> worked for black money and collect the social benefit at the same time
This one doesn't apply to BI, since you get the same amount of BI money whether you work or not and regardless of how much you earn.
This one doesn't apply to BI, since you get the same amount of BI money whether you work or not and regardless of how much you earn.
I assume it is funded through taxes and that people that earn more income will pay higher taxes. So once you take BI received - taxes paid, people that earn more outside income get less from the BI program than those that don't. And we are back in the same situation where a welfare program creates disincentives for work.
So your first $10k (from BI) would be tax free. If you don't work, you don't pay any taxes.
Let's say you have a part-time job which pays $20k a year and the lowest marginal tax rate is 30%. You'd then pay $6k in taxes on that $20k.
Thus, your overall income would be $24k, much more than you got from just BI. This works if your only work is a single $100 lawn mowing job. BI, when coupled with an adequate standard deduction, eliminates disincentives to work.
Such a system looks a lot like the systems which are currently used in the Netherlands and Scandinavia. True, there are some differences: BI is called 'unemployment benefit' for those who don't work. And for those with a low income, there is no BI, but instead there are subsidies on housing, health insurance etc.
The personal standard deduction is not "income tax"—it's the opposite of a tax. It's the amount of your income which is not taxed.
This system wouldn't even necessarily require progressive taxation (though I would favor it). A flat tax rate of even 40% could be more than enough to provide for BI and everything else (and everyone would receive their BI tax-free).
It's very different from unemployment insurance because unemployment disappears once you start working. So there's no incentive to take on jobs which pay less than unemployment, or even to take on jobs which pay less than (unemployment + opportunity cost of working).
It might be helpful to do some research on how taxes (particularly deductions and marginal rates) actually work.
If you fund a UBI program by, say, eliminating preferential rates for capital income, and adding supplemental brackets above the current maximum brackets, and tie the level of the UBI to (because the former actually simplifies reporting in a way which prevents doing this exactly rather than by estimates) an estimate of the revenue resulting from those changes, there's no actual disincentive to work compared to the status quo ante due to the UBI except for very high income workers(this isn't no additional disincentive compared to those in other welfare programs from the UBI, its no disincentive at all.)
There's a disincentive compared to the status quo ante to generating income from long-term capital gains, but the practical effect of that is probably only in the upper end of the distribution (in the lower and middle ranges, the relative comparative disincentive to earning that form of income is probably more than offset by the having more surplus income to invest.)
Typical proposed implementations just increase taxes at higher income levels. So there is a taper starting somewhere above the basic income where people that are working are benefiting less than people who aren't working, and there is some income level where the basic income is effectively a pure cost. But all those people have a higher effective income than they would have from the BI.
And it likely would represent a massive increase in spending for most countries, even if it was more efficient than welfare programs. Especially if you make payments outside the tax code, which ends up with a lot of spending that is just accounting.
Doesn't this mean that BI will be even more expensive?
There is absolutely no associated "cost" of the program, and there is demonstrable evidence that the poorer you are, the more efficient your dollar is at stimulating growth, because you are much more likely to have real goods demand rather than capital growth demand like the rich, where inevitably the money for a UBI comes from.
Everything a government does has some rate of ROI on it, determining how much it impacts the economy and how well the dollars are spent. Infrastructure and education are known force multipliers where every dollar spent produces many times more economic growth in return, making almost any infrastructure or education worth it until you get particularly exploitative. Likewise, having a good healthcare system compared to the American one would produce significant returns in quality of life, and economic factors like time working and it would cost less to use more preventative medicine to mitigate problems before they are life threatening catastrophes that cost the state millions.
In the same vein of thinking, healthcare is certainly a net positive investment. You spend a ton on it, but the alternative is people getting sick and dying and lost potential productivity from that outweighs the money you spend preventing it. In the same way, if UBI prevents social unrest, crime, violence, despondence, and death, then it also likely offsets the money going in and then some as well, despite possible overhead, since unlike healthcare / infrastructure / etc money going in does not take years to get a return on - the people who get it predominantly will turn around and spend it immediately on goods and services to keep your consumerism strong.
UBI, by its design, creates incredible demand for a standard of living equal to it. Even if your margins are razor thin, the market is still very desirable because the revenue is some of the most reliable money there is (government money) and it is insanely consistent (people will need housing at the minimum level).
Which should terrify you. Any shift in real market demand for necessities post-UBI just represents how many people were impoverished without it, who did not have their base needs fulfilled and how much human rather than fiscal demand for needs was going unmet. The kind of progressive taxes necessary to redistribute so much money on so regular a basis would of course be significant for the higher earners, which would of course significantly curtail their economic influence, because while innovation is not zero sum, the annual allocation of finite resources is distributed in accordance with capital allocation to it - and that of course includes the spending habits of the poor.
It is a simple reality of markets that the more money you have the louder your demands are heard. So if you take from the rich and give to the poor, their relative voices change, but everyone grows together insofar as progress is always being made somewhere.
But that would happen anyway. If you are taxing the ultra-rich period, at almost any % of income, there are strong incentives when the taxable total is in the millions or billions to evade taxes.
It still happens, but I doubt a BI would significantly impact this one way or the other. Right now, people in the bottom percentiles of pay get most or all of their taxes refunded, but still like to have under the table jobs to maximize what they take home every payday, and under BI, they would still likely remain unaffected by tax increases. The middle class would likely be affected, but they tend to work jobs that aren't as easy to do for unreported cash, and have more to lose from an audit if they get caught, so its still safer to work legally. The richest would naturally get the highest absolute burden, but they are likely already doing all they can to avoid taxes, since they can have a lot of effort put into it relative to the potential gains, so I don't see a huge migration to illegal undeclared income there, either.