enough that each member of congress or parliament wouldn't mind living at that level for a day per year.
I find either of these opposite options better for the future of society than some middle ground of welfare benefits.
Honest question - how does one prevent inflation with UBI?
If the market price of an apartment is $500, and suddenly everyone gets UBI, the landlord would raise the price as much as he can, say $1000.
People on UBI are in the same relative position as before. They still can’t get the apartment because there’s enough people who have the UBI plus something else and can pay $1000.
I feel like this is the perfect example why everyone should at some point be required to start a business. Because some of these ideas stem from to many people not understand the economy in a real sense because they are always workers and see the world through that lens.
Why would the rest of the world finance us (the citizens of the United States) to sit around and watch Netflix all day? Put another way, someone has to buy the debt we are issuing. Today our debt is sold to savers in China, and to other hard working individuals across the world. We have no means of paying back the debt we are issuing, so we are monetizing the debt through a mechanism known as QE, otherwise known as a printing press.
If we are debasing the savings of hard working people, why would they want to continue to lend to us? We could raise interest rates, but with the levels of our national debt, servicing the debt would become impossible. So that isn't an option. If trust is lost in the dollar as a reserve currency, we will become very poor very very fast.
It won't matter if we print more money, or if UBI is 1,000 or 1,000,000 per month. The dollar will have less value.
It's better to focus on improving productivity and making stuff. There can't be consumption without production.
People don’t need money. People need basics like housing, food, and medical care. No UBI scheme is going to work in an economic system like the one in the U.S. that isn’t capable of providing those things. It’s not like there’s a shortage of food or shelter now and yet we still have homeless people while homes sit empty. We still have hungry people while farmers are destroying their crops.
I bet everyone reading this has at one time or another met someone who is completely incapable of managing money at even simple levels. Or thinking ahead even. Not everyone can wisely use XX a month. Or even eat with it. Then what?
The fixation on money is a little nearsighted imo. It didn't always exist. It's just a tool for determining access to good and services. What if everyone could get a healthy meal and a clean safe place to sleep at any time and a shower and some net access or whatever is deemed necessary. Would that cost less or more then UBI?
(I still think some form of UBI might be a good idea for the present, just, we should think bigger and outside of the current economic stack for the long term.)
A lot of states do. Maryland and California have housing and food programs for the poor (google "Maryland HOC"). Yet it doesn't seem to help much in terms of breaking out of inter-generational poverty - you just have poor people living in middle class houses trashing up the neighborhood and devaluing all the properties around them.
But in society as it exists today, money is essentially equivalent to all of those things. UBI can ameliorate all three of those issues while helping to avoid the issues that crop up when trying to provide those necessities to people directly.
The article attempts to argue for UBI from the stance of being pro-capitalist and working within the existing capitalist framework, and I think the author would answer your criticism with something like "By providing money to people, they can allocate those resources wherever is most efficient for them- to buy the food and housing they need if they need it, or other things if not. The person receiving the money is the one with the most information about where money needs to go in their life."
[+] [-] dang|5 years ago|reply
https://news.ycombinator.com/item?id=23993259&p=2
https://news.ycombinator.com/item?id=23993259&p=3
https://news.ycombinator.com/item?id=23993259&p=4
https://news.ycombinator.com/item?id=23993259&p=5
https://news.ycombinator.com/item?id=23993259&p=6
[+] [-] habosa|5 years ago|reply
I worry about three things with UBI though and they're more social than economic.
1. Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't. The former will be absolutely at the mercy of the latter. We can see this a little bit with the coronavirus relief packages.
2. Predators - individuals and companies will find a way to take your UBI check from you as fast as possible. We can see this in housing where some governments give poor people vouchers for rent. Those vouchers are targeted by slumlords who find a way to give you as little as possible for them. There will be rampant scams and bad behavior in areas where the UBI makes up a larger portion of total income.
3. Charity - let's say we actually give every person enough money for food, housing, and utilities. Some people will mess up. They could spend it all on an addiction or just make a bad investment. Even with UBI they could still end up hungry or homeless. Will we help them? Or will we say "you had your UBI, the rest is on you". This changes the morals of how we treat people in the worst times.
I wish all of the above wasn't true. But I just don't think America can handle UBI and I'm not sure how that's going to change.
[+] [-] treyfitty|5 years ago|reply
I’ve taken a year off of work to start a business that failed and spent the past few months hanging out with my kids. At first, my stress levels were high because daycares were shut down and I was panicking about my business. When I accepted the fate of my business, I chilled out and just hung out with my kids. These past few months were amazing. I loathe finding a new job now. Instead, I’ve built a mechanical keyboard, explored streaming, learned how to cook, read useless books, and learned how to be present.
I see the choice of UBI as: “do I toil away for the wealthy class? Or do I took away for myself?” No way will I toil for someone else if I had a choice.
[+] [-] alexmingoia|5 years ago|reply
Milton Friedman long ago proposed a negative income tax to replace means-tested welfare programs. Essentially, people below a certain income threshold would receive money which scales to a maximum the closer their income approaches zero.
https://en.m.wikipedia.org/wiki/Negative_income_tax
I do think people radically underestimate the unforeseen consequences of a free guaranteed income, even if it was low. I’d be willing to live as a poor person if that meant not having to work. Actually, where I live now I live comfortably on $1200 a month. I definitely would choose not to work or work less if that money came free from government. If I got free money I wouldn’t increase spending, I would reduce work.
[+] [-] christiansakai|5 years ago|reply
Creating is hard work, studying is hard work. Just like having information and online videos/articles/courses at their fingertips do not make people more educated but instead chose to believe what they believe. Having money and time alone do not motivate people to study or create.
UBI will probably benefit most to those who already have inner desire to succeed. But for majority of people, I have my doubts.
[+] [-] john_moscow|5 years ago|reply
That said, I completely disagree with the proposed solution of UBI and here's why. We humans have a rather nasty bug in our firmware: when we do not have to work, we turn tribal. We form cliques and our meaning of life becomes to bite, or at least to bark at the clique on the other side of the fence.
If you want some evidence, look at the correlation between cold climate (forcing people to do serious agriculture) and economic development in many countries. I also suspect that the recent spike of divisiveness and outrage in our society has something to do with people having more free time from lost jobs, and not desperately trying to learn a new marketable skill, because of the COVID-19 support.
Mind you, I'm not saying that COVID relief is bad, but I seriously suspect that the recent unrest is a preview of what the society would turn into if we eliminated the need for people to work.
I wish we could instead figure out a system for taxing scale or subordination levels. So that having a couple of owner-operated grocery stores in every neighborhood would become a viable alternative to centrally managed Walmart with armies of corporate zombies miserable at their jobs. Of course, it would reduce the overall efficiency, but I would happily pay an extra dollar to live in a society where people are putting their energy into producing objects of value and making others happy, than see endless infighting about who deserves that extra chunk off someone else's table more.
[+] [-] sdunwoody|5 years ago|reply
Just a quick estimate, assuming that we're talking about the UK here
The UBI pays out to 53,000,000 people (very roughly the number of people 18 and over).
The amount the UBI pays out is £1,000 a month (whether you could really live on this is debateable, but it's certainly not possible in most of London for example).
53,000,000 * £1000 = £53,000,000,000 (£53 billion) monthly cost
53,000,000,000 * 12 (months) = £636,000,000,000 (£636 billion) yearly cost
Bear in mind the entire UK budget for 2018 was £842 billion:
https://en.wikipedia.org/wiki/2018_United_Kingdom_budget
Infact, if you break this down to local/national spending, the national government budget for 2018 was £652 billion:
https://www.ukpublicspending.co.uk/year_spending_2018UKbt_17...
So a UBI would cost pretty much as much as the entire UK national budget (healthcare, education, defence, infrastructure, welfare etc.)
I'm all for increasing taxes, but assuming that you replaced welfare with a UBI, you'd still have a (roughly) £400 billion shortfall - just where does that money come from?
It's affordable at a lesser amount, sure, but at that sort of level, what's the point?
This is before even getting to other arguements (if you want to use it to replace a welfare system, then in my opinion, it's essentially a regressive scheme, because everyone is getting the same payout, regardless of need).
[+] [-] alex_young|5 years ago|reply
Planet Money did a great episode on this idea over 7 years ago:
https://www.npr.org/sections/money/2013/07/12/201502003/epis...
They did a followup 5 years later:
https://www.npr.org/sections/money/2018/07/18/630267782/epis...
It seems like there are too many entrenched players to make this a reality unfortunately.
[+] [-] laingc|5 years ago|reply
With no disrespect intended to you personally, this policy you propose makes no sense. Without putting words in your mouth, it looks to me like “two things I as a progressive like the idea of”, rather than a coherent economic policy.
Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.
With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is orders of magnitude more than a carbon tax could ever hope to raise. It’s orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point.
It’s fine to like UBI and it’s fine to like carbon taxes, but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence, and there’s certainly no reason to link them as part of a single policy.
[+] [-] Aerroon|5 years ago|reply
And then you want to turn around and pay that money back to people as UBI? It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI.
In an unideal world it will just be gamed to all hell instead. Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.
[+] [-] megameter|5 years ago|reply
[+] [-] snowwrestler|5 years ago|reply
Population is going up, and inflation is carefully managed to be persistently slightly positive, so you'll need to grow the nominal size of the UBI fund every year. But taxing carbon emissions will result in decreasing carbon emissions; in fact, this is the entire purpose of taxing it! So your revenue from taxes will go down as your outlays go up.
Philosophically, a universal basic income is intended to be a "forever" government program, like Social Security or Medicare. In contrast, we hope to bring our carbon emissions down dramatically and keep them down. Funding a forever program with a revenue source we hope goes away does not seem like good long-term planning to me.
[+] [-] fsloth|5 years ago|reply
Carbon tax needs to function globally. An UBI scheme will be - for the foreseeable future - a local policy enacted within the borders of a sovereign political entity.
The economic actions of every human being must somehow be encompassed in the carbon tax scheme.
UBI on the other hand, is about how local governments wish to split and spread the dole.
Were you to combine these two into one, it would mean massive capital flows from the rich countries to the poor. It did not work well in the scope of development aid. You could say development aid has only made third world poorer.
If you could give this "global UBI" to people personally it might work better - stimulating local markets and entrepreneurs. Because everybody likes to get rich, and once you have UBI-loaded consumers everywhere, suddenly it makes more sense to offer services and products that were economically untenable before.
So if you could in some non-dystopian scifi future give direct UBI payments to people personally, then maybe this would make sense. But while we are seemingly moving towards a world with unconstrained financial services for everyone, we are not there yet! And we need carbon tax yesterday!
How are we not there yet? Well, according to the Economist, for example only half of the people in Latin America have a bank account. We can imagine that we can leapfrog to a future where everyone has a bank account through mobile banking services, but - not there yet!
[+] [-] petermcneeley|5 years ago|reply
[+] [-] ineedasername|5 years ago|reply
If you want the costs of products to "bake in" environmental costs, it needs to be done at the production stage. Producers need to either spend more money on reducing emissions or more money on remediating their environmental impact, or both, which raises product prices instead of very indirect tax. Trying to do it as a carbon tax doesn't offer producers any reason to change.
[+] [-] Aunche|5 years ago|reply
[+] [-] ardit33|5 years ago|reply
i.e. polluting cars, red meat, airplane travel, etc... etc...
The problem with 'sales tax' is that are regressive. You are essentially taxing the millionaire and the homeless guy with the same rate.
[+] [-] kortilla|5 years ago|reply
Well the numbers being off by an order of magnitude is a good reason. The US tax revenue would have to double just to pay for anything that resembles UBI.
The carbon tax would have to be obscene to gather that amount of money (another $25k in taxes on a middle class US family). Even if people survive the initial shock, the rapid drop in demand for anything with a carbon tax now means that UBI has a budget shortfall and has to be cut.
It’s horrendously stupid to tie something we want to be dependable (UBI) to revenue from taxation on things we want to stop.
[+] [-] ahdeanz|5 years ago|reply
It's interesting to see more and more rigorous analysis of UBI enter the discussion.
[+] [-] ChrisLomont|5 years ago|reply
Tell me again how this works?
[+] [-] mulmen|5 years ago|reply
[+] [-] TheSpiceIsLife|5 years ago|reply
This can’t work for one very obvious reason:
The incentive is supposed to be to reduce carbon emissions, but a UBI funded by carbon emissions has the opposite incentive.
[+] [-] monadic2|5 years ago|reply
I certainly don’t want to put the idea of carbon neutrality and solving wealth inequality at odds, that doesn’t make any sense.
[+] [-] lysium|5 years ago|reply
Sure, some will try to piss less, but I doubt you’d like to swim in it.
For me, that’s the rational excuse to not rely on carbon tax. Instead, make everybody use the toilet.
[+] [-] mgoetzke|5 years ago|reply
[+] [-] john_moscow|5 years ago|reply
[+] [-] ip26|5 years ago|reply
Aside from we haven't figured out how to actually pass a carbon tax despite, what, twenty years of trying. I used to be enamoured with the idea, but now I'm growing to believe it's a distraction and a waste of time & effort that just isn't going to happen in any meaningful timeframe.
There are other ways to skin this cat, and the ones we stand a prayer of implementing are the ones we need to focus on.
[+] [-] TimJRobinson|5 years ago|reply
I also think most environmental problems can be solved with a tax on the product doing the damage, that pays for the cost of undoing the damage.
[+] [-] hcurtiss|5 years ago|reply
[+] [-] kovek|5 years ago|reply
[+] [-] jariel|5 years ago|reply
Just the opposite, it's hard to find any rationality for doing it at all.
If a 'carbon tax' is really just going towards reducing carbon, but not going into R&D for carbon reducing technologies, then it's probably just as efficient to simply limit carbon use in a variety of areas. Taking vast amounts of money from businesses is an indirect way to stimulate R&D on such things.
The simultaneous effect of severely limiting productivity, with a gigantic wealth transfer to those at the lower end of the economic spectrum, would be a 'double inflation whammy'.
A more extreme version would be: "No more cars or busses, and by the way, we're now going to grab your wealth and transfer it over to those people over there"
It's best to consider them as separate activities.
Solve the climate problem with effective technology and regulation, solve inequality by getting people into the workplace and by helping to more evenly distribute surpluses.
In particular, low interest rates are causing massive inequality in wealth due to home appreciation, which is absurd.
[+] [-] amelius|5 years ago|reply
I feel like this conflates two issues, and politics should be conducted in all the clarity it can get. Also a carbon tax should probably be used to support the planet, e.g. sustainability projects.
[+] [-] EGreg|5 years ago|reply
https://en.m.wikipedia.org/wiki/Carbon_fee_and_dividend
[+] [-] reilly3000|5 years ago|reply
Given resources, consumers are remarkably efficient at consuming. My neighborhood is alive with home improvement projects, enabled by direct cash payments. The money isn't going idle. These dollars are flowing throughout communities into places that large money cannot reach. The velocity of these dollars is at least an order of degrees faster than sitting in an individual's offshore account. This invigorates production, adaptation, and research in ways a grant or tax discount cannot.
I often hear we live in a consumer-driven economy. If that is the case, its only prudent to empower consumption across the broadest possible base to grow the economy. The more I think about it, the more it seems like excluding people from being able to earn and spend money is actually sacrificing macroeconomic growth in exchange for social control.
[+] [-] thephyber|5 years ago|reply
That said, even if we can't address these issues, I'm happy to support modernizing the American (federal, state, and county) welfare programs -- including giving recipients the option of taking the cash value.
[+] [-] jay_kyburz|5 years ago|reply
But I don't understand why people don't believe the UBI will just become the new definition of poverty. People will still be miserable and feel like they have nothing when comparing themselves to those who get UBI and have a job.
[+] [-] bluedevil2k|5 years ago|reply
[+] [-] zimbatm|5 years ago|reply
The US population has 199M adults[1]. Let's say a decent basic income is $40k. That's 8 Trillion that the government has to find every year.
The US federal tax revenue was of 3.86 Trillion last year[2]. Half of which comes from individual income, and another third from payroll taxes. This is before the effects that UBI will have on the economy.
Maybe my 10 minute research is wrong? It seems like a quite central piece to address in an article promoting UBI.
[1]: https://www.wolframalpha.com/input/?i=number+of+adults+in+th... [2]: https://www.whitehouse.gov/wp-content/uploads/2020/02/budget...
[+] [-] pgreenwood|5 years ago|reply
[+] [-] maurys|5 years ago|reply
Especially amongst poorer communities where extra children are viewed as financial stability. Already with free schooling and meals, there is a mindset that you can raise kids and let the state take care of them to some degree.
But I guess UBI is far more likely to be implemented in places which don't have population problems to begin with.
[+] [-] zhyder|5 years ago|reply
With UBN, there's no need for unemployment insurance, which is a problematic part of the current welfare system because it incentivizes not being employed. Defining the 'basic' level isn't easy, but it should be good enough that each member of congress or parliament wouldn't mind living at that level for a day per year.
I find either of these opposite options better for the future of society than some middle ground of welfare benefits.
[+] [-] xivzgrev|5 years ago|reply
If the market price of an apartment is $500, and suddenly everyone gets UBI, the landlord would raise the price as much as he can, say $1000.
People on UBI are in the same relative position as before. They still can’t get the apartment because there’s enough people who have the UBI plus something else and can pay $1000.
[+] [-] DeonPenny|5 years ago|reply
[+] [-] justinzollars|5 years ago|reply
Why would the rest of the world finance us (the citizens of the United States) to sit around and watch Netflix all day? Put another way, someone has to buy the debt we are issuing. Today our debt is sold to savers in China, and to other hard working individuals across the world. We have no means of paying back the debt we are issuing, so we are monetizing the debt through a mechanism known as QE, otherwise known as a printing press.
If we are debasing the savings of hard working people, why would they want to continue to lend to us? We could raise interest rates, but with the levels of our national debt, servicing the debt would become impossible. So that isn't an option. If trust is lost in the dollar as a reserve currency, we will become very poor very very fast.
It won't matter if we print more money, or if UBI is 1,000 or 1,000,000 per month. The dollar will have less value.
It's better to focus on improving productivity and making stuff. There can't be consumption without production.
There is no free lunch.
[+] [-] dopylitty|5 years ago|reply
The economic system is the problem.
[+] [-] tomrod|5 years ago|reply
One common refrain I've heard is that the US already has a UBI, but it is $0.
[+] [-] mythrwy|5 years ago|reply
I bet everyone reading this has at one time or another met someone who is completely incapable of managing money at even simple levels. Or thinking ahead even. Not everyone can wisely use XX a month. Or even eat with it. Then what?
The fixation on money is a little nearsighted imo. It didn't always exist. It's just a tool for determining access to good and services. What if everyone could get a healthy meal and a clean safe place to sleep at any time and a shower and some net access or whatever is deemed necessary. Would that cost less or more then UBI?
(I still think some form of UBI might be a good idea for the present, just, we should think bigger and outside of the current economic stack for the long term.)
[+] [-] umvi|5 years ago|reply
[+] [-] a_c_s|5 years ago|reply
[+] [-] margalabargala|5 years ago|reply
The article attempts to argue for UBI from the stance of being pro-capitalist and working within the existing capitalist framework, and I think the author would answer your criticism with something like "By providing money to people, they can allocate those resources wherever is most efficient for them- to buy the food and housing they need if they need it, or other things if not. The person receiving the money is the one with the most information about where money needs to go in their life."