First, just ignore the whole thing about TANF; I included that on a whim and I’m aware of the many criticisms of the program, but I have no interest in defending it as it is not central to the main argument I’m making. That aside...
You say that:
The fundamental issue (unless I’m misunderstanding) with tax-credit is that if you’re poor and have not made a high income, you can’t get any benefit from them.
I suppose I should not have used the term “tax credit,” as I think most tax credits are non-refundable, but there are refundable tax credits (i.e., you can be paid by the government in excess of what you owe in taxes). What I have in mind would be a refundable tax credit, which also applies for people who do not pay excess amounts in income taxes. (i.e., it would be like receiving a $X check if you have not paid any taxes)
You say that:
UBI is a government policy that distributes funds to all people equally, through redistributive taxes that are high enough for the wealthy to pay for the full amount.
Curiously, in a separate comment you also say:
I don’t think the ‘Universality’ of UBI has ever meant that every person will benefit from it. The universality thing points to the fact that no-one will ever go below it.
I’m not exactly sure how to reconcile these two comments, but what I will say is: I do not get the impression that people usually have the “the government ensures all people will stay above X income” interpretation in mind when talking about a UBI (except sometimes when they are retreating to a definitional motte, as currently appears to be the case); most people have in mind “a government policy that distributes funds to all people equally,” as you wrote in one of your comments. (I thought this is also what Andrew Yang had in mind, but I must admit some unfamiliarity with the details of his plan.)
Ultimately, I’ll just conclude by saying that I think that redefining UBI in such a way as to allow a policy such as a negative income tax just destroys the definition of a UBI, and I think you will not find many people who are sympathetic to such definitional stretching (although they may unfortunately be unaware of what’s happening).
What I have in mind would be a refundable tax credit, which also applies for people who do not pay excess amounts in income taxes. (i.e., it would be like receiving a $X check if you have not paid any taxes)
I think this is the same idea as a Negative Income Tax. As mentioned before UBI and NIT are functionally identical and only differ in accounting terms.
I want to make it clear I’m not attempting to stretch the definition of UBI to include NIT. A Universal Basic Income is a very different mechanism from a Negative Income Tax, my point is that both policies achieve the game-changing impact of a Basic Income Guarantee (BIG).
UBI is a government policy that distributes funds to all people equally
My point here is that the government distributes those funds equally, establishes that baseline of economic stability, and that does not include how it’s being paid for. GiveDirectly is running a UBI experiment where every person in Maryland Liberia will receive UBI for 3 years. The UBI is not being paid for by taxes, but by philanthropy & international aid money. Whether something is UBI or not depends on the disbursement mechanism, not on the means of funding.
From what I’ve seen it’s incredibly likely (logical economically) that direct cash transfers—or funding guaranteed income—is the most cost-effective way to help almost all people in need philanthropically. If we can prove this claim with rigorous RTC trials, it could substantially blur the lines between paying taxes dedicated for UBI & spending money on high-impact philanthropy.
Wouldn’t a rich person or organization in Maryland Liberia also want to support GiveDirectly’s UBI program?
(Responding to two of your comments at once)
First, just ignore the whole thing about TANF; I included that on a whim and I’m aware of the many criticisms of the program, but I have no interest in defending it as it is not central to the main argument I’m making. That aside...
You say that:
I suppose I should not have used the term “tax credit,” as I think most tax credits are non-refundable, but there are refundable tax credits (i.e., you can be paid by the government in excess of what you owe in taxes). What I have in mind would be a refundable tax credit, which also applies for people who do not pay excess amounts in income taxes. (i.e., it would be like receiving a $X check if you have not paid any taxes)
You say that:
Curiously, in a separate comment you also say:
I’m not exactly sure how to reconcile these two comments, but what I will say is: I do not get the impression that people usually have the “the government ensures all people will stay above X income” interpretation in mind when talking about a UBI (except sometimes when they are retreating to a definitional motte, as currently appears to be the case); most people have in mind “a government policy that distributes funds to all people equally,” as you wrote in one of your comments. (I thought this is also what Andrew Yang had in mind, but I must admit some unfamiliarity with the details of his plan.)
Ultimately, I’ll just conclude by saying that I think that redefining UBI in such a way as to allow a policy such as a negative income tax just destroys the definition of a UBI, and I think you will not find many people who are sympathetic to such definitional stretching (although they may unfortunately be unaware of what’s happening).
I think this is the same idea as a Negative Income Tax. As mentioned before UBI and NIT are functionally identical and only differ in accounting terms.
I want to make it clear I’m not attempting to stretch the definition of UBI to include NIT. A Universal Basic Income is a very different mechanism from a Negative Income Tax, my point is that both policies achieve the game-changing impact of a Basic Income Guarantee (BIG).
UBI is a government policy that distributes funds to all people equally
My point here is that the government distributes those funds equally, establishes that baseline of economic stability, and that does not include how it’s being paid for. GiveDirectly is running a UBI experiment where every person in Maryland Liberia will receive UBI for 3 years. The UBI is not being paid for by taxes, but by philanthropy & international aid money. Whether something is UBI or not depends on the disbursement mechanism, not on the means of funding.
From what I’ve seen it’s incredibly likely (logical economically) that direct cash transfers—or funding guaranteed income—is the most cost-effective way to help almost all people in need philanthropically. If we can prove this claim with rigorous RTC trials, it could substantially blur the lines between paying taxes dedicated for UBI & spending money on high-impact philanthropy.
Wouldn’t a rich person or organization in Maryland Liberia also want to support GiveDirectly’s UBI program?