Archie Gemmill Goal
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You explicitly stated before that workers wouldn't be better off under UBI. That was a major part in the confusion!
Universal Income.
- Thread starter RolandRat
- Start date
You explicitly stated before that workers wouldn't be better off under UBI. That was a major part in the confusion!
Belz...
Fiend God
How long are people going to explain this to you until you decide to understand? Most people probably wouldn't see a difference in earnings, and the rich would pay more. And it's going to be administratively simpler.
What part of this don't you understand?
You have no idea what you are talking about. You are echoing points made by others who have not been specific. How about you setting salary limits of who will be paying more? And evidence of any sort of how many would see no difference and how many would see more? And how exactly the UBI would be funded?
You are one of the many here saying “UBI better just because”. Simply ********.
Belz...
Fiend God
I'm echoing points because you clearly don't understand them. We have to get past that before anyone can be specific. The funny part is that you think that give you a license to be vague in your own arguments.
You lie. I have NEVER said that.
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Edited to remove breach of rule 12
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Some things that UBI is meant to improve:
1. There are people who fall through the cracks of the welfare system. Some of them don't know that they're eligible, or don't know how to apply, or simply don't want to apply (perhaps because of stigma), for instance. Those people are entitled to funds that they aren't getting. UBI, because it would be simpler and given to everyone, should end up getting to these people too.
2. Eliminating perverse incentives: If getting a job (or a raise) can mean losing benefits, you might be financially worse off working than not. If a UBI is given to everyone, you still get it even after going from being unemployed to employed, and thus there shouldn't be anyone who would be worse off, or even not better off by getting a job. So it can actually improve incentives for people to increase their productivity.
With respect to #1, as those people aren't currently receiving funds, and they would be getting net money from UBI (ie. they shouldn't be paying it back in taxes), they will represent a new expense. To the extent that they are few in number, this can't be considered a major value of UBI (that doesn't mean it's not a good thing, just that such a large program should be justified by gains of similar scale). To the extent that they are large in number, they are also a meaningful expense.
With respect to #2 this again means that there is some class of wage earners who would be net better off with UBI than currently, unless these perverse incentives don't currently exist. So, again, to the extent that this is a real benefit from UBI, it also represents an actual expense beyond current expenditures.
Both of those things seem to me to be worth the expense, though.
1. There are people who fall through the cracks of the welfare system. Some of them don't know that they're eligible, or don't know how to apply, or simply don't want to apply (perhaps because of stigma), for instance. Those people are entitled to funds that they aren't getting. UBI, because it would be simpler and given to everyone, should end up getting to these people too.
2. Eliminating perverse incentives: If getting a job (or a raise) can mean losing benefits, you might be financially worse off working than not. If a UBI is given to everyone, you still get it even after going from being unemployed to employed, and thus there shouldn't be anyone who would be worse off, or even not better off by getting a job. So it can actually improve incentives for people to increase their productivity.
With respect to #1, as those people aren't currently receiving funds, and they would be getting net money from UBI (ie. they shouldn't be paying it back in taxes), they will represent a new expense. To the extent that they are few in number, this can't be considered a major value of UBI (that doesn't mean it's not a good thing, just that such a large program should be justified by gains of similar scale). To the extent that they are large in number, they are also a meaningful expense.
With respect to #2 this again means that there is some class of wage earners who would be net better off with UBI than currently, unless these perverse incentives don't currently exist. So, again, to the extent that this is a real benefit from UBI, it also represents an actual expense beyond current expenditures.
Both of those things seem to me to be worth the expense, though.
Matthew Best
Penultimate Amazing
Thanks for typing all this out. It will be interesting to see if anybody responds to it.
Matthew Best
Penultimate Amazing
Why don't you explain exactly what you are proposing, which would result in a high-earning worker receiving £10k of UBI but not being any better off as a result?
Tax bands don’t usually work like that do they?
People will have a tax free allowance, so in your example you make that £10,000. People are then taxed above that so your 25k earner is only paying 10% tax on 15k, not 25k. Your 60k earner is taxed at zero for the first 10,000, then 10% on their next 10k, then 25% on 30k, then 50% on 10k.
Matthew Best
Penultimate Amazing
I don't think you've done the maths properly, Darat. (Or perhaps you didn't read Archie's stated tax thresholds?)
Person on 25k pays pays nothing on the first £10k, then 10% on the next £10k (which is £1k), then 25% on the final £5k (which is £1.25k). That's a total of £0 + £1k + £1.25k = £2.25k, which is exactly what Archie said.
psionl0
Skeptical about skeptics
That's not how tax scales work. Under your system, a person on 11k would pay 1.1k tax on the extra 1k that they earned.
The tables normally work as follows
0 to 10k - 0
10k to 20k - 10% of earnngs in excess of 10k
20k to 50k - 1k + 25% of earnings in excess of 20k
over 50k - 8.5k + 40% on earnings in excess of 50k
Person 1 earns 10k and takes home 10k
Person on 25k is taxed 2.25k and takes home 22.75k
Person on 60k is taxed 12.5k and takes home 47.5k
Person on 1m is taxed 399988.5 and takes home 600,011.5k
If we eliminate the tax free and low tax thresholds and assume that a person on 50K should be the same as before then after receiving the UBI of 10k they should pay 18.5k tax on their 50 k which is a marginal rate of 37%.
If you keep the upper tax rate unchanged then persons on incomes over 50k would be no better or worse off because they would receive 10k but pay 18.5k plus 40% of their income over 50k in tax (the same as before).
Person 1 would be better off because they can do casual work and only be taxed 37% of these earnings instead of losing their benefits.
Person on 25k receives 10k UBI and pays tax of 7.375k so they take home 27.625k - marginally better off than before.
This is hypothetical of course but it shows how easy it is to adjust the tax scales to take UBI into account.
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Matthew Best
Penultimate Amazing
Nonsense. A person on 11k would pay 0.1k (i.e nothing on the first £10k, then 10% of the next £1k.
Matthew Best
Penultimate Amazing
Correct.
Correct
Correct
Correct
Correct - as Archie said.
Correct, as Archie said.
Incorrect. You said they pay £8.5k plus 40% of their earnings in excess of £50k. If they are on £60k, their earnings in excess of £50k amount to £10k and 40% of £10k is £4k, thus they pay £8.5 plus £4k which equals £12.5k. Where did you get £8.75k from?
What? You said they pay £8.5k plus 40% of their earnings over £50k. Their earnings over £50k are £950k. Thus they pay 40% of 950k plus 8.5k. How did you arrive at your figure?
Belz...
Fiend God
Deleted. Misread.
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psionl0
Skeptical about skeptics
Thanks for spotting the typos. I have corrected my figures. Only the 1m tax calculation is different to what Archie posted.
Matthew Best
Penultimate Amazing
Just so I understand, in your new system there would be no tax free or low tax threshholds, just a basic tax rate of 37% and a higher tax rate of 40%. And the UBI would be completely tax free. Is this right?
OK
Huh? I thought there was a basic tax rate of 37%? So a person on 25k would pay 37% of 25k, which is £9,250. So they would take home £15,750 plus the UBI of £10,000, which is £25,750.
If it's so easy, how come you keep getting the figures wrong?
Matthew Best
Penultimate Amazing
Why not correct that one as well?
Belz...
Fiend God
Archie's number was correct for the 1m also.
psionl0
Skeptical about skeptics
This is just one way to alter the tax scales. There are many others. A 3 or 4 tier tax system might be more equitable.
I accept that correction too. That person is still marginally better off.
I shouldn't have rushed that post. Proof reading matters.
Matthew Best
Penultimate Amazing
Apparently it's quite easy to get wrong - Darat also made the same error.