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Comment by IanDrake | Hacker News Reader

I’m not sure why you’re doing mental gymnastics on this one. There is a simple answer.

300,000,000 - US population

$12,000 - Your UBI amount

Total cost: 3.6 trillion dollars.

Projected US tax collection for 2019: 3.4 trillion. That’s not the US budget, just the amount not borrowed to pay for the budget.

Cost of social programs that UBI would replace (in theory): 2.3 trillion. (SS, Medicare, other). I don’t think UBI could replace SS though.

So you need to increase tax revenues about 33% if you look at it in the most favorable way.

Then, when the bottom falls out for those who needed the full benifit of the programs you replaced, you will either bring those programs back or increase the UBI payment for everyone, which is easy to do because we’d just vote ourselves more money, because money is free.

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> There is a simple answer.

Only if you want to count the dollar you pay but not the dollar you get back in order to claim that it's too expensive.

It ignores all of the misleading accounting that occurs in the existing system and wouldn't be there anymore.

Suppose we used to provide $1000/year value in assistance with a 10% phase out rate and then we had a 15% tax rate up to $10,000 and 25% thereafter. We switch that to $1000/year in unconditional assistance with no phase out and pay for it by changing to a flat 25% tax rate. If your accounting method is telling you that this change has caused everyone who makes more than $10,000/year to have to pay an extra $1000/year in taxes, you've missed a term. Neither the marginal nor effective tax rates have changed for anyone.

This is why many economists prefer the "negative income tax" formulation of a UBI where the UBI is a tax credit and it's possible for low income people to pay a negative amount in taxes.

I suppose we’re starting with two different assumptions.

My assumption is UBI is tax free OR UBI is taxable income but the first $12,000 of income is tax free. Same difference, different language.

Your assumption would be that UBI is taxible...like SS is now. That’s a garbage policy.

If I recall, Rand Paul’s tax plan was that a person filing singly would not be taxed on their first 40K of income. Just about double that for filing jointly. Then there’s a 16% flat tax, no deductions. I personally liked that plan.

> Your assumption would be that UBI is taxible...like SS is now.

Not at all. What I'm saying is that the additional tax to fund the universality of the UBI would go in approximately the same place as the phase outs go for existing benefits, and they cancel out.

The advantage of putting the phase out on the tax side is that it's easier to see what's happening, so you don't accidentally create one income range where the marginal tax rate is 10% and an adjacent one where it's 110% because five independent programs all phase out at the same income level. Or impose higher marginal rates on lower income people than higher income people.

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