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What's your opinion on Unconditional Basic Income? (This is not Communism)

The Basic Income movement is one that is quickly gaining ground around the world. Both prominent right and left wing persons have given their support for this idea.

What's your thoughts on Basic Income, do you think it's a good idea?

http://en.wikipedia.org/wiki/Basic_income
http://www.reddit.com/r/BasicIncome/

EDIT: I forgot to mention (in case you haven't heard) that what sprout the movement was Switzerland's proposal for basic income ($2800 monthly). http://www.reuters.com/article/2013/10/04/us-swiss-pay-idUSBRE9930O620131004


EDIT 2: This is NOT meant as a universal cure for all the problems of the world, things like education, politics, corruption and deceases are separate issues (even though Basic Income might help with them) if you wish to solve those issues please join or start a conversation about those. However discussing them with respect of BI is very fine and encouraged.

Please try to NOT sway too far from the topic, which is "What's your opinion on Unconditional Basic Income?". Comments to others opinions are of course free to go far from the topic, but preferably not too far.

And please try to be constructive and mature in your comments to others on this conversation.

Also please read AT LEAST the provided Wikipedia article on Basic income as it will answer many questions posted here.


Thank you for reading this explanation...(?)

Topics: basic income
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Closing Statement from Jimmy Strobl

Wow, thank you ALL for your contributions to this conversation!

There's no way that I'm going to be able to summarize what was said here.
But I do feel that people might be ready for this transition or at least they are able to be convinced that it is feasible.

Anyway, thank you all for your participation and sorry for the lack of response the last few days.

Showing single comment thread. View the full conversation.

  • Dec 17 2013: The principle is good, the idea is workable, but I think the time may not yet be ripe.

    For those wondering where the money would come from: 1.much-increased corporation tax, more feasible as mechanisation vastly reduces salary expenses of corporations. 2.As the positivist below me mentions, inheritance tax will be a more justifiable source under this system too. 3.A Goods and Services Tax (GST) for non-essential goods. 4.savings from a smaller government by replacing welfare, food stamps, house grants, etc and their accompanying bureaucracies. 5.Reduced crime from reduced desperation could result in massive police, prison and court savings.

    As for the disincentive to work argument, while this is undoubtedly true the demands for human labour are constantly falling due to technological innovations, and thus universal employment will never be possible. A basic income would not obliterate incentives, but just reduce them enough. Competition for high-paid jobs will remain for their superior standard of living, while wages for the drudgery, low-paid jobs will actually increase as no one will any longer need them to live.

    One doubt I actually have about the Basic Income is possible effects on inflation; anyone have an answer for me?

    I say the time is not right because 1)technology hasn't replaced enough jobs yet, and 2)it would need to be a united effort among many countries to stop mass human immigration/corporate emmigration.
    • Dec 17 2013: Corporations do not pay taxes. They just raise prices.
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        Dec 17 2013: Only because they have bought, seduced, lied to, infiltrated, manipulated and otherwise controlled government decision making.. Therefore, it is quite likely that before any real change will ever occur that control will need to be taken back by those governed.

        In other words real grassroots democracy that serves the needs and interests of the people being governed may well need to be implemented first in order to wrest control from the hands of the arrogant and the self-righteous corporate plunderers.

        Of course change never happens in a vacuum and our institutions will always need to keep pace with societal changes and, again, Direct Democracy appears to offer those governed a very good chance to finally implement a real and effective democracy. One whereby the people are able to direct, control and even redefine their institutions of governance.

        However, unlike those who decry a UBI with god like pronouncements, no one has any definitive answers to how these changes will unfold. . But as Emmet points out in his reply there is much more that yet needs to done to ensure a healthy transition for ideas such as a UBI and Direct Democracy to take root and flourish.

        Thanks to forums like TED those ideas are being planted and the number of supportive responses to this thread shows strong and nourishing support for such changes. Blessings to all those who are able to envision a better future for us all. My condolences to those whose vision has been co-opted by the status quo.
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          Dec 17 2013: The enthusiasm expressed here, while laudable, should, in my view be somewhat tempered. Direct Democracy is a concept that sounds wonderful, until you actually see it in action. All manner of horrors, from lynchings to “reigns of terror” can result from democracy that is, well, too direct.

          The Framers of the American system of government realized this and instituted a structure of checks and balances—including a bicameral representative democracy—while inefficient, reduces the likelihood of oppressive behavior by a majority. Minorities come in many stripes—race, gender, sexual orientation, ethnicity, religious preference—and a Direct Democracy would be toxic for any and all of these.

          Before we ever entertain the notion of Direct Democracy and hand over every decision directly to the polity in this country, let’s at least find out if they understand the issues, including even knowing what a democracy is!
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        Dec 18 2013: That may be the case, but a carrot and stick approach might be employed to “incentivize” corporations to, at the very least, return profits (or a significant portion thereof) to the shareholders—which, as you know, covers many millions of retirement accounts—in lieu of taxation, and to utilize “punitive” measures that would prohibit the “passing on” of “post-production” costs to the public. In other words, there is a “real cost” to provide a product or service to the public, and then we have the amount of profit which is added to this cost, and is based, almost entirely, on supply and demand—in other words, what the market will bear.

        It is this “what the market will bear” element where the tension may be found—the very crux of the dilemma. Why is it, for instance, that a survey of Chinese and American merchants and consumers on the ethics of “price gouging” during natural disasters elicits completely different responses? We have a choice, which probably lies somewhere between becoming a Ferengi culture and absolute altruism. The question is, which path offers the most rewards, not in financial terms only, but in terms of the fabric and character of a society, and that of the individual?
    • Dec 17 2013: Bryan is right. Only individuals (ultimately) pay taxes and taxing corporations heavily is bad for business. Savings from more efficient governance and more efficient societies are always welcome, but cannot replace taxes. Inheritance tax is inefficient too - you have only one chance to tax per lifetime while the person has one lifetime to think about how to avoid it! GST (or VAT in EU) is roughly the same as corporation taxes, so they are bad for business too after a certain level. (still you can raise up to 30-35% of GDP with the above taxes with no problem)

      There are only two viable choices (if you really need more than 35% - you need about 50% tax on GDP for an effective UBI of 50% the per capita GDP, that's about 50% more than the poverty line): 1) combined personal wealth and income tax, reaching even 100% after a max level (that will limit the corruption that excess power from excess money brings), that will drive out many wealthy people from the country but not their businesses/investment or their tourist/exports consumption. 2) At the source: combined currency transaction taxes and currency savings taxes through low inflation (for counterbalance). You do need to place some limits/penalties on mega-corporation sizes for this to work properly though. 3) Long-term: supporting UN to create an army to impose worldwide taxation and arrest and imprison people fleeing taxation as a crime against humanity. 4) There is no 4!

      As for the possible effects on inflation, there are non: you are just transferring money from one group to another. This doesn't have any effect on the inflation.

      Btw, technology never replaces jobs, it just changes them. The only way to reduce jobs in the long term is to find a limit to the human desire!
      • Dec 18 2013: I understand your point and agree in part, but I think an increase in corp tax is necessary to reflect the costs savings technology affords them - advertising costs have been reduced by the internet, cheaper production processes, reduced manpower requirements. I accept other expenses have risen but profits have nonetheless been increased while taxes have not reflected this. Business costs are only going to reduce in the future - think cheaper solar power, self-driving cars, automated supermarket checkouts. Unless taxes rise too, there will just be greater unemployment and greater profits.

        As for technology replacing jobs, it will eliminate a lot of blue-collar jobs - a good talk on this is http://www.ted.com/talks/andrew_mcafee_what_will_future_jobs_look_like.html . Self-driving cars could for example, almost entirely replace the taxi industry. I know that this won't replace the human will to work. But a UBI will reduce the need to work, and so some will turn their backs on work while others will turn to creative disciplines.

        I'm certainly no expert on inflation, but not only printing new money causes inflation. As lower-income groups gain access to greater funds, essential goods, rent and some discretionary items will surely increase in price as they become universally affordable and thus in greater demand?
        • Dec 18 2013: Corp tax exist only as a countermeasure to tax avoidance by individuals. Nothing else. It's not a matter of opinion. It's a fact. All wealth and income is ultimately owned by people and all taxes are ultimately paid by people. Also, more taxes on corporations do not increase employment by themselves, they decrease it. That's also a fact, so you have to exercise caution on Corp taxes. About 10-20% is the norm. Same goes for GST/VAT.

          UBI does reduce the need to work for people content to live in poverty, because it makes poverty more bearable. However, it also gives opportunities to pursue education, training and high productivity work fuelled by ambition and not need, and it also urges people to replace low productivity work with machines. That's also a fact and it's not a bad thing.

          Three things cause inflation: lowering productivity, printing new money and increasing the velocity of money (aka prospensity to consumption rather than investment - bare in mind however that consumption of essential goods is debatable whether it is effectively consumption or investment in human capital, thus increasing productivity). So redistributing money does not cause inflation, because as one group of people affords new things another group loses access to some other things. Ultimately we will produce more food and clothing to cover the higher demand and less luxury goods to respond to the lower demand. Prices will stay the same. No inflation. Not a bad thing too.
      • Dec 19 2013: Yes all taxes are ultimately paid by individuals. I never claimed otherwise. Corp tax is a method of redistributing wealth/profits before it reaches the individuals. Nor would (nor did) I claim that corp taxes increase employment. I said increases in corp taxes will be necessary to redistribute/spread wealth in a society where fewer people are employed.

        The current proposal in Switzerland is an income of $2800 per month; that hardly constitutes living in poverty. It's enough for a basic but entirely decent standard of living. I agree that it offers increased opportunities and personal productivity.

        Thanks for the inflation info.
        • Dec 19 2013: Bare in mind that the $2800 (nominal) translates in the US at about $1600 (PPP) which is actually very reasonable for a UBI that replaces the welfare state (pension, education, healthcare) and very doable with a total tax rate of about 45-50% of GDP.

          I insisted on the corp tax so much because if you increase personal tax you may lose wealthy people, but if you increase corp tax you may lose big investments, which is something that you can't allow unless you can coordinate for a worldwide tax. Also you can't ensure that taxes will not be regressive on individuals when you tax corporations, that is that they won't pass to consumers and low level employees, effectively negating your redistribution efforts. I like the way you handled my abruptness though! ;)
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      • Dec 19 2013: Hi Mike,

        The problem with your response is that you are viewing the UBI in a vacuum, through the lens of society today as it operates without a UBI. I said above that I think that some necessary conditions for UBI are not yet in place; when they are, I believe UBI will work.
        Corporations tax-dodging will not be allowed to go on at the current level forever. Decreased operating costs by corps employing increasingly fewer people will lead to proceeds from sales being increasingly concentrated in the larger companies, to the detriment of wider society. To get at these profits higher, progressive corp taxes will be introduced.
        In a society with a UBI and less full-time paid employment, corps cannot simply pass these taxes onto consumers. For corps looking to maintain mass market appeal, they will not set a price that is unaffordable for large groups of the market depending on UBI as their primary source of income. So they will have to absorb a lot of these tax hikes themselves.

        The rest of what you say… I would have slightly more faith in my (Irish) gov than the US one, although mine are certainly not the most competent of chaps. But I was merely seeking to illustrate from whence a UBI could be funded, rather than championing the responsibility of governments.
      • Dec 19 2013: I'm sorry but I'm not sure that I understand your comment:
        "If a corporation can not pass on these expenses, and doesn't make profits, it will go out of business."
        Paying corporation tax in no way means a business will not make a profit, it means it will make a marginally smaller profit. How exactly can corp tax force a corporation out of business? By definition only those corps making a profit will pay it. This is fact. Similarly, an employee's wages will be taxed; he will have paid income tax but will still have profited from his work with his net pay.
        Perhaps there was a miscommunication, but you seem to have jumped from a corp paying its taxes to it not making a profit.

        As for the 'taking of wealth', both our countries' welfare systems are paid out of taxation, so the UBI is nothing new in this regard, and is in fact even more justifiable as everyone is eligible for it. I would defend it on the grounds that it seeks to level the playing field, as everyone is not born economically equal.
        I agree governments are poor managers of our economies, but society cannot function without them.
        • Dec 21 2013: I do like the idea of progressive, corp taxes but still corp taxes are very ineffective above a certain threshold. First you need to decide what to tax: Is it retail sales (GST), is it value added (VAT), is it net income to equity investors, is it income to all investors (equity and debt)? Is it the value of the "limited liability" that the law offers freely to corporations? Then you must identify who you actually/effectively tax: is it shareholders (equity - wealthy/poor), is it investors (equity and debt -wealthy/poor), or is it stakeholders (labor - high/low level, consumers - essential/luxury goods)? You need to keep in mind that the only difference between taxing individuals and corporations is that in the latter case you are not sure which individuals you are taxing. Nothing else. And you mostly apply them as a very inefficient method to partially combat individuals' tax evasion (tax heavens / outsourcing). But more than 5-10% of GDP is harmful to the economy.
          Other (semi-)"agnostic taxes" (taxes that don't take into account individuals' circumstances) could be more effective and targeted better towards wealth & income owners: You could tax non-human resources used (land tax, eco tax, aka Georgian & Pigouvian taxes), currency savings (inflation "tax") and/or currency transactions (APT tax) or public goods access (tolls) or illegal behaviour (fines). That could comprise another 5-10% of GDP to complement corp taxes.
          But personal taxes (ie. individual's net wealth & net income), is the only way to target the right people for redistributive purposes, at about 30-35% of GDP to really hope for a progressive taxation system and a UBI that makes sense.

          If the rich don't flee your country running away from your tax system, you are doing something wrong. If the rich flee your country running away from your tax system but take their investments along with them, then you are still doing something wrong. That should be the measure.

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