Eh, I don’t really agree with you on the definitional point—I understand it, and I don’t think it’s invalid, but I don’t really think it’s responding well to what UBI proponents usually mean when they talk about it being universal.
In response to your other comment, I already said that you could tinker with negative income credits to alleviate the concerns related to means-testing and perverse incentives. I’m not trying to argue with you or convince you that UBI is better or anything like that, just trying to provide one common argument as to why UBI proponents argue that basic income should be disbursed universally instead of the initial payment being dependent on or tempered by income or wealth levels.
I don’t really think it’s responding well to what UBI proponents usually mean when they talk about it being universal.
I would be open to this response, but in every conversation that I can recall having with someone who advocates for a UBI (including other people in this comment section), this has been wrong, at least initially: they start out by describing it as a series of payments to all people, regardless of income/etc. This is also true for popular proponents of UBI programs, like Andrew Yang. And usually people justify it by saying things like what you said in your own comment, about “oh, well if it isn’t given to rich people then it’ll disincentivize them from working, because then they’ll hit the cutoff and lose all the benefits.”
But of course, once someone highlights how this is almost strictly inferior to a more nuanced system (e.g., special negative income taxes), some proponents will just start retreating to a vague definition of UBIs which water down the whole concept and abandon a lot of the arguments they were just making in favor of it.
Now, I’ll admit I didn’t see the original point about temporary positions and pay periods. I don’t think I’ve heard people make this point before, but it’s still unclear to me what it actually looks like in practice (e.g., “what if you get a job which pays $10K a month, but then lose the job on the first week and are thus ineligible for benefits that month”?)… Given the lack of clarity, and what I’ve been able to imagine on my own, I don’t find this very compelling, as it seems to refer to a rather rare scenario where people may just have to manage the risks and/or deal with special bureaucracy despite it being inconvenient. The fact is, I can’t imagine how this could be significant enough to overcome 10s or 100s of billions of dollars in cost savings by restricting payments to people who are already making decent incomes. However, if someone were to clarify the argument, I would be willing to consider it further.
Re: universality: there are a lot of different UBI proposals, and a lot of things that are proposed as a “UBI” that i don’t think enter into that definition, so I really can’t speak to the UBI proponents you’ve been talking to, and I’m not familiar with Yang’s proposals. I’m mostly familiar with academic works on basic income, and my understanding is that the most common definition of the universal component of UBI is that everyone gets a certain amount of money every so often, regardless of their income, tax bracket, in some cases citizenship status, etc. Some of these proposals argue that it should be tax exempt completely, while some say that it can be included in the total calculated for income taxes. In either case, it is still universal. I personally think arguing that a UBI where some people pay back part of it in taxes isn’t really universal because of that, which is how I understand your argument on that point, is akin to arguing that, for example, you get paid less than your colleague because you have a second stream of income that puts you in a higher tax bracket and results in you paying a higher tax percentage on your salary, despite both of you getting the same amount of pay before taxes. Again, I can’t speak to anyone you’ve spoken to, and I’m not trying to convince you of anything, but this is my understanding of the way universal is meant to function.
The thing I was talking about is known as a welfare trap, or an unemployment trap. This all depends on context and can vary wildly, but in a lot of welfare systems benefits—particularly cash benefits—are tied to fairly low thresholds, and depending on how your income/tax system functions, can be recalculated on different time scales. Where I’m from, last I checked, a number of poverty alleviation programs like food support and income support are tied to a level of household income that is something around a third of the monthly minimum wage per person (I’m a bit fuzzy on the exact number, but it’s definitely less than minimum wage and very far below the poverty line) in the household. We have a very centralized social security and taxation system where your income is reported by your employer every month, and taxed before you receive it -so unless you’re working freelance (which requires you to set up a tax entity and report income ~every three months) or illegally under the table, your income is reported to the government and entered into the central system which is used for means testing every month once you get any job. Once you get a job that moves you above the threshold, if you then lose the job, reapplying for and receiving benefits can take months. They’ll pay you a lump sum for the time between your application and actual disbursements, so you don’t end up not receiving what you’re entitled to, but those months in between can be without any payment at all. So taking a job, particularly in job markets where employment security isn’t great, is a serious risk for a lot of people who are low income enough to be receiving these benefits, which are almost certainly lost if you take any job because the cut off threshold is so low. This isn’t really as rare a scenario as you might think, and you can look it up if you’re interested in knowing more -there are a lot of papers studying this in detail in a lot of different places, and it’s been a while since I looked into it so my knowledge is a bit rusty.
In regards tax credits that are payed out on a yearly or quarterly basis, if they are disbursed retroactively, then someone who had a good 2021 fiscal year and a bad 2022 fiscal year, for example, may not have access to funds to bridge the gap until they receive their disbursement, and if its projected than thats a wholeother issue—again, I think that this should be easy to tinker with and make it not be a problem, and what exactly it would look like depends entirely on your tax system and tax credit system proposal.
Similarly, there’s a lot you can do even in a means tested system to try and remove the welfare trap—UBI proponents are just suggesting we solve the problem at the bud. I understand that you sent find it compelling—yeah, I do agree that the savings are not considerable, but if I were to argue that we should have UBI (I’m personally a proponent of universal basic services and don’t think any proposed UBI should function as a replacement for welfare services, but that’s a whole other topic) it would not be from a cost saving perspective. In regards to unemployment traps in particular, I think the universal aspect is important not because of savings but because it prevents people from falling through the cracks, and it’s totally understandable if you have a different perspective on that ot that find it valuable. Again, I’m not trying to convince you or even make you consider anything, I’m just trying to answer what I perceived to be an open question about the arguments for universality with one that I think is interesting enough to merit attention.
Eh, I don’t really agree with you on the definitional point—I understand it, and I don’t think it’s invalid, but I don’t really think it’s responding well to what UBI proponents usually mean when they talk about it being universal.
In response to your other comment, I already said that you could tinker with negative income credits to alleviate the concerns related to means-testing and perverse incentives. I’m not trying to argue with you or convince you that UBI is better or anything like that, just trying to provide one common argument as to why UBI proponents argue that basic income should be disbursed universally instead of the initial payment being dependent on or tempered by income or wealth levels.
I would be open to this response, but in every conversation that I can recall having with someone who advocates for a UBI (including other people in this comment section), this has been wrong, at least initially: they start out by describing it as a series of payments to all people, regardless of income/etc. This is also true for popular proponents of UBI programs, like Andrew Yang. And usually people justify it by saying things like what you said in your own comment, about “oh, well if it isn’t given to rich people then it’ll disincentivize them from working, because then they’ll hit the cutoff and lose all the benefits.”
But of course, once someone highlights how this is almost strictly inferior to a more nuanced system (e.g., special negative income taxes), some proponents will just start retreating to a vague definition of UBIs which water down the whole concept and abandon a lot of the arguments they were just making in favor of it.
Now, I’ll admit I didn’t see the original point about temporary positions and pay periods. I don’t think I’ve heard people make this point before, but it’s still unclear to me what it actually looks like in practice (e.g., “what if you get a job which pays $10K a month, but then lose the job on the first week and are thus ineligible for benefits that month”?)… Given the lack of clarity, and what I’ve been able to imagine on my own, I don’t find this very compelling, as it seems to refer to a rather rare scenario where people may just have to manage the risks and/or deal with special bureaucracy despite it being inconvenient. The fact is, I can’t imagine how this could be significant enough to overcome 10s or 100s of billions of dollars in cost savings by restricting payments to people who are already making decent incomes. However, if someone were to clarify the argument, I would be willing to consider it further.
Re: universality: there are a lot of different UBI proposals, and a lot of things that are proposed as a “UBI” that i don’t think enter into that definition, so I really can’t speak to the UBI proponents you’ve been talking to, and I’m not familiar with Yang’s proposals. I’m mostly familiar with academic works on basic income, and my understanding is that the most common definition of the universal component of UBI is that everyone gets a certain amount of money every so often, regardless of their income, tax bracket, in some cases citizenship status, etc. Some of these proposals argue that it should be tax exempt completely, while some say that it can be included in the total calculated for income taxes. In either case, it is still universal. I personally think arguing that a UBI where some people pay back part of it in taxes isn’t really universal because of that, which is how I understand your argument on that point, is akin to arguing that, for example, you get paid less than your colleague because you have a second stream of income that puts you in a higher tax bracket and results in you paying a higher tax percentage on your salary, despite both of you getting the same amount of pay before taxes. Again, I can’t speak to anyone you’ve spoken to, and I’m not trying to convince you of anything, but this is my understanding of the way universal is meant to function.
The thing I was talking about is known as a welfare trap, or an unemployment trap. This all depends on context and can vary wildly, but in a lot of welfare systems benefits—particularly cash benefits—are tied to fairly low thresholds, and depending on how your income/tax system functions, can be recalculated on different time scales. Where I’m from, last I checked, a number of poverty alleviation programs like food support and income support are tied to a level of household income that is something around a third of the monthly minimum wage per person (I’m a bit fuzzy on the exact number, but it’s definitely less than minimum wage and very far below the poverty line) in the household. We have a very centralized social security and taxation system where your income is reported by your employer every month, and taxed before you receive it -so unless you’re working freelance (which requires you to set up a tax entity and report income ~every three months) or illegally under the table, your income is reported to the government and entered into the central system which is used for means testing every month once you get any job. Once you get a job that moves you above the threshold, if you then lose the job, reapplying for and receiving benefits can take months. They’ll pay you a lump sum for the time between your application and actual disbursements, so you don’t end up not receiving what you’re entitled to, but those months in between can be without any payment at all. So taking a job, particularly in job markets where employment security isn’t great, is a serious risk for a lot of people who are low income enough to be receiving these benefits, which are almost certainly lost if you take any job because the cut off threshold is so low. This isn’t really as rare a scenario as you might think, and you can look it up if you’re interested in knowing more -there are a lot of papers studying this in detail in a lot of different places, and it’s been a while since I looked into it so my knowledge is a bit rusty.
In regards tax credits that are payed out on a yearly or quarterly basis, if they are disbursed retroactively, then someone who had a good 2021 fiscal year and a bad 2022 fiscal year, for example, may not have access to funds to bridge the gap until they receive their disbursement, and if its projected than thats a wholeother issue—again, I think that this should be easy to tinker with and make it not be a problem, and what exactly it would look like depends entirely on your tax system and tax credit system proposal.
Similarly, there’s a lot you can do even in a means tested system to try and remove the welfare trap—UBI proponents are just suggesting we solve the problem at the bud. I understand that you sent find it compelling—yeah, I do agree that the savings are not considerable, but if I were to argue that we should have UBI (I’m personally a proponent of universal basic services and don’t think any proposed UBI should function as a replacement for welfare services, but that’s a whole other topic) it would not be from a cost saving perspective. In regards to unemployment traps in particular, I think the universal aspect is important not because of savings but because it prevents people from falling through the cracks, and it’s totally understandable if you have a different perspective on that ot that find it valuable. Again, I’m not trying to convince you or even make you consider anything, I’m just trying to answer what I perceived to be an open question about the arguments for universality with one that I think is interesting enough to merit attention.