Sunday, April 30, 2017

Just the Basics

In other words, yes, Bill Gates will get $12,000 too but as one of the world’s wealthiest billionaires he will pay far more than $12,000 in new taxes to pay for it.
Why we should all have a basic income
While I see what the piece is getting at, I really hate it when people are glib about important topics like this. Wealth and income are not the same, and they really shouldn't be conflated, because it confuses the issue. And when you give people the idea that you will tax wealth directly to fund programs like this, it tends to drive opposition. Heck, the idea of taxing income drives enough opposition as it is.

For me, what makes me dubious about Universal Basic Income schemes is that they tend to be explained in the way that this one is - with the unstated assumption that the status quo doesn't change except for the fact that "the rich" pay vastly higher income taxes than they do now, and "poor people" get checks. Now, I'm not an economist, so I can't be certain, but I don't think that it's quite that simple. And that raises this question for me - once the government commits to creating and funding a universal basic income how does it guarantee the tax revenue to support it? For many people, the answer seems to be simple - since whatever new taxing structure goes into place has no other economic effects, hey presto! you're in business.But it strikes me as unlikely that there won't be economic ripple effects.

This isn't to say that a Universal Basic Income scheme that funds itself from income taxes is unworkable. It is to say, however, that one that assumes that it's business as usual across the whole of the rest of the economy is suspect.

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