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  #201  
Old 03-03-2019, 09:12 AM
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...
It would be illogical for anyone to willingly choose to become a part of that highly stigmatized group of people if there was another better alternative. UBI is that better alternative....

<snip>

... Not sure what the rest means. Yes, if the VAT is increased to redistribute the income, it will be increased....
You perceive getting a tax credit to be stigmatizing and feel that those who get tax credits are stigmatized? Okay. Your milage varies but I think few drive a similar car.

Not sure what about the rest confuses you.

Cost of product + additional cost of product due to VAT >> cost of product without VAT. This is true even if cost of product after extensive automation occurs < cost of product before automation. Moreover that total additional cost of product is as big as the UBI if not greater.

VAT is not an income or wealth tax to the very top earners of technology companies; it functions more like a sales tax, getting passed on as increased costs of products (and services) Paradoxically it is possible that it might even function as a regressive taxation, at least the robotrucking one: shipping costs are a pretty fixed amount bases on size and weight whether the item is cheap or expensive, consequently the the VAT adds a smaller percent to the cost of an expensive item than to an cheap one.
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Old 03-03-2019, 02:27 PM
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UBI does not address wealth/power inequality at all. It does not give those who have or are soon to drop out of or who have never been in the middle the means to climb up into it and it simultaneously gives the very wealthiest even more wealth while it giving them just enough to barely live off of.

FWIW a graduated UBI is functionally an expanded income tax credit.
I don’t think UBI per Yang is intended to fix the income inequality gap so much as it is to provide a safety net and more options for a lot of people who are currently without either. The price of covering them is to extend coverage to all, even those who need it least. His ideas about human-centered capitalism and changing the metrics for success go more towards the inequality issue.

You may be right that UBI functions as a tax credit, but given the choice between the following campaign promises: “Here’s a tax credit of X dollars per Y income capped at Z amount per year!” and “Here’s $1,000 cash per month for life!” one is definitely catchier than the other.
  #203  
Old 03-03-2019, 03:00 PM
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You may be right that UBI functions as a tax credit, but given the choice between the following campaign promises: “Here’s a tax credit of X dollars per Y income capped at Z amount per year!” and “Here’s $1,000 cash per month for life!” one is definitely catchier than the other.
If you have no income, do you still get a tax credit? Because otherwise, I don't see how UBI is the same as a tax credit.
  #204  
Old 03-03-2019, 03:34 PM
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If you have no income, do you still get a tax credit? Because otherwise, I don't see how UBI is the same as a tax credit.
I had the same question. Perhaps for those without income instead of a tax credit they receive negative income tax? Maybe DSeid will clarify what he meant. But I think this all speaks to why Yang is calling for UBI and $1K cash in hand per month vs. some kind of tax incentive; in politics simplicity speaks louder than complexity.
  #205  
Old 03-03-2019, 04:02 PM
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In my mind, one of the interesting parts of UBI is how it aids labour mobility, in that you can quit your job and look for a new one or start your own business. Also, how it might affect people looking for a first job or planning retirement. Once you have means testing and only give it to people who have a job, it has long ceased to be UBI.

Last edited by CarnalK; 03-03-2019 at 04:06 PM.
  #206  
Old 03-03-2019, 05:35 PM
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In my mind, one of the interesting parts of UBI is how it aids labour mobility, in that you can quit your job and look for a new one or start your own business. Also, how it might affect people looking for a first job or planning retirement. Once you have means testing and only give it to people who have a job, it has long ceased to be UBI.
And one potential outcome of labor mobility is increased movement from the coasts back to the heartland. $1,000 per month will go a lot further in Bloomington than in Boston. It’s not hard to imagine a pair of parents with an extra $24K per year opting out of the big city life to raise their kids in the country air.
  #207  
Old 03-03-2019, 06:30 PM
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I had the same question. Perhaps for those without income instead of a tax credit they receive negative income tax? Maybe DSeid will clarify what he meant. But I think this all speaks to why Yang is calling for UBI and $1K cash in hand per month vs. some kind of tax incentive; in politics simplicity speaks louder than complexity.
Yang's plan as expressed does not eliminate current safety nets, which covers many of those with no income. He does not advocate this replacing those programs. A negative income tax (the Milton Friedman approach) that replaces safety nets this is not.

Neither an expanded EITC or Yang's UBI is actually universal. In that way they are the same. Adding graduated levels and phase outs to UBI as well makes it pretty much exactly the same. Note Rubio's EITC proposal when he was running included both expanding it and making it a monthly payment, so an EITC plan could be monthly as well.
  #208  
Old 03-03-2019, 06:41 PM
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How is Yang's proposal not universal?
  #209  
Old 03-03-2019, 07:07 PM
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From his website:
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Who would get UBI in Andrew Yang’s plan?

Every U.S. citizen over the age of 18 would receive $1,000 a month, regardless of income or employment status, free and clear. No jumping through hoops. Yes, this means you and everyone you know would receive a check for $1,000 a month every month starting in January 2021.
  #210  
Old 03-03-2019, 08:24 PM
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It's a very clever sales pitch, appealing to a coalition of people from all over the current political spectrum. In terms of its challenge to the status-quo, it's even more radical than what Sanders and Trump were offering last time out, but without the historical left/right baggage that each of them carry, making it seem less threatening to those of a moderate disposition.

In electoral terms, it's quite possible someone could make a push for the big chair with a pitch like this in the future. But, if it has any effect in this cycle, it's much more likely just to harm the Democratic nominee by making them seem more establishment and less inspiring.

In policy terms, taxing tech where it makes humans redundant is a nice idea. Supernormal profits are made therein, and it's entirely reasonable for the state to skim some off to pay for the socio-economic consequences. At this point in time, though, UBI would be a terrible idea. It's far too radical a change, psychologically. I can imagine a future society where people could accept a UBI as part of the social contract and submit to control of its level by technocrats tasked with minimising poverty and other negative outcomes. But right now it could only be implemented in a clientist fashion: literally, but legally, bribing the electorate to vote for you. That does not end well.
  #211  
Old 03-03-2019, 08:28 PM
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Originally Posted by CarnalK View Post
From his website:
Mind you I didn't listen to Yang's nearly 2 hour Rogan interview but I have read that he there stated:
Quote:
individuals already receiving roughly $1,000 per month in government benefits would not be entitled to any more money. An individual getting $700 in benefits would get $300, and one receiving no benefits at all would receive the full $1,000.
On his website he apparently does state otherwise, that there would be an option: "Current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash" Unemployment benefits are often about $450/wkk ... at least while someone qualifies I'd doubt they'd jump at the UBI option.

Meanwhile I found something interesting to this discussion, a Treasury Issue Brief: The Distribution and Evolution of the Social Safety Net and Social Insurance Benefits: 1990 to 2014. I'd call your attention to figure 1 on page 6, which shows "that the bottom decile received the largest average total benefit (an average of approximately $14,180) from the social safety net and social insurance programs, as they have since 1990. [/quote] So if his website is to be taken at face value the lowest decile does not get meaningfully more money from UBI (but will have to pay the cost of the VAT buried into the higher than otherwise would be costs of goods and services)

Now reading that literally might not be fair to do. He likely does not include Medicaid as part of his extant government benefits test (although he explicitly includes "food stamps, disability and the like"). But even not counting Medicaid, the fact remains: net from the government the lower deciles won't be seeing much of an increase while they experience the increased costs as much as anyone while the higher deciles in general (smaller fractions get any benefits and the benefits they get when they do are much less) generally in net get close to the full extra $12K that they would not otherwise have. Even exempting Medicaid, the closest to getting the net of the full $12 is the top 10%, very close; the least net benefits go to the lowest 20%. And again, all pay the cost of the VAT by way of higher costs for goods and services.

I guess the plan is it trickles down?

Last edited by DSeid; 03-03-2019 at 08:29 PM.
  #212  
Old 03-03-2019, 10:02 PM
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In my mind, one of the interesting parts of UBI is how it aids labour mobility, in that you can quit your job and look for a new one or start your own business. Also, how it might affect people looking for a first job or planning retirement. Once you have means testing and only give it to people who have a job, it has long ceased to be UBI.
The real value is for people who need it; there's no need for a billionaire or even someone earning six figures having UBI. It should be a graduated UBI, just like taxation. If you dole out "UBI" to everyone equally, you're going to have too much inflation. You'll still have some inflation in giving out extra money, but the effects will be less as we'll be giving out money to those without a lot of spending power so that they'll have more basic spending power. The economic value of UBI is that people who need income will have some, and perhaps some to save and/or to spend on occasional non-essentials. The benefit isn't just for the bottom rungs on the economic ladder, but also for the rest of us who benefit from consumerism in a broader market.
  #213  
Old 03-03-2019, 10:05 PM
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From his website:
This is where I already disagree with Yang - UBI should be primarily for those who would benefit the most from it.

Even if I don't take Yang 100% seriously as a candidate, I appreciate the fact that he is talking about very real issues. Now if he'd only hire Paul Krugman as an economic adviser.
  #214  
Old 03-03-2019, 10:22 PM
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@DSeid: Ok, but that doesn't change the universality of it. Everyone is guaranteed $1000 a month, just not on top of other benefits.

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  #215  
Old 03-03-2019, 10:27 PM
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This is where I already disagree with Yang - UBI should be primarily for those who would benefit the most from it.
Then find a different name for what you want, without that "U" in its acronym.
  #216  
Old 03-03-2019, 10:44 PM
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Then find a different name for what you want, without that "U" in its acronym.
No, it's still universal, as in universally, everyone has a basic minimum income, whether they earn it on their own or not. What you're thinking of is a universal basic dividend; I'm talking about a minimum income that everyone receives, though most of us would receive well beyond that amount.
  #217  
Old 03-03-2019, 11:49 PM
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No, it's still universal, as in universally, everyone has a basic minimum income, whether they earn it on their own or not. What you're thinking of is a universal basic dividend; I'm talking about a minimum income that everyone receives, though most of us would receive well beyond that amount.
Nope, I'm sorry, UBI has been taken. Make up a name for whatever you're thinking of.*
Quote:
A Basic Income, also called Universal Basic Income (UBI), Citizen's Income (CI), Citizen's Basic Income (CBI) (in the United Kingdom), Basic Income Guarantee (BIG) (in the United States and Canada), or Universal Demogrant, is a periodic cash payment delivered to all on an individual basis, without means test or work requirement.
https://en.m.wikipedia.org/wiki/Basic_income

*Guaranteed Basic Income maybe?

Last edited by CarnalK; 03-03-2019 at 11:53 PM.
  #218  
Old 03-04-2019, 03:13 AM
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Mind you I didn't listen to Yang's nearly 2 hour Rogan interview but I have read that he there stated:
On his website he apparently does state otherwise, that there would be an option: "Current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash" Unemployment benefits are often about $450/wkk ... at least while someone qualifies I'd doubt they'd jump at the UBI option.

Meanwhile I found something interesting to this discussion, a Treasury Issue Brief: The Distribution and Evolution of the Social Safety Net and Social Insurance Benefits: 1990 to 2014. I'd call your attention to figure 1 on page 6, which shows "that the bottom decile received the largest average total benefit (an average of approximately $14,180) from the social safety net and social insurance programs, as they have since 1990.
So if his website is to be taken at face value the lowest decile does not get meaningfully more money from UBI (but will have to pay the cost of the VAT buried into the higher than otherwise would be costs of goods and services)

Now reading that literally might not be fair to do. He likely does not include Medicaid as part of his extant government benefits test (although he explicitly includes "food stamps, disability and the like"). But even not counting Medicaid, the fact remains: net from the government the lower deciles won't be seeing much of an increase while they experience the increased costs as much as anyone while the higher deciles in general (smaller fractions get any benefits and the benefits they get when they do are much less) generally in net get close to the full extra $12K that they would not otherwise have. Even exempting Medicaid, the closest to getting the net of the full $12 is the top 10%, very close; the least net benefits go to the lowest 20%. And again, all pay the cost of the VAT by way of higher costs for goods and services.

I guess the plan is it trickles down?[/QUOTE]


The Treasury brief is interesting but it’s worth noting it provides data on a per household basis, while Yang's UBI goes to all citizens 18 and over so it’s not an ideal comparison. Aid programs are also rigid and bureaucratic, which is an added cost that can be eliminated by direct distribution of cash. That said, I don’t think this is Yang's attempt to level the playing field and pull people out of poverty overnight. What UBI would do is preserve the aid received by those who already get it and provide the safety net for that next level up - the huge percentage of Americans who don’t get aid but can’t come up with $400 for an emergency expense. We’ve normalised living paycheck to paycheck. It’s not normal. Those people would be the main beneficiaries. Free up a few tens of millions of people currently languishing in dead-end jobs from worrying about their basic survival and watch their creative and entrepreneurial energy transform the economy.
  #219  
Old 03-04-2019, 03:50 AM
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The real value is for people who need it; there's no need for a billionaire or even someone earning six figures having UBI. It should be a graduated UBI, just like taxation. If you dole out "UBI" to everyone equally, you're going to have too much inflation. You'll still have some inflation in giving out extra money, but the effects will be less as we'll be giving out money to those without a lot of spending power so that they'll have more basic spending power. The economic value of UBI is that people who need income will have some, and perhaps some to save and/or to spend on occasional non-essentials. The benefit isn't just for the bottom rungs on the economic ladder, but also for the rest of us who benefit from consumerism in a broader market.
Yang has a lengthy explanation of why UBI would not be inflationary in his Reddit Ask Me Anything. I’d quote the whole thing but don’t want to fall afoul of forum rules. Mods, I hope it’s ok to include a few relevant paragraphs, and again these are Andrew Yang's words:
“We have several natural hard-wired conceptions about money. 1. It is scarce. 2. If we all had more of it, it would lose value. 3. It corresponds to your value as a human being.

<<skipped paragraph>>

The truth is that our economy is up to $20 trillion – up $5 trillion in the last 12 years alone – and the amount of money $1,000 a month per adult would inject into the economy would not drive meaningful inflation based upon changes in the money supply. For example, the government printed $4 trillion for the banks in the financial crisis to no meaningful inflation.

If you look at your own experience, most things have not been getting expensive for you over the past number of years or have been improving for a similar cost: Clothing, electronics, media, cars, food, etc. Technology and improving supply chains tend to reduce prices or improve quality over time for most things.

There are 3 exceptions to this that are causing most of the painful inflation in America: 1. Housing 2. Education 3. Healthcare

<<skipped paragraphs>>

I have separate plans to try and reduce housing, education and healthcare costs that you can check out on my website. Those are the core causes of inflation in the U.S., NOT the buying power of our citizens. Putting money in our hands will not increase that pressure on us – it will decrease it greatly and increase our purchasing power to address those areas where inflation does exist.”
And just to be clear yet again, the above are Andrew Yang’s words not mine.

I find his reasoning sound and his argument compelling.
  #220  
Old 03-04-2019, 04:23 AM
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It's a very clever sales pitch, appealing to a coalition of people from all over the current political spectrum. In terms of its challenge to the status-quo, it's even more radical than what Sanders and Trump were offering last time out, but without the historical left/right baggage that each of them carry, making it seem less threatening to those of a moderate disposition.

As Yang would say, it’s not left or right, it’s forward. Which may sound sales-y but damned if it’s not going to resonate with a lot of folks who have had it with puerile, zero-sum politics.

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In electoral terms, it's quite possible someone could make a push for the big chair with a pitch like this in the future. But, if it has any effect in this cycle, it's much more likely just to harm the Democratic nominee by making them seem more establishment and less inspiring.

I’m not certain it cannibalizes the rest of the Democratic field more than it peels off the disenchanted Trump voters in the Rust Belt still waiting for their economic miracle. And if it does pull from the mainstream Dems, then Yang becomes the nominee. I’m not seeing a downside here.

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Originally Posted by Mrs McGinty View Post
In policy terms, taxing tech where it makes humans redundant is a nice idea. Supernormal profits are made therein, and it's entirely reasonable for the state to skim some off to pay for the socio-economic consequences. At this point in time, though, UBI would be a terrible idea. It's far too radical a change, psychologically. I can imagine a future society where people could accept a UBI as part of the social contract and submit to control of its level by technocrats tasked with minimising poverty and other negative outcomes. But right now it could only be implemented in a clientist fashion: literally, but legally, bribing the electorate to vote for you. That does not end well.

Conservatives in the 1930’s thought Social Security was a terrible idea. Technology and wealth creation have undergone almost incomprehensibly radical changes in our lifetimes while social welfare and taxation schemes have scarcely changed at all. This is just an attempt to keep pace.
  #221  
Old 03-04-2019, 07:25 AM
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Nope, I'm sorry, UBI has been taken. Make up a name for whatever you're thinking of.*

https://en.m.wikipedia.org/wiki/Basic_income

*Guaranteed Basic Income maybe?
I think you're probably correct, CK -- I wasn't aware that UBI already had a strict definition but it appears that it does. I suppose I'm thinking more about guaranteed minimum income or a graduated income scheme that would benefit the poorest most heavily and gradually phase out so that it would be a small boost for those who are already earning a strong middle class salary.
  #222  
Old 03-04-2019, 07:33 AM
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Yang has a lengthy explanation of why UBI would not be inflationary in his Reddit Ask Me Anything. I’d quote the whole thing but don’t want to fall afoul of forum rules. Mods, I hope it’s ok to include a few relevant paragraphs, and again these are Andrew Yang's words:
“We have several natural hard-wired conceptions about money. 1. It is scarce. 2. If we all had more of it, it would lose value. 3. It corresponds to your value as a human being.

<<skipped paragraph>>

The truth is that our economy is up to $20 trillion – up $5 trillion in the last 12 years alone – and the amount of money $1,000 a month per adult would inject into the economy would not drive meaningful inflation based upon changes in the money supply. For example, the government printed $4 trillion for the banks in the financial crisis to no meaningful inflation.

If you look at your own experience, most things have not been getting expensive for you over the past number of years or have been improving for a similar cost: Clothing, electronics, media, cars, food, etc. Technology and improving supply chains tend to reduce prices or improve quality over time for most things.

There are 3 exceptions to this that are causing most of the painful inflation in America: 1. Housing 2. Education 3. Healthcare

<<skipped paragraphs>>

I have separate plans to try and reduce housing, education and healthcare costs that you can check out on my website. Those are the core causes of inflation in the U.S., NOT the buying power of our citizens. Putting money in our hands will not increase that pressure on us – it will decrease it greatly and increase our purchasing power to address those areas where inflation does exist.”
And just to be clear yet again, the above are Andrew Yang’s words not mine.

I find his reasoning sound and his argument compelling.
He makes some good arguments indeed, and I don't necessarily believe we would have hyperinflation or anything like that. But by putting an extra, say, $12000 a year in everyone's pocket - all throughout the economy - the initial economic impact of its rollout will be stimulus. But that stimulus could lead to a surge in consumer activity, which could then be followed (at some point) by prices to match the demand.

Even if that doesn't necessarily play out that way, my broader concern is that the poorest in society, the ones who are barely getting by, are the ones who need the highest concentration of free resources, not everyone universally. You want more of that money going to people who are forced to choose between food or electric bills, college or healthcare, and so on. It also helps the rest of the economy by increasing the purchasing power relative to people who already have purchase power -- there's better economic parity.

None of that disregards other issues that I'm guessing Yang has already touched on, like the importance of education and other systems of support that can break welfare dependency.
  #223  
Old 03-04-2019, 10:20 AM
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Yang has a lengthy explanation of why UBI would not be inflationary in his Reddit Ask Me Anything. ...
His lengthy argument is a red herring. It is not per se "inflationary" because it is not adding any money into the system. It's not in net putting more money in people's pockets. It takes it out first. This isn't printing more money or borrowing from the future with even more deficit.

It takes money out, lots of it, by way of VAT (a 10% increase of the costs of goods and services, inclusive of impacts on food like fresh vegetables trucked in, and clothing), and then puts it back in, more over current baseline to the wealthier half, less over the current baseline to the lower half, least of all to the lowest 20%.


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... I don’t think this is Yang's attempt to level the playing field ...
Clearly not. It stacks the playing field further to the wealthier group's advantage.

Yang is very straightforward about this actually. Those who do not get any benefits currently, mostly the upper half of income households, will see an increase of $12K a year per individual over 18 in the household, and pay a share of it back in increased goods and services costs. If OTOH you currently get benefits, which most households in the lower half do, you won't end up seeing an increase of $12K a year per individual over 18 in household (much worse impact for household headed by single parents with kids than ones who have been two adult homes) over now, some maybe none at all, but you will also still pay the same burden of VAT raising the prices of goods and services.

The vast majority of the 4th decile and below gets some safety net benefits currently and would see less than a $12K/yr/adult over 18. Even the 5th decile has more than half. And this is just for those who are non-elderly with children without disability!

Add in those whose current safety net, that this is proposed to replace, is from Federal disability payments, another 14 million Americans on disability, and it is even worse. These 14 million disabled Americans also pay their share of the 10% VAT (by way of increased cost for goods and services), but would not get the same net return.

Actually they would be paying for the VAT and getting no benefit UBI at all as they'd be idiots to trade disability payments for it:
Quote:
People who leave the workforce and go on disability qualify for Medicare, the government health care program that also covers the elderly. They also get disability payments from the government of about $13,000 a year.
It's not great but it's less poor than trying to live off $12K/yr would be.

Yang's proposal would increase wealth inequality. It's a horrible idea.
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Old 03-04-2019, 05:27 PM
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His lengthy argument is a red herring. It is not per se "inflationary" because it is not adding any money into the system. It's not in net putting more money in people's pockets. It takes it out first. This isn't printing more money or borrowing from the future with even more deficit.

It takes money out, lots of it, by way of VAT (a 10% increase of the costs of goods and services, inclusive of impacts on food like fresh vegetables trucked in, and clothing), and then puts it back in, more over current baseline to the wealthier half, less over the current baseline to the lower half, least of all to the lowest 20%.




Clearly not. It stacks the playing field further to the wealthier group's advantage.

Yang is very straightforward about this actually. Those who do not get any benefits currently, mostly the upper half of income households, will see an increase of $12K a year per individual over 18 in the household, and pay a share of it back in increased goods and services costs. If OTOH you currently get benefits, which most households in the lower half do, you won't end up seeing an increase of $12K a year per individual over 18 in household (much worse impact for household headed by single parents with kids than ones who have been two adult homes) over now, some maybe none at all, but you will also still pay the same burden of VAT raising the prices of goods and services.

The vast majority of the 4th decile and below gets some safety net benefits currently and would see less than a $12K/yr/adult over 18. Even the 5th decile has more than half. And this is just for those who are non-elderly with children without disability!

Add in those whose current safety net, that this is proposed to replace, is from Federal disability payments, another 14 million Americans on disability, and it is even worse. These 14 million disabled Americans also pay their share of the 10% VAT (by way of increased cost for goods and services), but would not get the same net return.

Actually they would be paying for the VAT and getting no benefit UBI at all as they'd be idiots to trade disability payments for it:It's not great but it's less poor than trying to live off $12K/yr would be.

Yang's proposal would increase wealth inequality. It's a horrible idea.

I’m well acquainted with VAT, as I’ve lived with it for more than a dozen years. It’s applied at various rates to various commodities and I’m comfortable with the benefit it provides in terms of funding for the social safety net. A 10% VAT is half what I’m used to, but thanks for your explanation of what it means and how it works because most Americans reading this thread won’t have experience with it. Bottom line, you get used to paying a bit more for stuff, life goes on, and in exchange people have access to healthcare. It’s a good trade-off. In the US the trade would be for UBI but it’s the same principle.

With respect to UBI, I think it’s a bit unfair to evaluate it as an anti-poverty program because that’s not what it purports to be. I’m not an economist, but to me it seems more like an economic-acceleration plan or a there's-a-huge-structural-economic-disruption-we-need-to-avert plan. UBI is aimed squarely at otherwise employable people whose jobs are at risk of being automated away. Every other adult just happens to have the ability to opt in if they so choose, and we expect most will because it’s free money. It’s not a panacea and it's not designed with solving poverty or disability in mind, so to claim it doesn’t is, well, accurate but not really getting the point of it.

In re: how the VAT impacts those receiving UBI, except for the poorest of the poor everyone else should do ok. If I’m getting an extra $1,000 per month and VAT is 10%, unless I’m spending more than $10,000 per month I should have some of that Freedom Dividend left over. And most people, certainly not the working poor, are not going to come anywhere close to consuming $10K per month of goods and services.

Yang has more to say about addressing poverty in the third leg of his major policy triad (along with UBI and Medicare for All) and that is Human-Centered Capitalism. Basically, he wants the focus of the economy to be on maximising human welfare and not corporate profits. I know, I know, it’s pie in the sky. But just imagine that kind of world...anyway, if you’re looking to poke holes in his anti-poverty stance, that would be the place to start.
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Old 03-04-2019, 05:28 PM
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Interestingly a mild VAT (5%) was one option analyzed by the Congressional Budget Office when considering option for reducing the deficit.

Any discussion of Yang's proposal should begin with an understanding of how VAT works, and who pays it most. Bolding mine.

Quote:
Originally Posted by CBO
... A value-added tax (VAT) is a type of consumption tax that is levied on the incremental increase in value of a good or service. The tax is collected at each stage of the production process and passed on until the full tax is paid by the final consumer. ...

... A drawback of the option is that it would require the federal government to establish a new system to monitor compliance and collect the tax. As with any new tax, a VAT would impose additional administrative costs on the federal government and additional compliance costs on businesses. A study conducted by the Government Accountability Office in 2008 showed that all of the countries evaluated in the study—Australia, Canada, France, New Zealand, and the United Kingdom—devoted significant resources to addressing and enforcing compliance. Because such compliance costs are typically more burdensome for smaller businesses, many countries exempt some small businesses from the VAT.

Another argument against implementing a VAT is that, as specified under both alternatives in this option, it would probably be regressive—that is, it would be more burdensome for individuals and families with fewer economic resources than it would be for individuals and families with more economic resources. ...
So to add to the regressivity of the benefits, the tax funding system proposed is itself also regressive, impacting those with lower incomes more than those with higher incomes.
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Old 03-04-2019, 10:29 PM
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Meanwhile I found something interesting to this discussion, a Treasury Issue Brief: The Distribution and Evolution of the Social Safety Net and Social Insurance Benefits: 1990 to 2014. I'd call your attention to figure 1 on page 6, which shows "that the bottom decile received the largest average total benefit (an average of approximately $14,180) from the social safety net and social insurance programs, as they have since 1990. So if his website is to be taken at face value the lowest decile does not get meaningfully more money from UBI (but will have to pay the cost of the VAT buried into the higher than otherwise would be costs of goods and services)
That graph doesn't say anything about UBI. UBI doesn't yet exist. That's a graph of how it currently stands. The reason that the lower deciles don't have more money is because the EITC doesn't apply to people without a job, so people with no income get no help. UBI would solve that by giving money to people regardless of their income.

From your source:

Quote:
The dots show that in each of the bottom four deciles at least 88 percent of households received benefits from at least one of the social safety net and social insurance programs. However, those in the bottom decile are slightly less likely than their counterparts in the second, third, and fourth deciles to receive any benefits, primarily because non-earning households are ineligible for the EITC.
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Originally Posted by DSeid View Post
Interestingly a mild VAT (5%) was one option analyzed by the Congressional Budget Office when considering option for reducing the deficit.

Any discussion of Yang's proposal should begin with an understanding of how VAT works, and who pays it most. Bolding mine.


So to add to the regressivity of the benefits, the tax funding system proposed is itself also regressive, impacting those with lower incomes more than those with higher incomes.
According to your source, in the next sentence of the paragraph that you pulled your quote from, it says that there are ways to create a VAT that would ameliorate distributional concerns.

Quote:
Another argument against implementing a VAT is that, as specified under both alternatives in this option, it would probably be regressive—that is, it would be more burdensome for individuals and families with fewer economic resources than it would be for individuals and families with more economic resources. The regressivity of a VAT, however, depends significantly on how its effects are measured. Furthermore, there are ways to design a VAT—or implement complementary policies—that could ameliorate distributional concerns.
The rest of that article is about ways to structure a VAT to reduce the regressive concerns.

The article's solution is to apply a cash flow tax but only gives one line about how it would work or the issues involved in it. Changing the funding source for the UBI shouldn't be a problem. But the logic of why Yang chose that source is that's where the profits that would have gone to the workers now lies. If there are better ideas about the sources of the revenue, that could be discussed and quickly changed. It doesn't negate or change the concept of UBI.
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Old 03-05-2019, 01:13 AM
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For anyone interested in learning more about UBI, Yang's website has some resources that are in one place. (Under the tab "Is there evidence to support the case for UBI?") There's a lot more information on UBI than I thought - 461 research papers.

Quote:
Since 1998, there have been a total of 461 research papers published on the topic. You can view them all here.

In the last 50 years, there have been more than 30 cash transfer programs studied. Here are a few of our favorites:

The “Mincome” Experiment, Manitoba, Canada (reduced hospitalization and no reduction in work hours)
BIG Pilot Project, Namibia (reduced crime, reduced school dropouts, and improved health)
Give Directly, Kenya (increased assets and nutrition, and no change in drugs or violence)
View them all here.
I'm really impressed with his website. That's a lot of information packed into bite-sized pieces with a nice layout. I'm also enjoying his graphic showing his progress to the debates. So cute! He's been reliably getting at least a thousand donors a day. He's at 42.5K of 65K needed to make it to the debates before May 15.

I'm also enjoying an article in the New Yorker from July 2018 on UBI. Yang is mentioned in it, as running for President.

Who Really Stands to Win from Universal Basic Income?
It has enthusiasts on both the left and the right. Maybe that’s the giveaway.


Here's a bit more about the moralizing that happens with means-testing programs. Means-testing requires defining the most deserving. That comes with a certain amount of moralizing about what it means to be deserving. UBI doesn't have that problem.

Quote:
Traditionally, a challenge for means-tested aid is that it must determine who is most deserving—a vestige of the old Elizabethan system. Often, there’s a moralizing edge. Current programs, Lowrey points out, favor the working poor over the jobless. Race or racism plays into the way that certain policies are shaped, and bureaucratic requirements for getting help can be arcane and onerously cumulative. Who will certify the employee status of a guy who’s living on the streets? How can you get disability aid if you can’t afford the doctor who will certify you as disabled? With a universal income, just deserts don’t seem at issue. Everybody gets a basic chance.
Many of the super rich are also in favor UBI. With the system so currently rigged in their favor, they can hold on to the myth that they deserve their wealth while giving a bit to the poor.

Quote:
Many of the super-rich are also super-pumped about the universal basic income. Elon Musk has said it will be “necessary.” Sir Richard Branson speaks of “the sense of self-esteem that universal basic income could provide to people.” What’s the appeal for the plutocracy?
. . .
It also alleviates moral debt: because there is a floor for everyone, the wealthy can feel less guilt as they gain more wealth. Finally, the U.B.I. fits with a certain idea of meritocracy. If everybody gets a strong boost off the blocks, the winners of the economic race—the ultra-affluent—can believe that they got there by their industry or acumen. Of course the very rich appreciate the U.B.I.; it dovetails with a narrative that casts their wealth as a reward.
It's still mostly an illusion though. Chris Hughes, the co-founder of Facebook, realizes he didn't do much for his fortune. He just happened to be Zuckerberg's roommate in college. He is giving a million dollars to the Stockton UBI test trial that is currently being held.

The author of the article ends with the wistful pondering about how life might have gone differently if Nixon was successful with his UBI program. At the time, many Republicans were in favor of UBI. Perhaps the political divide would not be as big today if the economic inequality was not as wide.

Quote:
In “The Failed Welfare Revolution” (2008), the sociologist Brian Steensland suggests that, if Nixon’s Family Assistance Plan had passed, conservative policy might have evolved along a different path. George H. W. Bush, then a congressman, supported the guaranteed-income scheme. So did Donald Rumsfeld. From the late sixties into the seventies, he and Dick Cheney helped run trials on thirteen hundred families to see how much a modest financial top-up discouraged them from working. The falloff was smaller than expected, and the researchers were pleased. We might hope that, with Speenhamland’s false myths finally cleared, the United States will do better going forward. But our aptitude for managing the future is no stronger than our skill at making sense out of the past.
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Old 03-05-2019, 03:45 AM
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Interestingly a mild VAT (5%) was one option analyzed by the Congressional Budget Office when considering option for reducing the deficit.

Any discussion of Yang's proposal should begin with an understanding of how VAT works, and who pays it most. Bolding mine.


So to add to the regressivity of the benefits, the tax funding system proposed is itself also regressive, impacting those with lower incomes more than those with higher incomes.

In that same CBO article are some passages that describe the advantages of a VAT (bolding mine).

Quote:
“More than 140 countries—including all members of the Organisation for Economic Cooperation and Development (OECD), except for the United States—have adopted VATs. The tax bases and rate structures of VATs differ greatly among countries. Most European countries have implemented VATs that have a narrow tax base, with certain categories of goods and services—such as food, education, and health care—excluded from the tax base.
The poor, whose main expenses are arguably food, clothing, shelter and healthcare, would feel less of a hit than those buying discretionary goods. We can tweak VAT to diminish the impact to the poor.

The article then discusses two VAT variants, one that would have raised $2.7T and the other $1.8T during 2016-2018. Those are consequential sums.

Quote:
“One argument in favor of the option is that it would raise revenues without discouraging saving and investment by taxpayers. In any given period, income can be either consumed or saved. Through exclusions, deductions, and credits, the individual tax system provides incentives that encourage saving, but those types of preferences do not apply to all methods of saving and increase the complexity of the tax system. In contrast to a tax levied on income, a VAT applies only to the amount of income consumed and therefore would not discourage private saving and investment in the economy.”

In re: the “burdensome” admin costs to implement VAT - that is a bit of a red herring in my opinion. It smacks of the consultant-speak I used to spew back in the day when trying to bulk up our project fees. Spread some FUD around to bolster your (otherwise weak) point. Sure, there may be some initial pain and incremental cost, but every other developed nation figured it out. I’m pretty sure the US could, too.

One fun anecdote about sales tax (US) vs. VAT (the rest of civilization) - my European friends are forever getting caught out by sales tax when they visit the US. They pick up an item marked $4.99 and go to the register with a $5 bill, only to have to dig out the additional 25 cents to pay the “actual” price of $5.24. Why not just label it $5.24 they all want to know? Over here we pay the price on the sticker. The VAT is already baked in. Not a reason to switch systems but just an observation about differing approaches to taxation.
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Old 03-05-2019, 05:08 AM
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Yang's proposal would increase wealth inequality. It's a horrible idea.
Are you referring to the proposal of some other Yang? The thread is about Andrew Yang.

As President, Yang "will Propose an end to favorable tax treatment for capital gains and carried interest. Ending the carried interest treatment loophole alone would generate $18 billion per year in revenue and ending favorable treatment of capital gains would generate tens of billions more." Yang also proposes a 0.1% tax on financial transactions. These are not taxes which would "increase wealth inequality."

I've not studied Yang's plans in detail. Are child credits deducted from the $1000 UBI? I'd question that, since the UBI is not paid to kids. (This is why I'd start with simple programs like single-payer health and subsidized childcare before disrupting the entire financial system.)
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Old 03-05-2019, 06:47 AM
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Interestingly a mild VAT (5%) was one option analyzed by the Congressional Budget Office when considering option for reducing the deficit.

Any discussion of Yang's proposal should begin with an understanding of how VAT works, and who pays it most. Bolding mine.


So to add to the regressivity of the benefits, the tax funding system proposed is itself also regressive, impacting those with lower incomes more than those with higher incomes.
Yang's concern is that as we rely more on automation and less on human resources for production, we will end up having fewer sources (i.e. people) to collect incomes from. I think he could be right in his assessment that it's a potential future problem, but even he would have to concede he might be talking about a problem that doesn't necessarily exist yet.

Last edited by asahi; 03-05-2019 at 06:48 AM.
  #231  
Old 03-05-2019, 07:47 AM
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I’m well acquainted with VAT, as I’ve lived with it for more than a dozen years. It’s applied at various rates to various commodities and I’m comfortable with the benefit it provides in terms of funding for the social safety net. A 10% VAT is half what I’m used to, but thanks for your explanation of what it means and how it works because most Americans reading this thread won’t have experience with it. Bottom line, you get used to paying a bit more for stuff, life goes on, and in exchange people have access to healthcare. It’s a good trade-off. In the US the trade would be for UBI but it’s the same principle.
Emphasizing the bold, I think that is *the* key element to address. Taxation and raising revenue in and of itself doesn't really achieve much, and VAT tax countries know that. What matters is using that revenue to provide value to the general public: healthcare, quality schools, quality infrastructure - things everyone can use and benefits that the market itself doesn't distribute evenly. This is the deception that American conservatives will engage in to undermine national sales taxes or VAT taxes -- or any tax. Conservatives will tell you taxation is harmful because it just raises taxes and they ignore the part about redistribution and providing value to the public. And when they do get around to talking about it, they respond with the "robbing Peter to pay Paul" rubbish and how, on a philosophical level, it's inherently "unfair".

Stepping away from the issue of the VAT, what's not only inherently fair but also inherently wise is that government should tax and keep taxing until the highest income earners no longer have an incentive to produce more wealth. And Paul Krugman cites several Nobel laureates who conclude - like Alexandria Ocasio-Cortez, interestingly enough - that this hypothetical marginal income tax rate is around 75%. I would probably be satisfied with gradual tax increases over a 10-year period that approach 50-55%, then using that money to invest in universal health care, and welfare program consolidation that evolves into a guaranteed minimum income, with perhaps some additional allowances for housing and transportation - again, gradually. We also need to guarantee that everyone have some kind of access to basic banking services.
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Old 03-05-2019, 08:04 AM
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Are you referring to the proposal of some other Yang? The thread is about Andrew Yang.
.)
He quite clearly was talking about Yang's VAT proposal in conjunction with Yang's UBI. I have no idea what confused you.
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Old 03-05-2019, 02:34 PM
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I’m not certain it cannibalizes the rest of the Democratic field more than it peels off the disenchanted Trump voters in the Rust Belt still waiting for their economic miracle. And if it does pull from the mainstream Dems, then Yang becomes the nominee. I’m not seeing a downside here.
My point is that, barring a political miracle almost immeasurably greater than Trump's success, he's not going to become the nominee.

But he can certainly play a significant role in making whoever is the nominee look worse by the time they get into the actual election campaign, simply by being several attractive things that that person cannot.

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Conservatives in the 1930’s thought Social Security was a terrible idea. Technology and wealth creation have undergone almost incomprehensibly radical changes in our lifetimes while social welfare and taxation schemes have scarcely changed at all. This is just an attempt to keep pace.
Well, for one thing, I'm not a conservative. On the contrary, I believe in significantly greater wealth redistribution and government support than exists either in the US or over here in Blighty. But I'm also a keen student of political psychology, and thus recognise that, if introduced into a place where social obligations are seen as radically less important than the acquisition of personal wealth, UBI represents a clientist trap.

Put bluntly, if you can get enough people to support introducing UBI as a new and untested policy, it will go one of two ways: either it will fail in the first instance and be discarded as an option (possibly forever, if the failure is severe enough), or it will succeed in the first instance, thus creating an insatiable political appetite for its increase. After all, if free money works, why not have more of it?

And the reason this is such a problem is that, by the time you realise you've increased it too far, the political disincentives to reduction will be too great to overcome. This is why mass-scale populist clientism is inherently inflationary in the longer term. If UBI is ever to work, it will have to be off the back of a sales pitch that doesn't treat it as free money for everyone paid for only by the fabulously wealthy.

For another thing, the institution of US Social Security was nothing like as revolutionary as a switch to UBI would be, not least because the former had long been instituted in other comparable countries, whereas the latter would be a leap in the dark. Moreover, those early social security systems were far less radical in scale or scope than any form of UBI would need to be if it were to effect any meaningful change. Social security schemes could achieve their goals of stability and poverty alleviation fairly easily by targeting the resources where they would have most effect.

UBI, by contrast, carries a much less obvious cost-benefit relationship. If it goes wrong, it could cause serious problems for the state's finances, with all the attendant consequences. And, while it may very well fix some labour market issues, paying for it will inevitably create unintended costs elsewhere. Sure, you might well get a short-term economic boost from increased liquidity but, for what I hope are obvious reasons, that can't carry on indefinitely without getting into the inflation problem mentioned above. So when you take away the 'free money is good in itself' part, you're left asking whether there aren't much more important reforms that can be achieved by much less risky means (such as genuinely universal healthcare, the cost-benefit relationship of which is both strongly evidenced and strongly positive).
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Old 03-05-2019, 04:55 PM
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My point is that, barring a political miracle almost immeasurably greater than Trump's success, he's not going to become the nominee.

But he can certainly play a significant role in making whoever is the nominee look worse by the time they get into the actual election campaign, simply by being several attractive things that that person cannot.

That's possible. It’s also possible that Trump has ushered in a new era of politics where big ideas communicated directly to the public via social media and with no intermediaries (or filter, in Trump's case) can outmanoeuvre the backroom, king-making political apparatus. You're saying lightning can’t strike twice. I’m saying the fact that lightning struck once already tells us it can happen again. Yang picked up over $500K in donations in February. That is nontrivial.


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Originally Posted by Mrs McGinty View Post
Well, for one thing, I'm not a conservative. On the contrary, I believe in significantly greater wealth redistribution and government support than exists either in the US or over here in Blighty. But I'm also a keen student of political psychology, and thus recognise that, if introduced into a place where social obligations are seen as radically less important than the acquisition of personal wealth, UBI represents a clientist trap.

I did not mean to imply you are a Tory. I’m in Blighty as well, by the way. Yang seems to have anticipated your criticism as he’s called for a move to human-centred capitalism, which is precisely as you describe: de-emphasis on financial profit, focus on the welfare of the citizens.

And did you mean clientist or clientelist? I had to google both but I’m thinking you meant the latter - that UBI is a form of political patronage? No argument there.

Quote:
Originally Posted by Mrs McGinty View Post
Put bluntly, if you can get enough people to support introducing UBI as a new and untested policy, it will go one of two ways: either it will fail in the first instance and be discarded as an option (possibly forever, if the failure is severe enough), or it will succeed in the first instance, thus creating an insatiable political appetite for its increase. After all, if free money works, why not have more of it?

And the reason this is such a problem is that, by the time you realise you've increased it too far, the political disincentives to reduction will be too great to overcome. This is why mass-scale populist clientism is inherently inflationary in the longer term. If UBI is ever to work, it will have to be off the back of a sales pitch that doesn't treat it as free money for everyone paid for only by the fabulously wealthy.

For another thing, the institution of US Social Security was nothing like as revolutionary as a switch to UBI would be, not least because the former had long been instituted in other comparable countries, whereas the latter would be a leap in the dark. Moreover, those early social security systems were far less radical in scale or scope than any form of UBI would need to be if it were to effect any meaningful change. Social security schemes could achieve their goals of stability and poverty alleviation fairly easily by targeting the resources where they would have most effect.

UBI, by contrast, carries a much less obvious cost-benefit relationship. If it goes wrong, it could cause serious problems for the state's finances, with all the attendant consequences. And, while it may very well fix some labour market issues, paying for it will inevitably create unintended costs elsewhere. Sure, you might well get a short-term economic boost from increased liquidity but, for what I hope are obvious reasons, that can't carry on indefinitely without getting into the inflation problem mentioned above. So when you take away the 'free money is good in itself' part, you're left asking whether there aren't much more important reforms that can be achieved by much less risky means (such as genuinely universal healthcare, the cost-benefit relationship of which is both strongly evidenced and strongly positive).

I think perhaps you underestimate American Conservatives ability to demonise any government program that would seek to redistribute wealth, irrespective of the benefit to the populous. Social security was likened to slavery and Sovietisation; Goldwater, as the Republican candidate for president, mockingly suggested that Medicare didn’t go far enough, that the government should hand out cigarettes and beer as well. The UK has a quaint “Conservative” party but they are about a century ahead of their American namesakes, many of whom have yet to stop fighting the Civil War. UBI is going to be put through the wringer.

With respect to the inevitable inflationary spiral you predict, you may be discounting the central thesis of Yang's argument - the robots are coming and they will soon displace millions of workers. But, at the same time, they will usher in an era of abundance. Technology drives down the cost of goods. It’s anti-inflationary. The places Americans are experiencing painful inflation are housing, healthcare and higher education, and Yang has policy positions on how how he would address each.

I’m not a political philosopher or psychologist, so perhaps my grasp of the issues is not as keen as students of those disciplines. But I do see that this whole discussion has moved away from the Yang candidacy in total and has seized on UBI in isolation, and I don’t think that is the right way to evaluate his whole platform. UBI is a major pillar, but it’s not the only one. UBI in conjunction with changes to the tax code, accessibility to healthcare, affordable housing, technical/trades skills trading, human-centred capitalism and so on will be transformative to society. The skeptics all agree changes that radical can’t happen. Until they do.
  #235  
Old 03-06-2019, 01:13 AM
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First off something last night apparently got swallowed by the hamsters.

How much will it cost and how much does a VAT raise?

Cost of $12K/adult over 18/y is estimated at $3.8 trillion a year. I've read other sources though saying less, down to $3 trillion. We''ll go with that.

Now the idea not actually give an additional $12K/yr to every adult. If you otherwise get $6K is assistance, for example, you have to lose that first, you get $6K more than now, not $12. And indeed some of the cost can be recouped by eliminating other benefits that the half of the population with less income get. Let's leave healthcare alone and consider that

From that link:
Quote:
only income support programs (disability, retirement & social security, welfare, and unemployment benefits) are axed. This would yield ~ 37% of the required funding. Finally, excluding social security, retirement and disability from the list of replaceable programs leaves only 11% of the costs for a UBI of $12,000 covered through replacing existing components of the welfare state.
So including eliminating social security, etc. we still need to raise about $1.6 trillion a year more in new tax revenues.

The CBO analysis has a broad-based VAT (one that includes "purchases of new residential housing, food purchased for home consumption, health care, and postsecondary education" has a 5% VAT averaging $252 billion per year, double that to get to about half a trillion per year at 10% VAT. We are still only a third of the way there.

Ooops.

Quote:
Originally Posted by Heffalump and Roo View Post
...That's a graph of how it currently stands. ...
Yes. It demonstrates that most people in the lower half would lose some money that currently receive in order to receive any UBI, but most in the have no benefits that they would lose.

Let's illustrate the impact with my household and a common fictional one.

My household currently is me, my wife, and my 17 year old daughter soon to leave for college. Others are in post graduate education now or working. We are two professionals and are in an upper income bracket. If the proposal went into effect we'd get $24/K/yr for our household. We get no current benefits so would lose none. Our purchases are not so extravagant. Purchases are a small portion of my income so my VAT won't be so high. So that $24K will go towards increasing my family's wealth (I'll use it to pay for tuitions for the one to start college and the ones in grad school helping them avoid debt, or maybe pay down my mortgage.)

Now compare us with a household of a single mother and her three kids under 10. She is a sales clerk and makes $23K/yr, puts her in the 3rd decile, actually in the middle half. Don't count Medicaid if she is on it, and she still currently gets a bit more than $5K in benefits which she's give up to get her $12K. So her household of 4 would get about $7K more than now. Less than a third of the amount my household would get. Her non-housing, non-education expenses are likely not much different than mine; she has three kids to feed and clothe. By far she is paying more of her income to VAT than I am

Is it right that my upper income household gets three times more benefits than hers does (that goes to family wealth), more than her household's current annual income (!), while she pays a larger share of her income to (partially) pay for the program than I do? Why should this money be redistributed to my household?

Hey I'll take it!


Quote:
Originally Posted by H and R
... it says that there are ways to create a VAT that would ameliorate distributional concerns.



The rest of that article is about ways to structure a VAT to reduce the regressive concerns. ...
To reduce but not eliminate. In any case the funding is still regressive, if not as much so as the payouts.

They discuss going with a narrow-base VAT which would be less regressive ... and raise much less of the already not enough money. Or tax credits ... same. Or scrap VAT altogether and go with different ways to raise revenue. And yes there are ways to tax that are not what Yang has suggested to use to pay for this that are less regressive as funding, even if the payout portion remains regressive. But there is a simple reason Yang does not go there - he is trying to sell the idea that a VAT is something the tech companies pay, not actually a tax that impacts us all and in a regressive manner. He knows Americans don't know how VAT actually works. Putting in terms of a regular tax increase, even one progressively stratified but one that the average voter understands that they will pay, would simply not sell.

Yes, septimus this is Yang's proposal with how he proposes to pay for it.
  #236  
Old 03-06-2019, 01:22 AM
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Yang's concern is that as we rely more on automation and less on human resources for production, we will end up having fewer sources (i.e. people) to collect incomes from. I think he could be right in his assessment that it's a potential future problem, but even he would have to concede he might be talking about a problem that doesn't necessarily exist yet.
And per cites already provided might never.

And as far as
Quote:
Originally Posted by asahi
... the “burdensome” admin costs to implement VAT - that is a bit of a red herring in my opinion.
But the "burdensome" cost (in reality highly efficient) of the administration of the current social safety nets are herrings of a different color?
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Old 03-06-2019, 03:38 AM
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First off something last night apparently got swallowed by the hamsters.

How much will it cost and how much does a VAT raise?

Cost of $12K/adult over 18/y is estimated at $3.8 trillion a year. I've read other sources though saying less, down to $3 trillion. We''ll go with that.

Now the idea not actually give an additional $12K/yr to every adult. If you otherwise get $6K is assistance, for example, you have to lose that first, you get $6K more than now, not $12. And indeed some of the cost can be recouped by eliminating other benefits that the half of the population with less income get. Let's leave healthcare alone and consider that

From that link:So including eliminating social security, etc. we still need to raise about $1.6 trillion a year more in new tax revenues.

The CBO analysis has a broad-based VAT (one that includes "purchases of new residential housing, food purchased for home consumption, health care, and postsecondary education" has a 5% VAT averaging $252 billion per year, double that to get to about half a trillion per year at 10% VAT. We are still only a third of the way there.

Ooops.

Yes. It demonstrates that most people in the lower half would lose some money that currently receive in order to receive any UBI, but most in the have no benefits that they would lose.

Let's illustrate the impact with my household and a common fictional one.

My household currently is me, my wife, and my 17 year old daughter soon to leave for college. Others are in post graduate education now or working. We are two professionals and are in an upper income bracket. If the proposal went into effect we'd get $24/K/yr for our household. We get no current benefits so would lose none. Our purchases are not so extravagant. Purchases are a small portion of my income so my VAT won't be so high. So that $24K will go towards increasing my family's wealth (I'll use it to pay for tuitions for the one to start college and the ones in grad school helping them avoid debt, or maybe pay down my mortgage.)

Now compare us with a household of a single mother and her three kids under 10. She is a sales clerk and makes $23K/yr, puts her in the 3rd decile, actually in the middle half. Don't count Medicaid if she is on it, and she still currently gets a bit more than $5K in benefits which she's give up to get her $12K. So her household of 4 would get about $7K more than now. Less than a third of the amount my household would get. Her non-housing, non-education expenses are likely not much different than mine; she has three kids to feed and clothe. By far she is paying more of her income to VAT than I am

Is it right that my upper income household gets three times more benefits than hers does (that goes to family wealth), more than her household's current annual income (!), while she pays a larger share of her income to (partially) pay for the program than I do? Why should this money be redistributed to my household?

Hey I'll take it!


To reduce but not eliminate. In any case the funding is still regressive, if not as much so as the payouts.

They discuss going with a narrow-base VAT which would be less regressive ... and raise much less of the already not enough money. Or tax credits ... same. Or scrap VAT altogether and go with different ways to raise revenue. And yes there are ways to tax that are not what Yang has suggested to use to pay for this that are less regressive as funding, even if the payout portion remains regressive. But there is a simple reason Yang does not go there - he is trying to sell the idea that a VAT is something the tech companies pay, not actually a tax that impacts us all and in a regressive manner. He knows Americans don't know how VAT actually works. Putting in terms of a regular tax increase, even one progressively stratified but one that the average voter understands that they will pay, would simply not sell.

Yes, septimus this is Yang's proposal with how he proposes to pay for it.

Only that’s not Yang's proposal. It’s your take on VAT based on your own assumptions. Here is Yang's proposal, complete with his assumptions, directly from the https://www.yang2020.com website:
Quote:
How would we pay for Universal Basic Income?

It would be easier than you might think. Andrew proposes funding UBI by consolidating some welfare programs and implementing a Value-Added Tax (VAT) of 10%. Current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally – most would prefer cash with no restriction.

A Value-Added Tax (VAT) is a tax on the production of goods or services a business produces. It is a fair tax and it makes it much harder for large corporations, who are experts at hiding profits and income, to avoid paying their fair share. A VAT is nothing new. 160 out of 193 countries in the world already have a Value-Added Tax or something similar, including all of Europe which has an average VAT of 20 percent.

The means to pay for a Universal Basic Income will come from 4 sources:

1. Current spending. We currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and the like. This reduces the cost of Universal Basic Income because people already receiving benefits would have a choice but would be ineligible to receive the full $1,000 in addition to current benefits.

2. A VAT. Our economy is now incredibly vast at $19 trillion, up $4 trillion in the last 10 years alone. A VAT at half the European level would generate $800 billion in new revenue. A VAT will become more and more important as technology improves because you cannot collect income tax from robots or software.

3. New revenue. Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $500 – 600 billion in new revenue from economic growth and activity.

4. We currently spend over one trillion dollars on health care, incarceration, homelessness services and the like. We would save $100 – 200 billion as people would take better care of themselves and avoid the emergency room, jail, and the street and would generally be more functional. Universal Basic Income would pay for itself by helping people avoid our institutions, which is when our costs shoot up. Some studies have shown that $1 to a poor parent will result in as much as $7 in cost-savings and economic growth.

That’s Yang's proposal. If you want to argue against it that’s great, but please stick to the facts and don’t misattribute your reasoning for his.

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Originally Posted by DSeid View Post
And per cites already provided might never.

And as far as But the "burdensome" cost (in reality highly efficient) of the administration of the current social safety nets are herrings of a different color?
I’m the originator of the “burdensome” quote, not asahi. And I maintain my contention that the current array of 126 separate aid programs is not efficient, and that introducing a VAT would be less problematic than the naysayers would have us believe. We have 160 working models to choose from around the globe.

Do you have direct experience with current aid programs? I know, anecdote does not equal data, but from what my family went through the only efficient part is getting the figurative cheque mailed out at the end. Which, by the way is another sound bite from Yang in support of UBI - one of the things the US government really excels at is sending regular cheques to large numbers of people.
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Old 03-06-2019, 07:06 AM
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Only that’s not Yang's proposal. It’s your take on VAT based on your own assumptions. Here is Yang's proposal ...

... That’s Yang's proposal. If you want to argue against it that’s great, but please stick to the facts and don’t misattribute your reasoning for his.
And what part of how I have represented his proposal do you believe is an incorrect interpretation?

His proposal to fund with a Value-Added Tax (VAT) of 10% or the part in which current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally, cutting out welfare programs, food stamps, disability and the like?

Is your issue that you distrust CBO estimates of what even a broad-based very regressive VAT would raise? Or that you think a VAT of 10% would raise not twice what a VAT of 5% would but more than 3x it? Nice that Yang claims (a still way too small) number of $800 billion ... but where does that number come from?

Yang does not actually give a number for how much it would cost. Do you have other sources that claim a UBI of $12K would cost less than the $3 trillion I have found as the lower end estimate?

Or is it that I am not taking into account the eventual new revenue that is sure to occur (which if it eventually did, would first of all not raise enough on its taxation to make a dent in the shortfall and would be in the context of the negative impact of his promised Robo-apocolypse.) Or the magic that UBI would get everyone taking better care of themselves, solve crime, reduce health care costs prevent homelessness, make teeth whiter, and cause the wolf to lay down with the lamb?



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... I maintain my contention that the current array of 126 separate aid programs is not efficient, and that introducing a VAT would be less problematic than the naysayers would have us believe. We have 160 working models to choose from around the globe. ...
Okay, here I made a mistake. Sorry to have put the wrong name as the quote. Otherwise though, I stand by my points.

Yes we have models of VAT around the world and they demonstrate that VAT requires "significant resources to addressing and enforcing compliance" It is not a magic wand that just happens anywhere.

I'll do more than dispute that our current safety net programs are horribly efficient with huge administration cost, I'll back it up.
Quote:
This statement is false. Budget data for the major low-income assistance programs — Medicaid, food stamps (now known as the Supplemental Nutrition Assistance Program, or SNAP), the Supplemental Security Income program for the elderly and disabled poor, housing vouchers, the school lunch and breakfast programs, and the Earned Income Tax Credit — show that, in every case, federal administrative costs range from less than 1 percent to 8 percent of total federal program spending. Combined federal and state administrative costs range from 1 percent to 10 percent of total federal- and state-funded program spending. ...

... 91 to 99 percent of total federal spending on these programs reaches beneficiaries in the form of benefits or services, as does 90 to 99 percent of combined federal and state spending for these programs....
The social safety net needs to be expanded, not cut down and replaced with a regressive system funded by a regressive tax. At least those other countries that use VAT as a major part of their tax base use it to support the social safety net ... not to give money to those in upper income brackets.

Last edited by DSeid; 03-06-2019 at 07:09 AM.
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Old 03-06-2019, 07:54 AM
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I’m the originator of the “burdensome” quote, not asahi. And I maintain my contention that the current array of 126 separate aid programs is not efficient, and that introducing a VAT would be less problematic than the naysayers would have us believe. We have 160 working models to choose from around the globe.
Except Yang isn't going to eliminate those 126 aid programs. That's what an ideal UBI would do but Yang is specifically saying (in the very text you quoted!) "people already receiving benefits would have a choice but would be ineligible to receive the full $1,000 in addition to current benefits."

And I have no idea what your objection is to DSeid's analysis. The regressive nature of a VAT is well known and a monthly check that only goes to people who don't currently need government assistance should be equally obviously regressive.

Last edited by CarnalK; 03-06-2019 at 07:55 AM.
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Old 03-06-2019, 08:24 AM
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And per cites already provided might never.

And as far as But the "burdensome" cost (in reality highly efficient) of the administration of the current social safety nets are herrings of a different color?
I never avoided the issue of burdensome administrative costs - they're a thing. But those costs can be offset if we provide value, which is why I have modified my stance somewhat and moved away from what I thought I knew of UBI and instead clarified by saying I'm more in favor of minimim guaranteed income. I'm for reallocation not just pumping more money in everyone's pocket. The UBI would work as a short-term stimulus, just like a tax rebate. Minimum guaranteed income would take money supply, and recirculate it to the part of the economy that needs it the most.
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Old 03-06-2019, 03:17 PM
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And what part of how I have represented his proposal do you believe is an incorrect interpretation?

His proposal to fund with a Value-Added Tax (VAT) of 10% or the part in which current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally, cutting out welfare programs, food stamps, disability and the like?

Is your issue that you distrust CBO estimates of what even a broad-based very regressive VAT would raise? Or that you think a VAT of 10% would raise not twice what a VAT of 5% would but more than 3x it? Nice that Yang claims (a still way too small) number of $800 billion ... but where does that number come from?

Yang does not actually give a number for how much it would cost. Do you have other sources that claim a UBI of $12K would cost less than the $3 trillion I have found as the lower end estimate?

Or is it that I am not taking into account the eventual new revenue that is sure to occur (which if it eventually did, would first of all not raise enough on its taxation to make a dent in the shortfall and would be in the context of the negative impact of his promised Robo-apocolypse.) Or the magic that UBI would get everyone taking better care of themselves, solve crime, reduce health care costs prevent homelessness, make teeth whiter, and cause the wolf to lay down with the lamb?



Okay, here I made a mistake. Sorry to have put the wrong name as the quote. Otherwise though, I stand by my points.

Yes we have models of VAT around the world and they demonstrate that VAT requires "significant resources to addressing and enforcing compliance" It is not a magic wand that just happens anywhere.

I'll do more than dispute that our current safety net programs are horribly efficient with huge administration cost, I'll back it up.
The social safety net needs to be expanded, not cut down and replaced with a regressive system funded by a regressive tax. At least those other countries that use VAT as a major part of their tax base use it to support the social safety net ... not to give money to those in upper income brackets.

You somewhat address the first point in his plan, thoroughly address the second point, VAT, and then are pretty dismissive of points 3 and 4, which account for substantial revenues, cost savings and massive economic growth - the point of the plan. Yang's UBI does not cure poverty by handing money to poor people. What it will do is ensure nobody falls below the poverty line (currently $12K and change for a single adult) and provide a massive engine of opportunity for many people currently trapped in the benefits cycle. Given the resistance to awarding “government handouts” to undeserving layabouts as well as the potential social stigma attached to being a recipient of such handouts, Yang figures the best approach is just to give everybody the dividend. It's opt in, it won’t be forced on anyone who doesn’t want it.

To fund UBI he proposes to use a VAT, which as you have gone to great pains to point out and no one is arguing, is a regressive tax, particularly for people at the extreme ends of the income scale. Yes, the multimillionaire receiving $12K per year won’t need it, but he will also pay back more into the system than he takes out. The overwhelming majority between the extremes will benefit to greater or lesser degree and that will fuel economic growth. The millions of jobs created will produce opportunities, including jobs for people currently disincentivized from looking for work because they have to be below a certain income level to qualify for benefits. For example, there is currently a plague of abuse of the Social Security Disability Insurance System ($143B in 2017) - what started as a small program to help the legitimately disabled mushroomed into a safety net for millions of unemployed people, particularly in the Rust Belt states that lost 4M manufacturing jobs due to automation. Those people could all get the same level of support from a UBI as they currently get from their benefits and they would be freed up to go into the marketplace to find a job. Right now they sit on the sidelines because they would lose their benefits. There are 126 (brutally-efficient, running-like-clockwork, staffed-by-highly-motivated-public-servants and not-at-all-prone-to-fraud-waste-and-abuse ) aid programs accounting for hundreds of billions in spending and tens of millions of unemployed or underemployed workers. Get those people off benefits, onto UBI and back in the workforce et voila, suddenly they, too, are in that broad, broad middle chunk of folks benefiting under Yang's VAT scheme.

And we’ve not even gotten into Yang's Progressive agenda like Medicare for All and capital gains taxation and human-centered capitalism and...really, it’s all on his website. He could not be more transparent. If you want to poke holes in VAT because it’s regressive, that’s not seeing the whole picture. You’re looking at the Mona Lisa through a keyhole, seeing an eye staring back at you and wondering what all the fuss is about.
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Old 03-06-2019, 03:26 PM
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Except Yang isn't going to eliminate those 126 aid programs. That's what an ideal UBI would do but Yang is specifically saying (in the very text you quoted!) "people already receiving benefits would have a choice but would be ineligible to receive the full $1,000 in addition to current benefits."

And I have no idea what your objection is to DSeid's analysis. The regressive nature of a VAT is well known and a monthly check that only goes to people who don't currently need government assistance should be equally obviously regressive.
I believe UBI will reduce the need for all those aid programs substantially. Maybe they don’t go away, but they shrink organically, along with their associated bureaucracies and costs. In re: the VAT, I just posted a response to DSeid which I would refer you to. You’re both quite invested in this idea that because VAT is regressive (it is, no one is arguing that point) the whole Yang platform is as well. That’s not the case. But it’s all on the Yang2020 website if you’d care to read up on it. He’s an open book - which is a big part of what I find appealing about him.
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Old 03-06-2019, 04:02 PM
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I believe UBI will reduce the need for all those aid programs substantially. Maybe they don’t go away, but they shrink organically, along with their associated bureaucracies and costs. In re: the VAT, I just posted a response to DSeid which I would refer you to. You’re both quite invested in this idea that because VAT is regressive (it is, no one is arguing that point) the whole Yang platform is as well. That’s not the case. But it’s all on the Yang2020 website if you’d care to read up on it. He’s an open book - which is a big part of what I find appealing about him.
I am not at all invested in thinking his whole platform is regressive. UHC certainly isn't.

Tell me, which benefits programs do you think will dwindle in use with a UBI of $1000/month?

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Old 03-07-2019, 12:26 AM
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You somewhat address the first point in his plan, thoroughly address the second point, VAT, and then are pretty dismissive of points 3 and 4, which account for substantial revenues, cost savings and massive economic growth - the point of the plan. Yang's UBI does not cure poverty by handing money to poor people. What it will do is ensure nobody falls below the poverty line (currently $12K and change for a single adult) and provide a massive engine of opportunity for many people currently trapped in the benefits cycle. Given the resistance to awarding “government handouts” to undeserving layabouts as well as the potential social stigma attached to being a recipient of such handouts, Yang figures the best approach is just to give everybody the dividend. It's opt in, it won’t be forced on anyone who doesn’t want it.

To fund UBI he proposes to use a VAT, which as you have gone to great pains to point out and no one is arguing, is a regressive tax, particularly for people at the extreme ends of the income scale. Yes, the multimillionaire receiving $12K per year won’t need it, but he will also pay back more into the system than he takes out. The overwhelming majority between the extremes will benefit to greater or lesser degree and that will fuel economic growth. The millions of jobs created will produce opportunities, including jobs for people currently disincentivized from looking for work because they have to be below a certain income level to qualify for benefits. For example, there is currently a plague of abuse of the Social Security Disability Insurance System ($143B in 2017) - what started as a small program to help the legitimately disabled mushroomed into a safety net for millions of unemployed people, particularly in the Rust Belt states that lost 4M manufacturing jobs due to automation. Those people could all get the same level of support from a UBI as they currently get from their benefits and they would be freed up to go into the marketplace to find a job. Right now they sit on the sidelines because they would lose their benefits. There are 126 (brutally-efficient, running-like-clockwork, staffed-by-highly-motivated-public-servants and not-at-all-prone-to-fraud-waste-and-abuse ) aid programs accounting for hundreds of billions in spending and tens of millions of unemployed or underemployed workers. Get those people off benefits, onto UBI and back in the workforce et voila, suddenly they, too, are in that broad, broad middle chunk of folks benefiting under Yang's VAT scheme.

And we’ve not even gotten into Yang's Progressive agenda like Medicare for All and capital gains taxation and human-centered capitalism and...really, it’s all on his website. He could not be more transparent. If you want to poke holes in VAT because it’s regressive, that’s not seeing the whole picture. You’re looking at the Mona Lisa through a keyhole, seeing an eye staring back at you and wondering what all the fuss is about.
I'm going to respond a bit out of order. First I am not at all discussing Yang's whole platform. Just the part that is distinctly different than most others, the UBI and how to pay for it. He's saying he's for Medicare for All? The D who isn't saying that is the bigger news.

The multimillionaire who will pay in more than he pays out. Okay, back to case study of my household (and the woman at about the 28%ile). My wife and I count as a millionaire household ... mind most of it is the retirement portfolio which as we turn 60 should be up there ... but in practical terms there is also the intergenerational transfer of wealth we've already achieved by paying for our kids' educations. Our kids will be finishing education (likely all graduate education inclusive) with insignificant debt, compared to the debt anchor many/most of their peers have. Not 1%ers but income solidly top decile. Again together we would get that $24K with no loss of extant benefits. Make it simple and consider VAT as being on complete purchase prices. Would we more than contribute that back in VAT? No, we do not consume $240K of goods and services each year. Not sure how many married couples do even in the top decile. I think you have to get even beyond the 1% and into the 0.1% until you start seeing average years looking like that. We would be taking more out than in.

Who would opt out? As much as I think my bracket should not get it, I'll take it. You really think that any meaningful number of even the 1%ers, heck even the 0.1%ers will opt out of taking free money? Buffet maybe. Not sure about Oprah. Musk would take it. Pretty sure Bezos too. And the Kochs? What do you think?


You are right that I dismiss the magical thinking portions pretty much out of hand and find the arguments for them to be incoherent.

I'm hearing on the one hand that the future is a robo-apocolypse in which there will be few jobs. This plan is to promote the dignity of not working, which is the fate for more and more of us as automation does more and more, displacing more from the middle into the lower and the unemployed.

And OTOH that shuffling money, as you acknowledged is accurate, regressively, will be a stimulus trickling down to create new good jobs that are not automated away, way in excess of the jobs that we have now, enough that the 10% VAT on what they consume with their up to (but usually less if in the lower half of the income spectrum) $12K UBI can fund the program. Perpetual motion machine baby! Think exponentially! Those who don't have the needed skills for new jobs can use the $12K to get the training they need instead of living off of it and use their time to do that instead of working.

Not sure what the actual argument is supposed to be as it shifts for the needs of the moment.

How about disability? One no, the UBI does not pay as much as disability payments do. Disability is over a thousand more. Two, do you have a cite for how many are sitting on the sidelines not actually disabled, actually able to work a job that they are qualified for, who are only not working because they don't want to lose their disability benefits? Realize that someone with a High School degree only is not qualified to work as an accountant or many other desk jobs. Back pain when standing or lifting might disable them from being a software programmer but it does from janitorial work, most manual labor, factory work, or even standing at counter sales.
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Old 03-07-2019, 03:45 AM
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The social safety net needs to be expanded
In what ways should the social safety net be expanded, and where will the money come from?

Which of the candidates who will be running for President in 2020, are proposing to increase monetary low-income assistance programs, particularly ones for people who have lost jobs due to displacement by automation, not just for people who already have jobs?

Last edited by Heffalump and Roo; 03-07-2019 at 03:46 AM.
  #246  
Old 03-07-2019, 08:32 AM
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I'm looking forward to hearing the details of the specific ideas to be expressed by the various candidates as the election season progresses and hearing the debates about them.

It's a hijack away from this thread but sure I'll share the sorts of things that appeal most to me.

My lean so far is to shoring up Obamacare, which has survived the best attempts to cut its legs from underneath it, and building on it with an opt-in expansion of Medicare to 50 years or older. This is self-funding. Once that proves itself I'd want to see the opt-in available to compete more fully in the marketplace.

Living wage legislation. There currently are jobs, they just pay too little to live off of.

Expansion of SNAP.

To me though the biggest issue is the hollowing out of the middle class and the increasing concentration of wealth and power in the hands of the extremely few, not the 1% but the 0.1%. Paying for expanded safety nets with higher taxes at incomes over a million, and yes slightly greater taxation on capital gains and dividends possibly on a progressive scale. Serious considerations should be given to financial transaction taxes. Those monies can also be redirected in part to expanding EITC.

We need to invest in the green energy sector which can create jobs that pay well.

New technologies are eliminating some jobs and it will create others for those who can learn them. We need to be sure we are creating a large population of workers prepared for them. That means education beyond HS without crippling debt (not necessarily free). Some of HRC's ideas last cycle were good for that but I am also waiting to hear some serious plans suggested and debated that would encourage expansion of post HS education delivered less expensively.
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Old 03-07-2019, 10:19 AM
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I'm going to respond a bit out of order. First I am not at all discussing Yang's whole platform. Just the part that is distinctly different than most others, the UBI and how to pay for it. He's saying he's for Medicare for All? The D who isn't saying that is the bigger news.

The multimillionaire who will pay in more than he pays out. Okay, back to case study of my household (and the woman at about the 28%ile). My wife and I count as a millionaire household ... mind most of it is the retirement portfolio which as we turn 60 should be up there ... but in practical terms there is also the intergenerational transfer of wealth we've already achieved by paying for our kids' educations. Our kids will be finishing education (likely all graduate education inclusive) with insignificant debt, compared to the debt anchor many/most of their peers have. Not 1%ers but income solidly top decile. Again together we would get that $24K with no loss of extant benefits. Make it simple and consider VAT as being on complete purchase prices. Would we more than contribute that back in VAT? No, we do not consume $240K of goods and services each year. Not sure how many married couples do even in the top decile. I think you have to get even beyond the 1% and into the 0.1% until you start seeing average years looking like that. We would be taking more out than in.

Who would opt out? As much as I think my bracket should not get it, I'll take it. You really think that any meaningful number of even the 1%ers, heck even the 0.1%ers will opt out of taking free money? Buffet maybe. Not sure about Oprah. Musk would take it. Pretty sure Bezos too. And the Kochs? What do you think?


You are right that I dismiss the magical thinking portions pretty much out of hand and find the arguments for them to be incoherent.

I'm hearing on the one hand that the future is a robo-apocolypse in which there will be few jobs. This plan is to promote the dignity of not working, which is the fate for more and more of us as automation does more and more, displacing more from the middle into the lower and the unemployed.

And OTOH that shuffling money, as you acknowledged is accurate, regressively, will be a stimulus trickling down to create new good jobs that are not automated away, way in excess of the jobs that we have now, enough that the 10% VAT on what they consume with their up to (but usually less if in the lower half of the income spectrum) $12K UBI can fund the program. Perpetual motion machine baby! Think exponentially! Those who don't have the needed skills for new jobs can use the $12K to get the training they need instead of living off of it and use their time to do that instead of working.

Not sure what the actual argument is supposed to be as it shifts for the needs of the moment.

How about disability? One no, the UBI does not pay as much as disability payments do. Disability is over a thousand more. Two, do you have a cite for how many are sitting on the sidelines not actually disabled, actually able to work a job that they are qualified for, who are only not working because they don't want to lose their disability benefits? Realize that someone with a High School degree only is not qualified to work as an accountant or many other desk jobs. Back pain when standing or lifting might disable them from being a software programmer but it does from janitorial work, most manual labor, factory work, or even standing at counter sales.

Actuality the data on disability are quite encouraging (sounds horrible put that way actually - no offence to anyone).

https://www.ssa.gov/policy/docs/stat...16/sect01.html

Per the 2016 data there were a bit north of 10M people receiving disability benefits. The payment breakout is detailed on the site (chart 5) but the headline is disabled men average a bit less than $1300/mo. (below UBI full replacement), disabled women about $1050 (still below but close to UBI replacement), while disabled widows/widowers and disabled adult children all top out well below $800 (below UBI replacement). Under UBI everyone on more than $1K stays as they are while everyone else switches over and comes out ahead, net of increased VAT expense. The question then becomes can the rest of Yang’s agenda find additional cost savings for anyone who may actually be worse off after UBI.

Dare I mention Medicare for All? How about paid family leave, mandated equal pay, reduced mass incarceration, controlling the cost of higher education, increased funding for vocational education, carbon fee and dividend, banking through the post office, increased assistance for single parents, prosperity grants, and all the hundred other things in the Yang platform all centered around the same theme of moving America forward with opportunity for all?

As for how many people are collecting disability payments fraudulently? Great question. Let’s take a poll. Would everyone defrauding the government please raise your hand? Yeah, it’s notoriously difficult to get that kind of data. One interesting (or sad) note: if you look at chart 3 at the link you will see a US map showing disability rates by state. The industrial Midwest and the rural South tend towards higher rates. Are people in Michigan and West Virginia just unlucky? Or did their major industries contract, forcing people to find other ways to survive, including going on disability? No telling. But I think it’s likely.

If we looked at the other 125 aid programs i think we’d find a similar mixed bag. Some will benefit from UBI and others will do better staying put. But no one who wants to work will be forced to stay on subsistence-level benefits.

Do you really think VAT is regressive? Strange that you never mentioned it before.

How about the fact we’ll get the Apples and the Googles and the JP Morgans and all the other megacorporations currently, perfectly legally, skating on their tax obligations to pay their share? Doesn’t that warm your progressive little heart? It does mine.

Look, everyone’s going to be lucky but you’re going to be one of the luckier ones. You won’t turn down a free $1,000/mo. even though you don’t need it. Most people won't. But I’m guessing you're not going to turn into Scrooge McDuck and hide all the cash under your mattress, either. You’re a level-headed person so you’re going to invest most of it in a diversified portfolio heavy on low-fee index funds yadda yadda. But maybe, just maybe, you’ll also take your lovely wife out for dinner one more time per month than you do now. And maybe, just maybe, when you visit your favourite restaurant it will be a bit more crowded now because lots of other people also feel well-off enough to eat out a bit more. And maybe the restaurant owner has to hire three more waiters and a prep-chef to keep pace with demand. All of whom now pay taxes and...multiply by the number of clothing stores, hobby shops, vegan cat cafes, bait and tackle shops, etc. and is it really so hard to envision that if you inject a ton of cash into the economy people are going to spend it?

Will some people abuse UBI and sit in their basement and play video games the rest of their lives? I have an ex-son-in-law who will for sure. (He tried to get hired at a local mill in order to injure himself and collect disability - not expecting him to get a MacArthur Foundation grant anytime soon.) But for every one like him there will be ten others who think, “Hey, I could make some money delivering craft beers to video game-playing shut-ins!” Or avocado toast. Or vitamin D tablets. Or whatever.

I think this stuff is inspiring and you my friend see the glass half empty. That’s cool. It takes all kinds. But if it’s all the same to you, I’d like us to unhijack this thread and step back from this laserlike focus on VAT (it’s a regressive tax, have you heard?) to allow some oxygen to discuss other aspects of the Yang campaign. For example, he’s at 49/65K donors - he’s defo on track to make the debate. Assuming that during the debate he could explain UBI and how it’s funded to your satisfaction (it’s clear that I cannot and I’m ok with that) are there other objections you have to his candidacy and what might those be?
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Old 03-07-2019, 10:36 AM
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I am not at all invested in thinking his whole platform is regressive. UHC certainly isn't.

Tell me, which benefits programs do you think will dwindle in use with a UBI of $1000/month?
This is what I find a little difficult to believe, which is that everyone getting UBI eliminates the need for all those aid programs. If those on the income floor are earning $12000, they're going to need a hell of a lot more to survive than that, especially if everyone else is receiving the exact same benefit. I like a lot of what Yang is thinking about, but I think your earlier analysis was quite correct: some of his ideas need to be worked out.
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Old 03-07-2019, 10:37 AM
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I am not at all invested in thinking his whole platform is regressive. UHC certainly isn't.

Tell me, which benefits programs do you think will dwindle in use with a UBI of $1000/month?
I cited a couple in my response to DSeid. Disabled widows/widowers and disabled adult children. I’m guessing if we went through the other 125 aid programs we might find a couple more. But, as per my other response, I seem to have found myself in the role of defending VAT/UBI against all comers and that’s not what I came here to do. If you’re opposed to VAT/UBI, go with whatever gods you believe in and blessings upon you.
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Old 03-07-2019, 11:14 AM
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Well, I'm really only strongly opposed to this kind of pie in the sky version that Yang is proposing. I'll note that many of the actual government studies cited on his UBI reference page are better termed negative income tax studies. Those are a lot more defensible, since then we don't have to worry about giving millionaires free money. And to get the funds he's predicting from his VAT, it would have to be very very aggressive. Almost all other western countries that have a VAT give exemptions or discounts for basic household goods to take a little of the regressive edge off but Yang's clearly would not.

So imho, people saying he's so darn data driven and not playing politician are wrong. A VAT is not sticking it to Google and Apple. We're all just going to pay more for their products. And a thoughtful guaranteed income program isn't just "free money!".
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