Comment by michaelt | Hacker News Reader

Comment by michaelt | Hacker News Reader

> according to Widerquist, the $2-3 trillion projections are just bad math. These simplistic calculations involve multiplying the number of people in America (roughly 330 million) by the average UBI output (approximately $10-12k). While they accurately assess the amount of money that would be involved in such a system, they aren’t accounting for the fact that most of that money will be exchanged via the tax system (many people will pay into it, but they will also get that money back, effectively nullifying the need to generate “new” revenue), meaning that the total amount of new revenue that the government actually needs to generate is only about $539 billion, or roughly 3 percent of GDP.

I don't get it.

I think the idea is something like this:

UBI replaces the standard deduction, or something like that. Everyone pays tax, at either flat or progressive rates, but with the base tax on $0 income being -$10,000/person.

So if you hypothetically imagine a 20% flat tax (not a realistic number!), then once you're making $50,000 a year, you're breaking even. At that point, UBI is nominally costing the government $10,000/American/year, but most of that is an accounting fiction--it's just equivalent to not taxing that person as much as you would've in an alternate scenario.

Now, I don't know how this works for Wilderquist's example, since I doubt that simulation has UBI replacing all other taxes/deductions.

If you are now earning enough/lot, you get UBI, but it is all taxed away anyway. So in the end high income people will not gain anything net.

On other side basically nearly all of UBI will be spend, thus generate economic activity and come back in taxes in various ways such as sale or income or corporate.

> On other side basically nearly all of UBI will be spend, thus generate economic activity and come back in taxes in various ways such as sale or income or corporate.

By that rationale, can the government hire $2-3 trillion of teachers, cops and college professors for only $539 billion?

Reply on news.ycombinator.com