Re-reading my original comment, I may have miscommunicated a bit: I am aware of arguments such as those that you mention above, I just don’t find them very compelling—in fact, they don’t even seem to come close to justifying the added costs, they are just noisy observations.
As background for the following responses, assume that >10M Americans make more than $120K annually as individuals.[1] So, ignoring all the savings that are saved by reduced payments to people making between $60K and $120K, and ignoring the option to set the bar differently for household income (e.g., the option to reduce payments for children of wealthy parents): If the UBI is set at just $10K annually,[2] this translates to $100,000,000,000 ($100B) in cost savings by not providing income to already-well-off people. The unique advantages of UBI (or unique disadvantages of more-nuanced systems) need to overcome this threshold to even begin to justify a simplistic UBI.
With that in mind, I’ll respond to your points:
Administrative costs
You still need administrative costs for a simplistic UBI to reduce fraud, ensure delivery of payments, etc. Thus, one cannot attribute the full administrative cost to ensuring income eligibility / it is not possible to run a UBI without administrative costs.
There is no way that ensuring income eligibility would come even close to the cost savings identified above (~$100B). Just for a very quick illustration, the entire budget of the IRS in the current, more complex system is only ~$15B (if I read this website correctly).
Personal costs
Again, this is not entirely unique to a more-nuanced system; similar efforts may have to take place with a simple UBI.
I would assume that you could automatically be means-tested based on your reported taxable income. If you already report making $100K a year for income tax purposes, I don’t see why it would take much more reporting/administrative effort.
Distortion of incentives
The system I described does not significantly suffer from this. To make the math easier, let’s just say the range were actually $60K to $110K. Even if one assumes a linear progression (rather than a more nuanced, super-linear system which I would recommend but won’t bother discussing here), then this means that for every extra dollar one makes after $60K, their benefits are only reduced by 20 cents ($0.20), thus meaning that they still make $0.80 with every extra dollar of income. (There is an added question of how this would be designed to interact with tax brackets, but the bottom line is that one can still be incentivized to make more money.)
If one thinks that the incentive reduction described above is too steep, you can expand the window of eligibility (e.g., $60K to $160K) to reduce the slope and still likely save tens of billions of dollars.
I have no idea what’s going on in this comment thread ^
But I had one tiny comment about this footnote:
2. There are longer debates to be had whether this is actually “basic” (sufficient for living), but that can of worms need not be opened here.
“Sufficient for living” is one way to interpret the word basic, but basic can also be interpreted as simply “the size of the base income” or floor. It doesn’t necessarily have to be a livable amount. Most of the benefits of UBI come from the substantial amount of power that people can leverage even with only $1000 or even $500 extra per month.
Re-reading my original comment, I may have miscommunicated a bit: I am aware of arguments such as those that you mention above, I just don’t find them very compelling—in fact, they don’t even seem to come close to justifying the added costs, they are just noisy observations.
As background for the following responses, assume that >10M Americans make more than $120K annually as individuals.[1] So, ignoring all the savings that are saved by reduced payments to people making between $60K and $120K, and ignoring the option to set the bar differently for household income (e.g., the option to reduce payments for children of wealthy parents):
If the UBI is set at just $10K annually,[2] this translates to $100,000,000,000 ($100B) in cost savings by not providing income to already-well-off people. The unique advantages of UBI (or unique disadvantages of more-nuanced systems) need to overcome this threshold to even begin to justify a simplistic UBI.
With that in mind, I’ll respond to your points:
Administrative costs
You still need administrative costs for a simplistic UBI to reduce fraud, ensure delivery of payments, etc. Thus, one cannot attribute the full administrative cost to ensuring income eligibility / it is not possible to run a UBI without administrative costs.
There is no way that ensuring income eligibility would come even close to the cost savings identified above (~$100B). Just for a very quick illustration, the entire budget of the IRS in the current, more complex system is only ~$15B (if I read this website correctly).
Personal costs
Again, this is not entirely unique to a more-nuanced system; similar efforts may have to take place with a simple UBI.
I would assume that you could automatically be means-tested based on your reported taxable income. If you already report making $100K a year for income tax purposes, I don’t see why it would take much more reporting/administrative effort.
Distortion of incentives
The system I described does not significantly suffer from this. To make the math easier, let’s just say the range were actually $60K to $110K. Even if one assumes a linear progression (rather than a more nuanced, super-linear system which I would recommend but won’t bother discussing here), then this means that for every extra dollar one makes after $60K, their benefits are only reduced by 20 cents ($0.20), thus meaning that they still make $0.80 with every extra dollar of income. (There is an added question of how this would be designed to interact with tax brackets, but the bottom line is that one can still be incentivized to make more money.)
If one thinks that the incentive reduction described above is too steep, you can expand the window of eligibility (e.g., $60K to $160K) to reduce the slope and still likely save tens of billions of dollars.
According to governmental stats reported on Wikipedia, roughly 20M Americans make more than $100K annually.
There are longer debates to be had whether this is actually “basic” (sufficient for living), but that can of worms need not be opened here.
I have no idea what’s going on in this comment thread ^
But I had one tiny comment about this footnote:
“Sufficient for living” is one way to interpret the word basic, but basic can also be interpreted as simply “the size of the base income” or floor. It doesn’t necessarily have to be a livable amount. Most of the benefits of UBI come from the substantial amount of power that people can leverage even with only $1000 or even $500 extra per month.