Comment on [deleted]
sj_zero 11 months agoI apologize in advance, this is a lot of stuff, but I had to source data and then analyze it. Man, you don't need to reply to everything... or maybe anything... The process was interesting at least.
The studies saying UBI is cost effective are wrong, and they're designed to be wrong.
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They aren't universal. They instead pick and choose who to give the money to, and if you're not the target you don't get the money. I witnessed this myself with a friend of mine who was initially selected for such a study before being kicked out for having a solid blue collar job. Some people think that UBI shouldn't actually be universal and instead should be means tested where as your income rises your UBI is slowly cut off, but I think every piece of extra bureaucracy you add diminishes the benefits of it being universal basic income.
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They don't cover every part of what UBI would entail. They don't raise everyone's taxes to pay for it, it's just free money from a black hole of money.
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They're temporary. The people know this money is a temporary measure as part of a study and that fact will cause them to behave differently than if the money was a guaranteed thing in law. Of course given a temporary boon you'll use it differently than if you are given a permanent one.
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They are a micrometer measuring a continent. Small studies fail to recognize the impact of large scale changes. Giving everyone free money for existing would be a major societal change that would have effects you won't measure on the micro level because they'd be macro changes.
Implementing a truly universal basic income of conservatively saying $10,000/yr for the adult population in the US of 260 million people would cost about 2.6 trillion dollars per year. That's something you'd need to really work miracles to get such a return from that we can call it "cost effective". 2.6 trillion dollars is about every dollar the US government gets from personal income tax.
I did the math, and you have a point with respect to the land taxes, if we assume a flat rate. To replace the income tax, payroll tax, and corporate income tax with a land tax, applied to all land that's privately owned, that's 3900/hectare in land tax annually. To actually balance the budget would be 4650/yr per hectare, or about 1880/acre, and many homes are built on 1/8th acre plots, so individual homeowners would be paying a pittance -- they'd pay more for a month of good fiber internet than for a years federal land taxes, about $235. Add another 30% or so if you're going to add UBI. There's other nice things about it, that it would mean considerably less effort employing people or running businesses since the tax would be fixed to a certain person who owns a certain piece of land, and individuals would get to take home more of their pay. Given that a 1/8 acre plot of land is normal for housing, that could be a pretty trivial cost.
It indeed would mean different people are paying the taxes. Further research suggested to me that it might have a problem of it's own -- $1880/acre (or another 30% if we want UBI) is much more than many farmers make in net revenue per acre on many farms (the average profit per acre being about $29), which could cause the farmers to fold, and if nobody else wanted the land as would likely be the case for large swaths of land it would probably revert to the federal government, causing the government to own a bunch more land and each individual landowner paying more in taxes, perhaps considerably so. It's a big burden. Furthermore, it would mean that rural landowners would end up carrying the bulk of the weight with respect to supporting the Federal government. If instead you did it by some other metric, perhaps charging one urban tax rate and another rural tax rate, you could crank it up so urban people pay significantly more per acre you could drive down the rural rate and help reduce the pain for farmers. A final problem would be that many of the richest people would come out significantly ahead under this scheme. If you're a tech billionaire and all your property is intellectual, you pay no tax to speak of, and if you're running a factory maybe you pay a few thousand dollars per year, you'd definitely see people lashing out at the super-rich who ended up paying virtually no tax under this system.
Looking at it further, I don't know if you could balance things in any sort of reasonable way. Urban centers make up 3% of America's land, and that makes up 81% of the population. To balance things reasonably between urban and rural taxpayers, intuitively it seems like you'd need to tax city land at absurdly high rates to keep farmers from going out of business, which returns us to the neofeudalism problem, since property in cities would need to cost so much to counter the problem of farms that only the rich could afford their annual payments, even with the elimination of income tax.
If we limit our land taxes to that urban 3% of the country, we'd be looking at a required tax of about $150,000/yr per acre, and if you section it off into 1/8th acre segments, we'd be looking at about $20,000 per year... In an otherwise tax free environment that might not be so bad, actually. It would definitely mean that people who make more would be in a better position to buy property, but welcome to life. The other problem is that it would affect rental prices a lot since besides the cost of renting the house you'd need to cover that $20,000 per year (and yes, the land lord would pass that onto the renter). If you split that 1/8 acre into a number of further subdivided units it could work out for low income people, and of course you wouldn't put the entire tax burden on just that 3% of the country, the farmers would be expected to pay some land taxes.
Another option is land value taxation (LVT), a type of property tax that taxes only the value of land, not the value of buildings or improvements on the land. LVT is based on the idea that land is a scarce and fixed resource that derives its value from its location, accessibility, and public services, rather than from individual effort or investment. One thing that makes this more complicated is that you'd need to have something set up to routinely calculate the value of the land alone, and that seems like it could be subjective and changing. For example, if you owned a house far out of town it might be considered to be low land value, but what if someone set up a housing development and a shopping mall nearby? Would that mean that suddenly it's considered desirable land because it's close to other stuff? Maybe an algorithm could be used to calculate land value without bias and without using an army of bureaucrats just for this little thing.
Sort of seems unfair that your taxes would be related to someone else coming in and building a thing. You never had a choice in the matter of who builds what where, yet presumably a home you built because you could afford to live there in a low tax region could be thrown into a high tax bracket because someone builds a thing. In this way, you'd end up actually creating a state mandated gentrification factor.
You could set it so your taxes are indexed to inflation once you buy a property, but that would incentivize buying up a bunch of property in low tax areas since you'd own it for very little tax so you could hold it until the city caught up and then you could just rent out houses on that property and make a huge profit because the tax is locked in as if there isn't a city nearby.
Ultimately, the problem is that there's just too damn much money that needs to get extracted from people. Income taxes balance it somewhat by taking up to 50% of every new dollar someone makes as they make more but leaving their first few dollars alone completely, but in this case you'd be taking the same from people whether they made a lot of money or a little.
One nice thing about a land tax system is to balance the budget all you need to do is distribute the predicted cost of running the government through all the different acres of land.
The more automation there is, the more the benefit is shared by humanity as a whole. I mean, it's pretty neat that I can have this conversation with you using a data center I can privately own and operate. That being said, I do recognise that there's some serious wealth and power inequality at the moment, it's a big part of many of my various views.
Wages have indeed stagnated, but I'm not sure UBI would have the effect of incentivizing wages not stagnating. It's secular cycle and we're in a particularly bad part of that cycle in part because of the baby boom. A lot of people blame the baby boomers for everything that's happened, but they were already having to deal with the changing world by the time they just came of age in the late 60s and early 70s.
I didn't pull the number out of my ass, it's pretty well established: https://fred.stlouisfed.org/series/LNS11300001
I'll admit I didn't get the numbers exactly right, but still -- peaking at 86% in the 1960s, today it's 68%. That's a huge difference, and so you can't compare the unemployment rate when 86% of ablebodied men are working to the unemployment rate when 68% of ablebodied men are working. Unfortunately, the stagnating wages are a big part of the problem, for a lot of men it isn't worth going through the hassle if they can survive in other ways.
I should mention to preempt the argument, I know that many more women are in the workforce than there used to be and so that does balance the effects out somewhat -- In the 1960s, more like 35% of women worked, today it's closer to 60%. There's arguments to be made about this fact, that it's good, that it's bad, but in some ways it also just further shows that it's an apples and oranges comparison.
People have always been caretakers or homesteaders, so it doesn't seem an apples and oranges comparison to look at the 1960s and today the same. It does seem an apples and oranges comparison to compare the unemployment rate where most people are trying to get a job to an era where most people are discouraged workers who aren't even trying.
Kinda is how things work, though, isn't it? If there was no need for workers, we wouldn't be importing them. It would be more ideal for the people who live in a place to see wages rise so companies could maybe try to lure some of those discouraged workers out of their doldrums, but instead importing low wage workers and implementing UBI seems more likely to further cement low wages.
A stock market is where people trade shares in companies. The shares can be bought and the more shares you own the more control you can exercise over the company. It's one form of market, but it's not the only one, and it's not the only one where people try to make money. House flippers have been driving up home prices for profit for years, and crypto markets are open 24/7 and decentralized. So if stock markets didn't exist and you either owned the whole company or nothing then people would find other stuff to dump money into.
Implementing UBI would mean having extra money sloshing around. Some of that extra money would reach the stock market, and if your hypothetical universe without a stock market existed then that money would reach normal markets, driving up the prices of goods we actually need. In that sense the stock market is almost beneficial, acting as a money sink so extra liquidity doesn't end up driving up the prices of tangible goods.
If you want to keep most of the social programs, that's your opinion, but it's not the opinion of many people who advocate for UBI. One justification for UBI is that other social programs would be eliminated. If we're not going to eliminate all other social programs (perhaps even most other social programs besides cash welfare), then that means the cost/benefit has that much more to go.
On a related topic to all this, we need to balance the budget permanently, and soon. Thanks to irresponsible spending, the amount of money we're paying bankers for the privilege of having lent us money in the past is more than the military budget, and eventually it'll surpass all discretionary spending. If we don't fix this problem, forget about UBI -- we won't have any social programs at all because we'll be sending all the money to bankers. Talking about adding as much spending as the entire personal income tax haul, we're also far behind on just taxing what we spend in the first place.
A lot of people say that government debt isn't like normal debt so we shouldn't worry about it because such debt can help grow the economy, but economists have repeatedly found that a debt/GDP of over 100% reduces economic growth, so that argument is not something one can rely on forever, and particularly not when the gross debt to gdp is at 126%, a higher level than at the end of world war 2.
https://www.mercatus.org/research/policy-briefs/debt-and-growth-decade-studies
https://fred.stlouisfed.org/series/GFDGDPA188S
Here's some other sources of information I used:
A look at the 2022 federal budget, CBO: https://www.cbo.gov/publication/58891
Top 10 largest landowners in the US: https://www.proag.com/news/top-10-largest-landowners-in-the-u-s-revealed/#:~:text=The%20nation's%20largest%20private%20landowners,Four%20Sixes%20Ranch%20in%20Texas.
The 2023 farmer return is projected to be about $29 per acre: https://www.agweb.com/news/business/taxes-and-finance/2023-farmer-returns-projected-25-acre-80-lower-2022#:~:text=The%202023%20farmer%20return%20is%20projected%20to%20be,2019%20when%20the%20return%20averaged%20%2429%20per%20acre.
In total, there are 1.3 billion acres of private land: https://ubique.americangeo.org/map-of-the-week/map-of-the-week-mapping-private-vs-public-land-in-the-united-states/
Productivity is disconnected from wages: https://www.epi.org/blog/growing-inequalities-reflecting-growing-employer-power-have-generated-a-productivity-pay-gap-since-1979-productivity-has-grown-3-5-times-as-much-as-pay-for-the-typical-worker/#:~:text=Productivity%20and%20pay%20once%20climbed,released%20ahead%20of%20Labor%20Day.
America to soon spend more on debt maintenance than defense: https://www.economist.com/graphic-detail/2023/10/11/america-may-soon-be-spending-more-on-debt-service-than-defence
Brookings institute paper on UBI and how it has major flaws similar to what I've been saying: https://www.brookings.edu/wp-content/uploads/2019/08/UBI-ESG-Memo-082319.pdf
Land use in the United States, showing urban land use is about 3%: https://www.weforum.org/agenda/2020/02/land-use-america-agriculture-nature-urban/
Urban vs. rural population, showing that urban population makes up 81%: https://www.statista.com/statistics/985183/size-urban-rural-population-us/
The cost of land use restrictions: https://www.nber.org/system/files/working_papers/w18110/revisions/w18110.rev3.pdf
PizzaMan@lemmy.world 11 months ago
I like to though. It’s fun. There is a lot here so I will try to be as brief as possible
That could have been because they reached the number of blue collar works needed for the study. Though I can’t say without seeing this study.
Because the point is to look at the effects, not the source. “Is this beneficial” is the point of the question. The government already has plenty of money that is wasted elsewhere, so I don’t think the source is much of an issue.
Sure, the behavior will be different. But either way people will plan to use their money according to their needs, which the studies show as beneficial.
So then start it off small. Stupid small, maybe $10/m/person. That’d end up being $38 billion a year, which is pennies in comparison to the amount we dump into the black hole that is the military. Then slowly raise it year over year until the right balance is found.
The problems with farms & rural areas spending an unfair amount has crossed my mind as well, so a land tax that would charge everything equally is the worst way to do this, but potentially not the end of the world. Farmers would pass on the tax, and so our food end up costing what it actually costs to make. Foods that are better uses of land would be much more profitable, foods that are wasteful would be priced accordingly. It would go along way towards ending the unfair ways in which the cost of food is socialized through pollution, land over use, etc.
With that said, I agree this is still a bad way to do a land tax because imported food would suddenly be significantly cheaper in comparison, which would bring it’s own host of problems. So a LVT would be the move. I only brought up my dad’s plot of land to show how an average person would compare to the rich who own all the land.
This is the best option in my mind as well. And in my opinion, the “algorithm” for this should be dead simple so citizens could audit their valuation. It should be something along the lines of
Yearly tax = ( Plot size / distance to nearest city center ) * Government tax modifier
The government tax modifier would change from year to year depending on budget needs. We need 7 trillion? Reverse the math and work out that modifier. Need 5 trillion for the year? Do the same. This is something that can easily be automated, it is objective, and it reflects the amount of land you hoard. The rich can get bent because they own all the land. Rural owners will pay basically nothing. City owners will pay their fair share without getting screwed over due to owning small plots, etc. Maybe some adjustment is needed to make it balance out to a fair ratio, but nothing crazy.
The suburban sprawl would potentially get worse with this, but the incentive for more effective land use should hopefully balance it out.
A LVT is the least bad tax option. All taxes are shit, but this one at least has a semblance of fairness.
That’s not the purpose of UBI though. The purpose is to stabilize everyone’s finances, and to pull people out of poverty.
I appologize for say so then. Still, a 18% decrease over almost a century doesn’t seem like that big of a deal with given the trend with women you mentioned:
…stlouisfed.org/…/women-in-the-labor-force/?utm_s…
More and more men are becoming stay at home dads, while more and more women have careers. Give it another few decades and it will even out. If either of these metrics were useful, it wouldn’t be gendered.
Sign me up then. So many other things would be a better use of investment money.
Not necessarily. Some of it would be saved up, some of it would be used on discretionaries, etc. And besides, the whole point of a market is that supply and demand eventually, naturally balance out.
Like I said earlier, it should be a slow raise so as to avoid any disasters. Social programs that are determined to not be needed anymore should be slowly defunded/restricted as time goes on.
I agree. It’s too bad we are spending so much of it on tax breaks and bailouts for the rich, the military, fossil fuel subsidies, etc. I know you almost certainly disagree with where the waste is, but to me those are the biggest ones by far.