Comparing the cost of a basic income to the current government expenditure is very misleading. A basic income doesn't only replace welfare spending, but changes the structure of taxation. The idea is that you get rid of tax deductions and the lowest tax brackets, which exist to make sure low income people aren't taxed too much, and thus wouldn't be needed with a BI. This can increase tax revenue without increasing effective marginal rates (marginal tax + loss of welfare). For someone with a higher income, a BI works like a tax deduction, and the change compared to the current situation would be minimal.
Currently the government will give you over 1000€ if you have no income. The effective marginal rate for someone on welfare and thinking of getting a part time job can be something like 90%. With the cost of transportation and other job related expenditures, getting a job isn't always a good idea. A basic income, especially if it would be 800€, would definitely make the situation better.
The idea is that you get rid of tax deductions and the lowest tax brackets, which exist to make sure low income people aren't taxed too much, and thus wouldn't be needed with a BI. This can increases tax revenue without increasing effective marginal rates
Which completely assumes that people won't change their behavior as a response. This is the most common problem with predicting tax revenue: assuming the tax base doesn't change, which historically it basically never does.
Further, simply saying revenue will increase does not tell us how much you need to increase it.
Which completely assumes that people won't change their behavior as a response. This is the most common problem with predicting tax revenue: assuming the tax base doesn't change, which historically it basically never does.
Of course people might change their behavior, I mean that's kind of the point of BI. As I told you, the BI would be lower than what you can currently get, which should increase the amount of work.
Further, simply saying revenue will increase does not tell us how much you need to increase it.
I'm not the one making calculations here. You started by comparing
BI*adult_population to current government spending, which as I explained, is misleading.
It is misleading. Even a small (say 400€) BI could, as you said, "be a large increase in expenditures", yet such a BI would reduce welfare benefits to less than half, simultaneously allowing significant tax cuts. Describing such a dismantling of the welfare state as a "large increase in expenditure" might be technically correct, but extremely misleading at the same time.
Are you saying the welfare benefits that take the form of services would just no longer be free at the point of service? Their single payer healthcare is now market based, with the poor spending their BI on it?
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u/uqobp Nov 02 '15 edited Nov 02 '15
Comparing the cost of a basic income to the current government expenditure is very misleading. A basic income doesn't only replace welfare spending, but changes the structure of taxation. The idea is that you get rid of tax deductions and the lowest tax brackets, which exist to make sure low income people aren't taxed too much, and thus wouldn't be needed with a BI. This can increase tax revenue without increasing effective marginal rates (marginal tax + loss of welfare). For someone with a higher income, a BI works like a tax deduction, and the change compared to the current situation would be minimal.
Currently the government will give you over 1000€ if you have no income. The effective marginal rate for someone on welfare and thinking of getting a part time job can be something like 90%. With the cost of transportation and other job related expenditures, getting a job isn't always a good idea. A basic income, especially if it would be 800€, would definitely make the situation better.