From comments I made on someone’s facebook thread (lightly edited for clarity):
It’s a legit question how to pay for a UBI. Now, I’m no economist, but I do have some notions. First is, yes, upping the rates on the highest tax brackets. You know, like we did during the golden age from the ’40s til the ’70s. Not only does it raise revenue from top earners, it disincentivizes taking earnings that high, because why do it if the government’s just going to take most of it? So the incentive is to reinvest that money in the company that earns it, by building and buying stuff, and to pay employees more. Which pushes money down the socioeconomic chain to people who will spend it on goods and services rather than betting/investing in derivatives markets, which is where way too much money is these days. The multiplier effect suggests that money pushed down into circulation creates more value/money than money put into derivative investments, which increases GDP and, as a result, the tax base.
There is also the question of what the alternative to UBI is. Sure, you can say the answer is to keep doing what we’re doing. But technology has put us in a position where that’s not going to work anymore. We don’t need so many factory workers, because robots can do the job more efficiently, just like we don’t need so many grocery checkers, because self-check machines do the job more efficiently. The old way of doing things is undergoing a sea change, which we can fight, or adapt to. Put briefly, there won’t be enough jobs in the traditional sense for everyone who wants one. Now, this can mean good things. For instance, an explosion of new IP, since artists and creatives of all kinds will be freed to pursue their work without worrying about keeping a roof over their heads. But also a revolution in entrepreneurial undertakings. Right now, to start a business you need to have enough of a cushion/nest egg to pay your bills til the business gets off the ground and starts earning enough to sustain you. With UBI, more people are freed up to take more chances entrepreneurially, which means tapping the potential of the American people more deeply than ever before. I personally happen to believe in the American people a great deal, so I see this as a good thing.
There are also the long-term benefits to consider. Study after study shows that lifetime achievement and contentment are higher in people who grow up in economically stable/prosperous households. They commit less crime, are healthier and happier, and are, as a rule, more productive.
Continue reading “A Preliminary Case for a Universal Basic Income”
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