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A three-year UBI study done in Germany shows that a guaranteed monthly check increased labor market exploration and increased work satisfaction.
(www.pilotprojekt-grundeinkommen.de)
The big thing about ubi is it does not require the bureaucracy around applying for it and further its there when you need it right away. Lose a job, reitire, become disabled ; you still have income coming in. You working a good job and you will be paying as much or more in taxes than its making you. One thing I encounter is folks who think this will be extra money for everyone but it really only become significant the less well you are doing. So if its iffy that your job can meet rent the ubi saves your bacon, you lookin to buy a vacation place and its not really doing much for you. In some ways it would be like social security for all.
So that's an implementation I can understand: you only qualify for it if you really need it, and the more you need it, the more you are subsidized.
If everyone gets the same lump sum regardless of income, that's the part I hold issue with
no you always get it as that is where you get the bureaucracy savings. Its just paid for with usual progressive taxes so at some point you are paying as much taxes as you get and eventually more than you get same as taxes work now. If you lose your job though your taxes will be lower so the payments become important. You get rid of standard deductions and such because the ubi comes in as non taxable so you can start at 5% for any earnings and then like 10% at 10k and over and so on just like the progressive system works now. Its important that everyone gets it though because again no paperwork to get it when you need it. Its there when you need it and at higher levels it offsets your taxes basically.
I don't understand a lot of what you wrote, sorry
Evryone has UBI they receive it for being breathing. It covers your basics. You want more for some luxury? Go work get more.
That's the most boiled down version I can come up with.
I thought that was the argument, but wasn't sure. I can only really repeat that this looks rational from the perspective of the individual, but from the perspective of the retailer, what's stopping me from raising my prices for basic goods if I know that more people have disposable income?
And you arrived to the most flagrant problem UBI has. Well done.
Your competor who will undercut your high prices to get your customers.
I'd believe that if we hadn't just witnessed all food retailers simultaneously jacking up their prices recently and blaming inflation for it.
Society is vulnerable now and will still be with UBI, you need legislation and you need to enforce that legislation either way. I think the global increase in prices doesn't pan out equally; in some places this is a much bigger problem then in others. I think you are right that in places where companies jack up prices any chance they get, they will likely also use UBI as a chance to jack up prices.
So everyone gets a check regularly, no qualification needed except citizenship, but its just enough to get by. As you are more successful you end up paying more taxes than you get. So if you can't work you have just enough to get by. If you make just enough to get by with work you will pay some in taxes but with the ubi you will likely be able to live a bit better and not be right on the line. If you made enough to be living that bit better you are likely paying close to as much in taxes as what you are getting in ubi. If you make enough at work to be doing pretty well you will be paying more in tax than what you get and that will continue the higher you go. Rather than having forms and qualification and taxes paying for folks to decide if you deserve help you just let the progressive tax system handle it.
Thanks. I can understand from the perspective of reducing bureaucracy and that through progressive taxation that richer folks benefit less from it, but I still don't quite follow how this will not lead to inflation.
Imagine, I'm a food retailer. My goal is to make money, and I basically own the market. All of my customers plus some new ones suddenly have way more disposable income. Why wouldn't I gouge my prices up?
It's not really "way more". They're still only going to spend what they wanted to spend before.
The money also isn't created out of thin air, it's obtained through taxes on higher incomes and businesses.
I guess I'm still not getting it. If I'm being taxed more as a greedy corporation, isn't that even more justification to jack up my prices on my customers who can afford a little more?
Because ultimately people don't have much more to spend. Any competitor of yours that doesn't jack up prices will win a lot of customers that way. You don't want to price yourself out of the market.
Ultimately the same amount of money is in the economy, it's just distributed differently.
I'd believe the competitor argument if I hadn't just witnessed all food retailers world-wide jack their prices without cause
But then surely UBI doesn't matter if you believe they'll jack up prices regardless of a good cause?
The price jacking stops when all retailers start losing customers (simply cannot afford food). With UBI, they will gain new customers which will make them jack it up again
What makes you say that? Clearly food prices aren't at the point of unaffordability now. UBI also wouldn't really create new customers, as people already need food now, UBI just guarantees they won't have to go into debt to afford it.
What you're describing makes more sense in an economic context where food is scarce, eg once a retailer has enough customers, they could sell all of their stock. In this scenario, jacking prices makes more sense, because you're not getting any more customers by lowering them. But food generally isn't scarce (in the developed world at least), meaning you're always going to have excess stock. Now, the way to earn more money is to find a delicate balance between lowering prices and gaining more customers (but less revenue per sale, but have more sales and less waste to handle) or increasing prices but losing customers (meaning fewer sales, but more revenue per sale).
UBI isn't really a factor in that last calculation, because it's mostly dependent on the prices of your competitors. Of course, in a monopolistic market things are different, but then the price jacking can also happen independently of UBI.
To show a real-life example, take a look at Belgium. The price of food there has been quite low relative to other countries. Why? Because Ahold-Delhaize entered the market and tried competing heavily with existing brands there. The way to do that was through lowering prices, which forced other supermarkets to follow suit. Ahold could afford this, because they own a very significant market share in the Netherlands, where they could in fact increase prices (which is the semi-monopolistic behaviour I mentioned) and offset the cost. Their competitors are less well established or cannot compete at scale, so customers have fewer alternatives (and in locations where they do the prices are lowered a bit again to retain customers).
Why not do it anyway without ubi. They have no competition I assume given the scenario you give. People can't shop somewhere else I assume under your scenario.
Well they have done it anyway, but reached an equilibrium where they all might start losing customers
exactly. The price is based on if the customer can go get a better price somewhere else as opposed to if the customer has more money to spend.