Looks like each year of age under 18 makes up about 1.33% of that, for a total of 77M residents under the age of 18.
Suppose you don't give a cent to anyone under 18 (which is not consistent with the UBI arguments I've seen, but whatever). 244.5M residents, times $12k, gives $2.9T.
Sure, that's "residents", not "citizens". Otoh, non-resident citizens might be entitled as well. Either way, how can you argue with "over 300M times over $10k gives over 3 trillion"?
Edit1: screwed up reading the graph, fixed above numbers.
Edit2: oh, just saw your comment suggesting "18 to 65" Fine, integrating by eyeball the graph from my link, I see 47 years at more than 1.2% of the pop per year, gives roughly 60% of the population in your age bracket. Now it's 200M recipients, or $2.4T.
Bi has two main savings, direct welfare and indirect welfare from a flat tax rate. The vast majority of workers make over to 9,225$ per year which is taxed at 10%. If they had a 39.6% tax that's 2730.6 new taxes to offset a BI of 12000$ for a net cost of -9269.4.
Next $9,226-$37,450 is at 15%, bump that to 39.6% and someone making 37,450 costs -9269.4 + 6943.104 = -2,326.30$.
Now if you continue this you find a medean income gets a bigger tax break than 12,000$ per year from the graduated tax rates. Also, with BI you don't need a standard deduction...
Net impact BI's are not simply whatever the BI is * the population.
Whether you call the way of paying a "claw-back", "flat-tax", or just straight up higher marginal rates, you need to pay for it somehow. In the end someone is getting less of each additional dollar they earn. All these need to add up to BI * the population.
BI makes a lot of implicit subsides explicit. If someone gets a tax break that adds up to 1k/month and you replace that with a check for 1k/month and do away with their tax break it's no net change in there cash flow. All that you’re doing is acknowledging a tax break is equivalent to a cash handout.
If we decide that 12,000$ is enough to live on then it calls into question why people get a larger payout from SS on top of a large tax break from low incomes.
Add it all up and a 12k BI costs less than SS + all other tax breaks and subsides. But, people rarely think of tax breaks as a subsidy so there is a lot of cognitive dissonance on this topic.
PS: Another way of looking at it is to consider the Canadian government spends less per person on healthcare than the US government while covering their entire population. Presumably the US government could do the exact same thing which makes it a worthwhile thing to consider.
I am agreeing with you that there's really no difference between a tax break and a subsidy.
However, I don't understand your next point. If you're saying a $12K BI wouldn't cost anything extra after getting rid of social security and all tax breaks in our tax system, well then maybe. But then you've made SS pensioners much poorer. And increased taxes on all the rest of the population. Also keep in mind the standard deduction is sort of like a BI for people who earn above a small threshold so if you get rid of it the net benefit of implementing a BI for low income people is even less than $12K.
BI sounds attractive in theory, but the math around it seems hand wavey. When you try to add up the numbers, there's no way around increasing taxes massively, or leaving large groups like the retired/disabled/unemployed worse off.
It might be impossible to make significant change without making some group worse off. My point is the net cost of BI is simply the added benifits to very low income people as long as your also removing other subsidies. And we are already handing out a lot of subsidies.
Which subsides to remove becomes an open question. EX: With BI do we still pay post doc's a small amount for living expences?
PS: If nothing else BI is an interesting comparison point for the current system. EX: You get more from SS as a married couple than an unmarried couple.
> Now if you continue this you find a medean income gets a bigger tax break than 12,000$ per year from the graduated tax rates.
You're going to struggle to sell BI on the basis that the person with a median income should make higher net tax contributions to subsidise those that won't work as well as those the present system determines "can't" work at the moment...
You're assuming the goal is to increase the post-tax income of all citizens by $12k, and all current benefits schemes are kept running.
In the UK, there's a tax free allowance of ~10k then an income tax rate of 20%. If we gave everyone in the country £2k/year and dropped the threshold to 0, nobody earning more than £10k would get any extra money. This is just an example that seemed nice because the figures were pretty clean.
Even this toy example would still require a 3% rise in taxes on all workers, decreasing the incentive to work. Also, in this case you literally wouldn't help any poor wage earners at all, since a minimum wage job in the UK is already making more than £10k. (and maybe hurting them, if you increase taxes across the board — if not, then high earners will be seeing a rate increase of closer to 4% -- so top rate will go from 45% to 49%).
If you start getting to more life-changing money, like £6k a year, you're starting to talk about >10% increase in taxes on the whole working age population. The top rate will go from 45% to over 55%. And again, it won't add a penny to anyone who's earning more £10k.
On top of that, some people would presumably drop out of the work force, and the higher tax rates would reduce the incentive to work, so your tax base will be even smaller. That'll push up the tax rates a few more percentage points at least.
My math:
Going along with the example, around 65% of the UK is working-age, and about 62% of working age people work. So 15 million people in the UK don't work at all, let's assume they don't earn anything. Assuming you restrict the BI benefit to just to working age population (no pensioners or children), there are suddenly 15 million people who didn't get anything before who now get BI, costing £30 billion pounds. The UK collects/spends about a £1 trillion, so that would be a 3% rise in spending.
My point was simply that the cost of any form of unconditional income is not "population * amount given out", as with that maths the cost of £2k/year to everyone of working age would be over 80 rather than 30 billion. I'm not arguing that even small forms of unconditional income would be free, but the system is not as expensive as made out.
> 3% rise in taxes on all workers
A 3% rise in tax revenue, how that affects people will depend on how it's applied (changes to tax on businesses, for example).
We must consider at least
* Knockon effects of changing the tax thresholds / amounts
* Benefits that are being paid out that no longer need to be
* Changes in employment when people have a more reliable safety net
For example, with the £6k case, we can now remove JSA, ESA, Incapacity Benefit and Income Support I think at the least. That's about £20B we can knock off, while increasing the amount those people receive and removing the problems that come with things like benefits sanctions. The UK spends about £85B on welfare other than the state pension, and any of that spending that gets people's income up to £6k is completely covered already.
I would like to see more involved analysis for specific figures to know what the true cost might be.
> (no pensioners or children)
Children, yes, but any pensioners claiming more than this sum in state pension don't cost more.
> Also, in this case you literally wouldn't help any poor wage earners at all, since a minimum wage job in the UK is already making more than £10k.
Full time workers, true, but several forms of benefits now are restricted to those working fewer than 16 hours. A 20yo could be earning less than £4300 (£5.13 * 16 * 52).
Not a great source, but precise figures here aren't too important:
321.5 million residents gives $3.86T.
Looks like each year of age under 18 makes up about 1.33% of that, for a total of 77M residents under the age of 18.
Suppose you don't give a cent to anyone under 18 (which is not consistent with the UBI arguments I've seen, but whatever). 244.5M residents, times $12k, gives $2.9T.
Sure, that's "residents", not "citizens". Otoh, non-resident citizens might be entitled as well. Either way, how can you argue with "over 300M times over $10k gives over 3 trillion"?
Edit1: screwed up reading the graph, fixed above numbers.
Edit2: oh, just saw your comment suggesting "18 to 65" Fine, integrating by eyeball the graph from my link, I see 47 years at more than 1.2% of the pop per year, gives roughly 60% of the population in your age bracket. Now it's 200M recipients, or $2.4T.