Split UBI - Split From Breakdown In Civil Order

[bigfield]

In the implementation phase, employers are required to cut wages by $X per week across all employment sectors; Employee total income on week one of UBI should be equal to their total income the previous week, the difference being that now the employer only pays the amount above $X.

For employees whose incomes are below $X, the employer and employee would negotiate a new pay structure (which might be "tips only", or a small wage, or the elimination of the job altogether; or any other mutually acceptable arrangement).

Future wage and salary levels are purely a matter between employers and employees; Raises and/or pay cuts by mutual agreement. If employees are unhappy, they can quit; If employers are unhappy, they can fire.

Can't imagine the unions being impressed. They are effectively out of a job, or more accurately a function.
Since you are an Aussie you would know how wedded we are to Enterprise Agreements and workplace bargaining.

That makes no sense.

Employees would still benefit from collective bargaining and unions would still be the best way for workers to organise.
Agreements between employees and management would still be formalised in EAs. UBI would only change the pay levels in these agreements.

Besides, unions also bargain for a whole range of other conditions besides pay.

A lot of smaller workplaces do not have EAs and their employees are not in a union. These employers are currently required to pay wages according to industrial awards, which specify schedules of wages based on job classifications.

If we implemented a UBI we might scrap the pay provisions in these industrial awards, and leave it up to employees in small shops/offices to negotiate better pay commensurate with their level of responsibility and skill. But some employees would definitely suffer: not everybody is good at negotiating.

I think we would need to keep some kind of pay provisions in industrial award or in the national employment standards, which require all employers to give their workers automatic pay rises at the beginning of each financial year to at least keep pace with inflation. This is a critical feature of awards and ensures that employees aren't forced to negotiate each year just to avoid a cut in real wages.

 

[Toni]

How about this: How about instead of calling it Universal Basic Income, we call it profit sharing? Everyone would be invested in maximizing the ‘profit.’

 

[laughing dog]

And what are you going to do when middle-income people start looking at their ever increasing tax bill and realize that they could stop working and maintain the same standard of living?

15k is middle income?
Guess my perspective is really warped, b’cause that looks an awful lot like abject poverty to me. Maybe “middle-income prople” are already living in a cardboard box under an overpass, so maintaining their standard of living isn’t that heavy a lift?

I picked 15K because it is a little more than the official US federal poverty line for a single person and it made the arithmetic easier.

 

[Elixir]

How about this: How about instead of calling it Universal Basic Income, we call it profit sharing? Everyone would be invested in maximizing the ‘profit.’

Bravo!
Loren and Emily can totally lay claim to the acronym UBI and rightfully pooh-pooh it, since handing every American a check for $15k is not a realistic plan. Maybe something that universally guarantees a minimum basic income of around $15k would be preferable, as long as we don't call it UBI.

 

[bilby]

The details of the implementation are about efficiency.
. . .
As I envisage it, a UBI looks like this:

Every citizen over the age of 18 gets paid a weekly sum of $X

All other government payments directly to citizens are scrapped.

People who were injured at work and are thus disabled and permanently unable to work even though they want to[,] receive government payments to compensate for the injury. But in your plan they get only the same $15,000 that happy high-paid workers get?

The $15,000 figure isn't anything to do with me; I consider it to be too low for everybody*

But yes, they would get the same income as other people do. Plus, of course, any damages awarded against the employer whose poor safety practices led to their injury (should that be the cause).

And (I figured this went without saying, but, Americans..., so) obviously the universal healthcare system provides support services according to their medical needs (whether consequent to an injury, illness, congenital condition, or any other cause).







* Though having said that, $15,000 is the household poverty level
income in the US today; An income of $15,000 per adult would put household income at around 1.8 times that, at $27,000; If the UBI was also paid to children, a $15,000 UBI would equate to 2.6 times the poverty level, at about $39,000 per household

This conflation of household vs personal income is another way in which "poverty level" UBI can be falsely presented as unaffordable.

 

[bilby]

Exemption for blindness removed?

Yes.

Deductions for charitable donations removed?

Yes.

Deductions for very high medical bills removed?

What's a "medical bill"?

 

[bilby]

People earning very low wages but now getting $15,000 extra would be likely to quit their job unless they got a raise.

Good.

That's one of the purposes of the exercise.

 

[Swammerdami]

Deductions for very high medical bills removed?

What's a "medical bill"?

Many Americans, even when insured, must pay large costs of hospitalizations, drugs, etc. out of pocket. If such costs (incl. cost of insurance?) exceed some threshold, the payments are (or were -- I'm not up on the Trump "reforms") subsidized by USG by subtracting from taxable income,. If the whole insurance-payer system is dismantled in your solution, and replaced with single-payer then you're adopting a key part of my proposal, AFAIK not explicit in other UBIs.

People earning very low wages but now getting $15,000 extra would be likely to quit their job unless they got a raise.

Good.

That's one of the purposes of the exercise.

There we agree, as I hinted at in a paragraph you snipped:

And BTW, do we even know that average wages would be reduced? People earning very low wages but now getting $15,000 extra would be likely to quit their job unless offered a raise.\

. . .
Best is to emphasize non-cash programs: Single-payer healthcare, subsidized childcare, subsidized housing, subsidized food. Any Infidels want to jump on that bandwagon?

 

[Elixir]

What's a "medical bill"?

A medical bill is a document sent out, usually by a Medical Billing Company and ostensibly on behalf of a doctor or hospital, to anyone who has had any kind of interaction with anyone who is or is contracted as a medical professional. This is done routinely and repeatedly, regardless of whether that person's insurance company - or the person themself - has already paid the entity for whom they work. The Medical Billing Company gets to keep a big cut of whatever they can coerce from the so-called patients beyond what they would have otherwise realized.
Medical Billing Companies have to eat too.

 

[Toni]

What's a "medical bill"?

A medical bill is a document sent out, usually by a Medical Billing Company and ostensibly on behalf of a doctor or hospital, to anyone who has had any kind of interaction with anyone who is or is contracted as a medical professional. This is done routinely and repeatedly, regardless of whether that person's insurance company - or the person themself - has already paid the entity for whom they work. The Medical Billing Company gets to keep a big cut of whatever they can coerce from the so-called patients beyond what they would have otherwise realized.
Medical Billing Companies have to eat too.

The medical practices and hospitals I’m familiar with handle billing in house. Even the small clinic in my town has on staff specialists who are familiar with the various vagaries and quirks of various insurance companies, including Medicaid ( for the poor) and Medicare (for the elderly, who often have privately paid Medicare supplements. Which are also billed.

My own medical provider doesn’t usually post billing statements to my account until and actually after my insurance company has paid and sent me the EOB state by breaking down how much was paid or denied and the appropriate codes.

But I’ve lived in other states, had different kinds of insurance with different ways of handling billing. Honestly, it’s all been pretty standard, although we were not fully covered by insurance when our firstborn was born which meant that I was expected to pay most of the obstetricians’ bill up front.

 

[Loren Pechtel]

Fewer people working fewer hours = lower productivity = fewer things to buy with your money. The average standard of living has to drop.

The problem being that you are attempting to demonstrate the effects of UBI, using mathematics that doesn't mention UBI.

You assume that a UBI leads to "fewer people working fewer hours", but this is one if the major points in question, so you don't get to use it as an assumption in your proof.

Your side keeps talking about reducing the burden on the workers. I'm just looking at the implications.

Without a UBI, a large fraction of the population are too busy working shit jobs for poor wages to do anything else.

Freeing up people to get educated, and to have the free time to innovate, and the safety net to take risks such as setting up new busineses, was (and remains) the major driver of those productivity increases - increased productivity leads to more free time, and more wealth, to make that free time itself generate further productivity increases.

Most of the people in the shit jobs aren't going to be innovators like you are pretending.

Innovators are a tiny percentage of the population, they'll be an even smaller percent of the ones that were working shit jobs.

A UBI would further multiply this virtuous circle, and your assumption that it would not, is unwarranted.

Fantasyland. You have to come up with some way to make a decrease look like an increase.

Economics hadn't been a zero sum game, or even close to it, since the Middle Ages.

Innovation = Fewer people working fewer hours = Higher productivity = A higher innovation to drudgery ratio + Higher real incomes for less work.

Much of this increase is a matter of capital, not removing drugery. Can't look at that unpleasant bit of reality because it defeats the eat-the-rich position.

At some point, such an innovative society gets productive enough to feed, house, and clothe everybody, even those who can't or won't work, such as the elderly, clergymen, children, aristocrats, and the unemployed.

This is NOT a bad outcome.

Productivity goes up with the ratio of capital (tools) to labor. That's the main driver.

 

[Loren Pechtel]

Economics hadn't been a zero sum game

Do you realize that a fundamental premise of my objection to UBI is that it's not a zero sum game?

Sure. That doesn't excuse Loren's assumption that it is, nor does it render his arguments supportive of your position.

We agree that economics is not zero sum; If you believe that this fact undermines my position, then you haven't understood my position.

Your failure to understand what I am arguing for isn't evidence that I am wrong.

In any point in time economics is zero sum. Over time it is not.

 

[Loren Pechtel]

Once again, you are making the fundamental mistake of thinking money has value.

Yet again, no! Money represents value, it does not have value independent from what you can do with it. Fewer people working fewer hours = lower productivity = fewer things to buy with your money. The average standard of living has to drop.

Once again you think you disagree with what I wrote but don’t actually understand it and offer up a poorly reasoned rebuttals that is inaccurate in its purported facts and irrelevant.
I know what money is and is not. Apparently more clearly than you.

No one suggested fewer people working but if that’s your real concern you should be in a huge panic about all the boomers hitting their retirement and leaving the work force.

Fewer people working fewer hours does NOT mean reduced productivity, necessarily. It means fewer people working fewer hours. Nobody discussed fewer people working.

So productivity is unrelated to productivity? Productivity is worker-hours * multiplier based on their equipment and organization.

 

[Loren Pechtel]

The issue is whether a 40% tax bite will wreck the economy. The European experience suggests it won’t. I get you think taxes woukd have to doubled because of your biases but there is no logical reason that is required.

The US currently takes in 24% of GDP as taxes. That equates to about $5T of revenue. $15K per person of UBI also equates to about $5T of cost.

If you change the tax rate to accomplish 34% of GDP - the weighted average of OECD countries, that's put revenue at $7.1T, an increase of $2.1T.

29% of current revenue is spent on Social Security and on Economic Security Programs - Let's say we can completely eliminate those if we have UBI. That 29% equates to $1.45T. That means that $3.55T is spent on things that can't reasonably be eliminated.

So at 34% GDP tax rate, you've got $7.1T of revenue, $5T of UBI costs, and $3.55T of other costs, for a shortfall of 1.45T.

What rate do we need to actually cover the $8.55T of spend? By my math, that works out to a tax rate of about 41% of GDP.

Is it technically doable? Sure. You can do it. Is it reasonable and sustainable? That's a different question. That would make us the 8th highest taxes OECD country.

How are you going to make that happen? Are you going to put that all on the highest tax bracket? There's simply not enough of them, even if you increased that bracket to 90%. And that bracket is everyone with incomes of $690K and above. That's well, well below the level of the multi-billionaires that keep being addressed.

What's your plan for how to accomplish this? How much are you going to increase corporate taxes, and how are you going to keep them from skirting those taxes given the enormous loopholes that exist? How much is going to be plugged into personal income tax, which makes up the lion's share of revenue? How much impact will it have inflation - because it's going to definitely reduce the after-tax income that people have available to spend.

And all of that is assuming that employer's don't follow bilby's advice and drop everyone's wages to offset the UBI. And it's assuming no change in the labor market, everyone continues to work and nobody decides to stay home instead.

Yes, the devil is in the details. And the details are important for implementation but not for a general discussion. Because the details are the trees in the forest of “ will it necessarily ruin the economy”.

Which is why we are focusing on the details. You are focusing on fantasy.

 

[Loren Pechtel]

The US currently takes in 24% of GDP as taxes. That equates to about $5T of revenue. $15K per person of UBI also equates to about $5T of cost.

If you change the tax rate to accomplish 34% of GDP - the weighted average of OECD countries, that's put revenue at $7.1T, an increase of $2.1T.

Hey, remember when someone said:

Economics hadn't been a zero sum game

Do you realize that a fundamental premise of my objection to UBI is that it's not a zero sum game?

When you bring in more tax, and spend that tax in any way (whether on defence and healthcare, or as payments to individual citizens), doing so changes the GDP of the nation.

As you are aware that it's not a zero sum game, can I ask why you're using an example that assumes that it is?

Taxes are an inefficiency. You are inherently increasing inefficiency with your approach, yet you dream that the output will increase.

 

[Loren Pechtel]

UNIVERSAL

… minus tax license snd dealer prep?
You have set yourself up a robust looking strawman Emily. 15k*n is an absurdity and no rational person is putting that forth as a reasonable “solution” to anything.

No, we are paying attention to inconvenient reality that makes your beautiful plans not work.

The statement was $x per person. We took the lowest reasonable level for this--poverty line. It's just under $15k/person.

 

[Loren Pechtel]

Seriously, if every single cent collected in income taxes in the US were distributed equally to every citizen... we'd each get a but under $8,000. If we seized every bit of the net worth of all the billionaires in the world and added that to the income taxes, we'd bring that up to about $15,000 per person. Which, by the way, is right at poverty level.

You start with “seriously”, then follow with a straw absurdity that nobody here is advocating.
Seriously?
Just laying claim to an acronym, but really, have the best of intentions?

Absurdity? No, this is like the Mythbusters--once they showed a scenario doesn't work they generally went back and figured out what it would take to actually get the result. That's what she's doing here--showing what it would take to get the result. Of course it's nonsense. This is a standard logic issue: If p then q. Q is wrong/impossible/nuts. Therefore, not p. She didn't bother with spelling out the !p but the reader should see it.

And note that a safe eating rate for capital is approximately 3% if you want to maintain the consumption forever in constant dollars and that should be a minimum objective. Going above that rate is eating seed corn.

 

[Loren Pechtel]

It is a myth that all, or even most, deductions are bad-idea "loopholes."

I suspect that most deductions are legitimate “good idea” loopholes, but most of the loophole dollars go to wealthy people gaming the system.

Except for the little detail that the loopholes are normally on the business side rather than the personal side. The tax code is pretty much free of improper personal deductions, the problem comes down to what counts as income in the first place. (And, yes, being self employed we do get an appreciable benefit from one of those things His Flatulence put in the tax code. He tried to make it only for businessmen and exclude self employed professionals but the backlash made him extend it to all the self employed because he certainly couldn't get rid of his payoff to his supporters.)

 

[ZiprHead]

Why Alaska’s Experience Shows Promise for Universal Basic Income

Encouraging results from Alaska’s oil royalty program point to universal basic income as a potentially viable idea, experts say.…Read More

knowledge.wharton.upenn.edu

Trials are underway within the U.S. and elsewhere to understand the effects of cash transfer programs like universal basic income to provide people with basic sustenance — where the government sends out a regular stipend to everyone regardless of income or employment status. Interest is rising following concerns that technological innovations would lead to massive unemployment as more work is automated.

Since 2017, Finland has been experimenting with a partial basic income program, a variant of universal basic income, given only to the unemployed. Alaska has had a royalty payment program since 1982 in which every resident, including children, gets $1,000 to $2,000 a year. (The U.S. state does not call it a universal basic income but it’s a similar cash transfer program.)

Finland’s basic income trial will end next year and for now the government has no plans to expand it pending results from the study. However, many in Finland reportedly did not like the idea of cash handouts without requiring work and some worried that young people would just stay home and play computer games.

“The main idea … was to see if people who are unemployed, if they would be able to keep their unemployment compensation, would they be more keen to look for work?” says Heikki Hiilamo, professor of social policy at the University of Helsinki in Finland.

But while Finland seems to have hit a roadblock, a study of Alaska’s oil royalty program shows a very different picture. “One of the concerns is … if you give people money for nothing, why should they work?” says Ioana Marinescu, a professor at the Penn School of Social Policy & Practice. “What we found was astonishing — which is that on average Alaskans work at the same rate as comparable states” such as Utah and Wyoming.

That’s because when people get extra cash, they tend to spend it, Marinescu said. Surrounding businesses, such as the neighborhood café or boutique, see increased sales as a result and then hire more employees to handle the boom. “The two put together end up seeing no effect on employment,” she said. “That’s very interesting to us to see that when this is applied on a big scale, … if a whole state would implement this, this can have interesting and important effects on the economy.”

 

[Loren Pechtel]

And what are you going to do when middle-income people start looking at their ever increasing tax bill and realize that they could stop working and maintain the same standard of living?

15k is middle income?
Guess my perspective is really warped, b’cause that looks an awful lot like abject poverty to me. Maybe “middle-income prople” are already living in a cardboard box under an overpass, so maintaining their standard of living isn’t that heavy a lift?

Try reading what she actually wrote. She isn't calling $15k middle class. She's talking about the tax bite that the middle class would have to pay to fund that $15k UBI. The tax bite won't just be on the rich because there aren't enough of them.