Universal basic income

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Mori Chu
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Universal basic income

Post by Mori Chu »

Seeing articles lately about various countries and areas doing trials of a "Universal Basic Income," basically giving free money to everyone in the region to help them survive. What do y'all think of such an idea? I'm a progressive dude, but I'm not sure where all the money comes from to afford such a thing en masse.

http://www.independent.co.uk/news/world ... 61191.html

http://www.swissinfo.ch/eng/results-vot ... d/42153620

http://www.wsj.com/articles/a-guarantee ... 1464969586

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Cap
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Re: Universal basic income

Post by Cap »

I'm not really interested in what the average Joe on the street thinks of the idea. I'm interested in what qualified economists think of the idea. Unless there's a solid expert consensus that it's a good idea, I say stay away from it.

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Nodack
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Re: Universal basic income

Post by Nodack »

I think world has had to deal with trying to keep the masses happy and for a long time. If the poor get too poor and desperate you get riots and revolutions. Countries have tried all kinds of different styles, Democracy, Communism, etc. Manual labor needs have diminished with technology replacing humans and yet we keep making more humans.

You have people that care and wonder how can we make everybody happy and healthy and then there are those who say F everybody else, I'm in it for myself and don't give a rats ass about those less fortunate than me. I'm not giving other people my money so they can sit around and watch TV all day on my dime.

Like always I'm in the middle. I don't want to pay people to sit around on my dime and yet, I know as a society we need to think about the big picture and we don't. We have people that need jobs. We have a crumbling infrastructure and nobody wants to pay to fix it. Seems like we could find a way to put people to work right there. That's only one piece and it doesn't solve the big picture.

The big picture is more people, less jobs. People without jobs get hungry and desperate and do desperate things to survive. We as a society need to figure out how to keep our citizens educated and employed. It's difficult because there is government and then there is business. The two don't always work together as a team. They fight. The government is trying to satisfy the needs of the people by taxing businesses. Business is trying to satisfy share holders and the big picture for the country isnt part of their business plan. Then you have Communism who combines business and government with their own mixed results.

I don't have the answers. I don't think we as a country/world are that concerned with the big picture. We are concerned with Hillary's emails and fighting each other over stupid stuff.

We evolve as people. We always have. The process is painful.

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Flagrant Fowl
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Re: Universal basic income

Post by Flagrant Fowl »

I believe it will become necessary as computers and machines continue to become more advanced and replace human laborers.
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AmareIsGod
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Re: Universal basic income

Post by AmareIsGod »

Flagrant Fowl wrote:I believe it will become necessary as computers and machines continue to become more advanced and replace human laborers.
+1
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OE32
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Re: Universal basic income

Post by OE32 »

I think a better idea would be to dramatically reduce the minimum wage and dramatically increase the earned income tax credit - i mean, quadruple it. Increase tax rates up the board. Lose the AMT. Get rid of accelerated depreciation. Eliminate the home mortgage interest deduction. Understand that your economy's about to heat up, so prepare the Fed to raise rates quickly.

There are other things I'd recommend - lose section 1014, maybe a paid dividends deduction for corporations (that gets tricky). But the gist of the above paragraph is making it more economically beneficial to invest in employment rather than property.

Politicians talk about vague "loopholes", but they never want to admit the conceptual difficulties inherent in an income tax. For instance - say I see a panhandler playing a harmonica. I throw him a dollar. Is that income to the panhandler? He was performing a "service" after all. Is it charity? Is it a gift? The tax consequences of the three options are all different - and we're just talking about giving a panhandler a dollar! You start going into the emotional and psychological aspects to figure it out, but then you realize you're writing standardized rules for governing a country. What if I buy a box of basketball cards for $60. I get a card worth $50 in the pack - the rest are useless. I decide to sell it. Do I have income? I paid $60 for the box, so it would seem I've lost money. But the card was just one in the box, and it came from just one of the packs. What is my basis in the card? What is my basis in the other cards?

There are ways out of these, but note how simple and common these hypotheticals are. You can't imagine how complicated it gets when you're talking about complex business arrangements - and rules need to be written for all of that complexity.

THE BIGGEST issue with an income tax is something most people don't often think about, and certainly something no politician talks about - realization. The year Buffet paid less than his secretary in taxes, people don't realize that, in effect, he actually paid something like 0.0003% tax that year - not 11%. That's because he didn't sell his stocks. They went up in value, he got richer, but there was no tax, because he did not sell them. This is called the realization requirement.

You need the realization requirement because think of this - dude catches a Sammy Sosa homerun baseball worth $1 million. He's rich! So should we tax him on the $1 million? Well that's unfair because what if he wants to keep his baseball? If you tax him, you force him to sell it to pay the tax. So you wait til he sells it. We do the same thing with stocks, machinery, real estate, treasure chests full of gold, you name it. What if he never sells it? Well then it's probably never going to be taxed under our current code. Why? Section 1014.

The smartest thing for the dude to do is borrow against the value of the baseball - say $500,000. No tax on that. Spend the money, you get a good rate of credit because it's fully secured by the baseball. Then when he dies, section 1014 causes the basis of the baseball to be "stepped up" to its fair market value. Say it's increased in value to $1.5 million. Kids sell the baseball, pay off the $500,000 loan, and keep the difference. No tax, because the basis was stepped up to fair market value. Voila! This is what you do when you're rich.

The realization requirement is the biggest loophole there is, but it's central to the income tax. If we really wanted a more equitable system, we would develop rules to cause gains to be automatically realized in various situations.

All this is to say - there are ways to fix this thing, but then you remember that half of the country is screaming about a flat tax, while never realizing that... psst... the rich won't pay that either... they'll take 0%, please and thank you.

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Indy
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Re: Universal basic income

Post by Indy »

All this is to say - there are ways to fix this thing, but then you remember that half of the country is screaming about a flat tax, while never realizing that... psst... the rich won't pay that either... they'll take 0%, please and thank you.
I am not sure there are ways to "fix" it if the people controlling the law makers are the richest people in the US.

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