$1,000/mo. U.S. Universal Basic Income Benefit Plan

[Salvador]

Andrew Yang is a 2020 Democratic presidential hopeful who favors a guaranteed $1,000/month income for all American citizens over the age of 18; Andrew Yang proposes a $1,000 monthly universal basic benefit, he calls the Freedom dividend, for every American over the age of 18 who does not receive social security income. Those who qualify for social security income would receive the greater amount of either their designated social security benefits or the $1,000 monthly Universal Basic Income benefit. Andrew Yang proposes this $1,000 monthly guaranteed income benefit for every legal American adult be funded in part by a 10 percent value added tax system.

A $1,000 monthly universal basic income benefit system for American citizens between ages 18 to 65 would cost ca. $2 trillion dollars currently each year . A 10 percent Value added tax system like that implemented in Australia would generate ca. $800 billion annually of current value U.S. Dollars If this system of taxation were implemented in the U.S. If this Universal Basic Income Benefit were non-tax-exempt from federal income taxes, this would generate ca. $450 billion of tax revenue, based on the average annual U.S. income of $50,000 being taxed at a marginal tax rate of 22 percent. This Universal Basic Income Benefit could replace ca. $350 billion annually of federal welfare spending presently on food stamps, housing, education, job programs for economically disadvantaged citizens, unemployment compensation and subsidized crop insurance. The remaining $400 billion needed to completely fund this universal basic income benefit system could be funded by Increasing the top marginal federal income tax rate from 37% to 43% along with increasing the second highest top marginal federal income tax rate from 35% to 38%, (These income tax hikes would now currently generate an additional ca. $200 billion/yr. of tax revenue), an additional 50 cent/gallon fuel excise tax, an additional 50 cent tobacco excise tax on each pack of cigarettes, a 50 percent increase of excise taxes on adult beverage alcohol content, a doubling of federal excise taxes on air travelers and national park visitors, (These excise tax hikes would currently generate an additional ca. $110 billion/yr of tax revenue) and the reduction of the exemption on the federal estate tax from $10 million to $5 million, (this would generate an additional ca. $40 billion/yr of tax revenue) , increasing the limit of annual income from $131k to $200k subject to social security taxes , ( this would currently generate ca. $60 billion/yr. of additional revenue),

In addition to his freedom dividend ( Universal Income Benefit system), 2020 Democratic Presidential hopeful Andrew Yang wants universal health care. Expanding Medicare Part A coverage from covering only senior citizens to Universal Medicare Part A (hospital insurance) for everybody could be done at a present annual cost of ca. $700 billion. This could be mostly paid by eliminating nearly $500 billion of annual federal spending currently towards Medicaid. A $1,000/month Universal Basic income benefit virtually eliminates poverty, this elimination of poverty along with universal Medicare Part A health insurance coverage, eliminates the need for federal government spending on Medicaid. The remaining $200 billion annual cost for funding Universal Medicare A hospital insurance could be paid by a modest rise in the corporate income tax from 21 percent to 25 percent.

Medicare Part B could then become a public option health insurance plan with affordable premiums for most anybody. .....

 

[sun rise]

Does this replace various welfare and tax statutes such as EITC? Or in other words, do we get rid of a boatload of complexities for a simple payment?

The second point is to consider the Alaska, Finland and other locations schemes. Alaska, for example, paid out oil revenue to people living there. And there have been experiments in Finland, India and other places as noted here: What is There to Learn From Finland’s Basic Income Experiment? Did It Succeed or Fail?

The problem with yes or no votes rest on the problem with the proposal as documented in the OP. We need a statement of how this worked out in other places. I noted this from the above link:

Entrepreneurship too would be further enhanced, because just providing one person cash may function as venture capital and risk reduction for them, but it doesn’t create their customer base. Providing money to everyone is what creates customers, which fuels new businesses. This is why increased entrepreneurship is such a common finding in actual experiments of basic income that impact entire communities. For example, in Namibia’s UBI experiment, entrepreneurship jumped 301%. In India’s UBI experiment, entrepreneurship in treatment villages was observed at three times the rate as control villages. These are the results of both increased capital and increased consumer buying power combined.

So I take the proposal as a starting point not something to vote yes or no to.

 

[Salvador]

Does this replace various welfare and tax statutes such as EITC? Or in other words, do we get rid of a boatload of complexities for a simple payment?

The second point is to consider the Alaska, Finland and other locations schemes. Alaska, for example, paid out oil revenue to people living there. And there have been experiments in Finland, India and other places as noted here: What is There to Learn From Finland’s Basic Income Experiment? Did It Succeed or Fail?

The problem with yes or no votes rest on the problem with the proposal as documented in the OP. We need a statement of how this worked out in other places. I noted this from the above link:

Entrepreneurship too would be further enhanced, because just providing one person cash may function as venture capital and risk reduction for them, but it doesn’t create their customer base. Providing money to everyone is what creates customers, which fuels new businesses. This is why increased entrepreneurship is such a common finding in actual experiments of basic income that impact entire communities. For example, in Namibia’s UBI experiment, entrepreneurship jumped 301%. In India’s UBI experiment, entrepreneurship in treatment villages was observed at three times the rate as control villages. These are the results of both increased capital and increased consumer buying power combined.

So I take the proposal as a starting point not something to vote yes or no to.

The earned income tax credit and refundable child tax credits along with a $1,000/monthly universal basic income benefit for each household adult would lift many families out of poverty. ...

I'm aware that a universal basic income experiment was just recently completed in Finland; I'm anxiously awaiting the findings from this study's results.

 

[Nakosis]

Andrew Yang is a 2020 Democratic presidential hopeful who favors a guaranteed $1,000/month income for all American citizens over the age of 18; Andrew Yang proposes a $1,000 monthly universal basic benefit, he calls the Freedom dividend, for every American over the age of 18 who does not receive social security income. Those who qualify for social security income would receive the greater amount of either their designated social security benefits or the $1,000 monthly Universal Basic Income benefit. Andrew Yang proposes this $1,000 monthly guaranteed income benefit for every legal American adult be funded in part by a 10 percent value added tax system.

A $1,000 monthly universal basic income benefit system for American citizens between ages 18 to 65 would cost ca. $2 trillion dollars currently each year . A 10 percent Value added tax system like that implemented in Australia would generate ca. $800 billion annually of current value U.S. Dollars If this system of taxation were implemented in the U.S. If this Universal Basic Income Benefit were non-tax-exempt from federal income taxes, this would generate ca. $450 billion of tax revenue, based on the average annual U.S. income of $50,000 being taxed at a marginal tax rate of 22 percent. This Universal Basic Income Benefit could replace ca. $350 billion annually of federal welfare spending presently on food stamps, housing, education, job programs for economically disadvantaged citizens, unemployment compensation and subsidized crop insurance. The remaining $400 billion needed to completely fund this universal basic income benefit system could be funded by Increasing the top marginal federal income tax rate from 37% to 43% along with increasing the second highest top marginal federal income tax rate from 35% to 38%, (These income tax hikes would now currently generate an additional ca. $200 billion/yr. of tax revenue), an additional 50 cent/gallon fuel excise tax, an additional 50 cent tobacco excise tax on each pack of cigarettes, a 50 percent increase of excise taxes on adult beverage alcohol content, a doubling of federal excise taxes on air travelers and national park visitors, (These excise tax hikes would currently generate an additional ca. $110 billion/yr of tax revenue) and the reduction of the exemption on the federal estate tax from $10 million to $5 million, (this would generate an additional ca. $40 billion/yr of tax revenue) , increasing the limit of annual income from $131k to $200k subject to social security taxes , ( this would currently generate ca. $60 billion/yr. of additional revenue),

In addition to his freedom dividend ( Universal Income Benefit system), 2020 Democratic Presidential hopeful Andrew Yang wants universal health care. Expanding Medicare Part A coverage from covering only senior citizens to Universal Medicare Part A (hospital insurance) for everybody could be done at a present annual cost of ca. $700 billion. This could be mostly paid by eliminating nearly $500 billion of annual federal spending currently towards Medicaid. A $1,000/month Universal Basic income benefit virtually eliminates poverty, this elimination of poverty along with universal Medicare Part A health insurance coverage, eliminates the need for federal government spending on Medicaid. The remaining $200 billion annual cost for funding Universal Medicare A hospital insurance could be paid by a modest rise in the corporate income tax from 21 percent to 25 percent.

Medicare Part B could then become a public option health insurance plan with affordable premiums for most anybody. .....

While people will be more inclined to make art, write novels, and work less, the amount of needed goods in society will decline.

Andrew Yang’s Math Doesn’t Add Up on Universal Basic Income | Jacob Dowell

IMO it assumes a predictability of economics which is usually not that predictable. As I understand this, we need a production of capital goods to make the economy grow, not just a transfer of wealth. IOWs someone has to gather resources, store them and produce product for consumption.

Here we are giving money for no value, no work. Disincentivizes the need to work, not completely, but to some degree. It assumes everyone will continue to work/produce at the same level but can't gurantee that. To fund this we will likely be looking at higher taxes.

Kind of like the idea of a perpetual motion machine. Thinking an economy can run on the exchange of money without energy/work being put into the system. The (value of) money eventually runs out.

 

[Salvador]

While people will be more inclined to make art, write novels, and work less, the amount of needed goods in society will decline.

Andrew Yang’s Math Doesn’t Add Up on Universal Basic Income | Jacob Dowell

IMO it assumes a predictability of economics which is usually not that predictable. As I understand this, we need a production of capital goods to make the economy grow, not just a transfer of wealth. IOWs someone has to gather resources, store them and produce product for consumption.

Here we are giving money for no value, no work. Disincentivizes the need to work, not completely, but to some degree. It assumes everyone will continue to work/produce at the same level but can't gurantee that. To fund this we will likely be looking at higher taxes.

Kind of like the idea of a perpetual motion machine. Thinking an economy can run on the exchange of money without energy/work being put into the system. The money eventually runs out.

In my above commentary, I've tweaked Andrew Yang's plan on Universal Basic Income that'd ensure all American citizens are lifted out of poverty, this done without adding to our national debt. ...

 

[Twilight Hue]

Andrew Yang is a 2020 Democratic presidential hopeful who favors a guaranteed $1,000/month income for all American citizens over the age of 18; Andrew Yang proposes a $1,000 monthly universal basic benefit, he calls the Freedom dividend, for every American over the age of 18 who does not receive social security income. Those who qualify for social security income would receive the greater amount of either their designated social security benefits or the $1,000 monthly Universal Basic Income benefit. Andrew Yang proposes this $1,000 monthly guaranteed income benefit for every legal American adult be funded in part by a 10 percent value added tax system.

A $1,000 monthly universal basic income benefit system for American citizens between ages 18 to 65 would cost ca. $2 trillion dollars currently each year . A 10 percent Value added tax system like that implemented in Australia would generate ca. $800 billion annually of current value U.S. Dollars If this system of taxation were implemented in the U.S. If this Universal Basic Income Benefit were non-tax-exempt from federal income taxes, this would generate ca. $450 billion of tax revenue, based on the average annual U.S. income of $50,000 being taxed at a marginal tax rate of 22 percent. This Universal Basic Income Benefit could replace ca. $350 billion annually of federal welfare spending presently on food stamps, housing, education, job programs for economically disadvantaged citizens, unemployment compensation and subsidized crop insurance. The remaining $400 billion needed to completely fund this universal basic income benefit system could be funded by Increasing the top marginal federal income tax rate from 37% to 43% along with increasing the second highest top marginal federal income tax rate from 35% to 38%, (These income tax hikes would now currently generate an additional ca. $200 billion/yr. of tax revenue), an additional 50 cent/gallon fuel excise tax, an additional 50 cent tobacco excise tax on each pack of cigarettes, a 50 percent increase of excise taxes on adult beverage alcohol content, a doubling of federal excise taxes on air travelers and national park visitors, (These excise tax hikes would currently generate an additional ca. $110 billion/yr of tax revenue) and the reduction of the exemption on the federal estate tax from $10 million to $5 million, (this would generate an additional ca. $40 billion/yr of tax revenue) , increasing the limit of annual income from $131k to $200k subject to social security taxes , ( this would currently generate ca. $60 billion/yr. of additional revenue),

In addition to his freedom dividend ( Universal Income Benefit system), 2020 Democratic Presidential hopeful Andrew Yang wants universal health care. Expanding Medicare Part A coverage from covering only senior citizens to Universal Medicare Part A (hospital insurance) for everybody could be done at a present annual cost of ca. $700 billion. This could be mostly paid by eliminating nearly $500 billion of annual federal spending currently towards Medicaid. A $1,000/month Universal Basic income benefit virtually eliminates poverty, this elimination of poverty along with universal Medicare Part A health insurance coverage, eliminates the need for federal government spending on Medicaid. The remaining $200 billion annual cost for funding Universal Medicare A hospital insurance could be paid by a modest rise in the corporate income tax from 21 percent to 25 percent.

Medicare Part B could then become a public option health insurance plan with affordable premiums for most anybody. .....

I would favor it in principle except for two huge sticking points. The money is going to have to come from somewhere, and the tax man looketh around the corner to garner a significant portion of that back.

 

[Shadow Wolf]

I'm not too fond of the idea of taxes being placed on gas to help pay, as some states already tap into that. In California, it would mean over $1.00 of every gallon of gas is taxes.
If he wants funding, get rid of cannabis as a schedule 1 drug, legalize, regulate, and tax it, and we'll have plenty of money for that and more. Or at least spread it around some so not increase taxes too much for states that are already channeling his planned avenues for revenue.

 

[Salvador]

I would favor it in principle except for two huge sticking points. The money is going to have to come from somewhere, and the tax man looketh around the corner to garner a significant portion of that back.

The money would come from a 10 percent V.A.T. system like that implemented in Australia, elimination of current welfare spending, and modest income tax hikes on corporations who'd greatly benefit by not being the ones having to pay health insurance benefits for their employees due to them being covered by my proposed Medicare A hospital insurance coverage for everybody, a small fraction of funding for Yang's universal basic income plan and my proposed expansion of Medicare A from hospital insurance coverage only for senior citizens to universal hospital insurance for everybody could also come by way of modest personal income tax rate hikes on the top 2 income tax brackets. The fuel excise tax hasn't been increased in awhile, that could be raised in order to help fund Yang's universal basic income plan along with my proposed Medicare A hospital insurance for everybody. A halving of the exemption amount of wealth from federal estate taxes would still only impact a very small number of estates. A doubling of excise taxes for national park visitors or airline travelers would be well justified, because of the traveler's or park visitor's enrichment by way of a $1,000/month universal income benefit enables him/her to more closely pay the full costs for his/her usage of government services.

 

[Salvador]

I'm not too fond of the idea of taxes being placed on gas to help pay, as some states already tap into that. In California, it would mean over $1.00 of every gallon of gas is taxes.
If he wants funding, get rid of cannabis as a schedule 1 drug, legalize, regulate, and tax it, and we'll have plenty of money for that and more. Or at least spread it around some so not increase taxes too much for states that are already channeling his planned avenues for revenue.

The burning of fossil fuels is causing harmful climate change, hopefully my proposed fuel tax increase would encourage people to consume less fuel. They pay the equivalent of somewhere around $3/gallon for fuel in Europe. The legalization of cannabis, assuming it's taxed in the same way as tobacco is currently, would generate ca. 20 billion dollars annually of additional federal tax revenue; I'd certainly be in favor of that.

 

[Quetzal]

I would favor it in principle except for two huge sticking points. The money is going to have to come from somewhere, and the tax man looketh around the corner to garner a significant portion of that back.

He has addressed how he would generate that income. Primarily through a VAT (value added tax).

 

[Shadow Wolf]

They pay the equivalent of somewhere around $3/gallon for fuel in Europe.

Some places in California gas is well over $3/gallon, and in some places well over $4/gallon.

 

[Salvador]

While people will be more inclined to make art, write novels, and work less, the amount of needed goods in society will decline.

Andrew Yang’s Math Doesn’t Add Up on Universal Basic Income | Jacob Dowell

IMO it assumes a predictability of economics which is usually not that predictable. As I understand this, we need a production of capital goods to make the economy grow, not just a transfer of wealth. IOWs someone has to gather resources, store them and produce product for consumption.

Here we are giving money for no value, no work. Disincentivizes the need to work, not completely, but to some degree. It assumes everyone will continue to work/produce at the same level but can't gurantee that. .

Imo, a $1,000/month universal basic income benefit would likely buy some time for most anybody to find a job or work he/she greatly enjoys, but $1,000/month of income probably isn't enough income for most anybody to stop working or remain unemployed for awhile.

 

[Salvador]

Some places in California gas is well over $3/gallon, and in some places well over $4/gallon.

Gas costs well over $6/gallon almost everywhere now in Europe.

Gas Prices At The Pump: Europeans Pay Almost Twice As Much As US Residents

 

[Nakosis]

Imo, a $1,000/month universal basic income benefit would likely buy some time for most anybody to find a job or work he/she greatly enjoys, but $1,000/month of income probably isn't enough income for most anybody to stop working or remain unemployed for awhile.

Agreed, but at some level the need to work is lessened. Mainly the need to work at those jobs that no one really wants to do but still needs to be done. Maybe when technology gets to the point where most of the heavy lifting gets done by machines/automation.

 

[Salvador]

He has addressed how he would generate that income. Primarily through a VAT (value added tax).

Yes...he has. ...

What is Universal Basic Income? - Andrew Yang for President

 

[Salvador]

Agreed, but at some level the need to work is lessened. Mainly the need to work at those jobs that no one really wants to do but still needs to be done. Maybe when technology gets to the point where most of the heavy lifting gets done by machines/automation.

Agreed...robotic technology/automation is a good reason why this universal basic income system makes total sense.

 

[Salvador]

.....The (value of) money eventually runs out.

"The federal government recently printed $4 trillion for the bank bailouts in its quantitative easing program with no inflation. Our plan for a Universal Basic Income uses mostly money already in the economy. In monetary economics, leading theory states that inflation is based on changes in the supply of money. Our UBI plan has minimal changes in the supply of money because it is funded by a Value-added Tax.

It is likely that some companies will increase their prices in response to people having more buying power, and a VAT would also increase prices marginally. However, there will still be competition between firms that will keep prices in check. Over time, technology will continue to decrease the prices of most goods where it is allowed to do so (e.g., clothing, media, consumer electronics, etc.). The main inflation we currently experience is in sectors where automation has not been applied due to government regulation or inapplicability – primarily housing, education, and healthcare. The real issue isn’t Universal Basic Income, it’s whether technology and automation will be allowed to reduce prices in different sectors."

What is Universal Basic Income? - Andrew Yang for President

 

[Salvador]

While people will be more inclined to make art, write novels, and work less, the amount of needed goods in society will decline.
.....
Here we are giving money for no value, no work. Disincentivizes the need to work, not completely, but to some degree. It assumes everyone will continue to work/produce at the same level but can't gurantee that. To fund this we will likely be looking at higher taxes.

Kind of like the idea of a perpetual motion machine. Thinking an economy can run on the exchange of money without energy/work being put into the system. The (value of) money eventually runs out.

"Decades of research on cash transfer programs have found that the only people who work fewer hours when given direct cash transfers are new mothers and kids in school. In several studies, high school graduation rates rose. In some cases, people even work more. Quoting a Harvard and MIT study, “we find no effects of [cash] transfers on work behavior.”

In our plan, each adult would receive only $12,000 a year. This is barely enough to live on in many places and certainly not enough to afford much in the way of experiences or advancement. To get ahead meaningfully, people will still need to get out there and work."

What is Universal Basic Income? - Andrew Yang for President

 

[Shadow Wolf]

Gas costs well over $6/gallon almost everywhere now in Europe.

Gas Prices At The Pump: Europeans Pay Almost Twice As Much As US Residents

That's not something we should aspire to as a goal or not care if we get that high. Gas prices just before the Recession, which still weren't quite that high in all places in America, really hurt. Gas taxes to fund road projects, public transportation, and other measures related to the use of vehicles and improving transportation options is what gas taxes should be used for.
For some people (a few of my own jobs) gas prices mater a lot because you have to drive in order to make a living. When your living requires you to rack up miles and pay for the gas out of your own funds, even with reimbursement increases in gas are definitely felt as you feel the squeeze of every cent increase you feel (and it adds up quick). My case management job, at 50 cents a mile and driving 80 - 100 miles a day, it would have cost me 2 extra dollars a day. At 720 extra dollars a year that is not tax deductible, that 50 cents extra would be a financial blow.

 

[Salvador]

That's not something we should aspire to as a goal or not care if we get that high. Gas prices just before the Recession, which still weren't quite that high in all places in America, really hurt. Gas taxes to fund road projects, public transportation, and other measures related to the use of vehicles and improving transportation options is what gas taxes should be used for.
For some people (a few of my own jobs) gas prices mater a lot because you have to drive in order to make a living. When your living requires you to rack up miles and pay for the gas out of your own funds, even with reimbursement increases in gas are definitely felt as you feel the squeeze of every cent increase you feel (and it adds up quick). My case management job, at 50 cents a mile and driving 80 - 100 miles a day, it would have cost me 2 extra dollars a day. At 720 extra dollars a year that is not tax deductible, that 50 cents extra would be a financial blow.

Keep in mind, if you were to get $12,000 of additional annual income from a universal basic income benefit along with hospital insurance coverage that you'd be glad you had in case you were hospitalized, your benefits would far exceed the costs of the $1/gallon in federal taxes you'd pay in order to help do your part in funding the freedom dividend (U.B.I.) and universal Medicare A hospital insurance. Right?