$1000/month Universal Basic Income - Andrew Yang

[middo]

I would have no issues with a UBI at $12k per adult. That would seem like a fair amount. I've not seen a UBI proposal that is capped at that amount, but if it were, I'd be fine with it - presuming we got some efficiency benefits out of it such as reduced bureaucracy expenses.

Unfortunately, in Australia it won't happen. We like our bureaucracy here. As well, a significant and growing chunk of our current social welfare bill is going to the disabled.

A guy I know is a disability care worker, one of his clients has severe cerebral palsy and retardation; recently he got an $18,000 wheelchair (those who sit in it twisted all day need it specially fitted to them), and the NDIS budget for him - carers, physio, etc - is $380,000 annually. If he were limited to $12k - well, since he needs other people to do things for him, he'd die in his own filth of starvation. He's an extreme case but there are plenty of lesser examples which would cost far in excess of $12k to care for.

A UBI works well, I think, for those able to work anyway, even if their current work is unpaid. It breaks down once you look into those disabled by birth, injury, disease or old age.

To my mind, a UBI is like a flat income tax - it's appealing in its simplicity, but would be pretty harsh on some.

I don't rhink anyone is suggesting the UBI would replace NDS payments.  That would be very short sighted.  It would replace basic welfare payments only.

[LennStar]

Plus, if I may add, administration has been working hard over the years to measure teacher performance in a variety of ways and provide some pay-for-performance compensation accordingly.

Yeah, and it has destroyed a lot of teaching (time spent filling out papers is not spend on teaching or learning) and added a lot of bullshit (negative value) jobs in administration.

We are talking about UBI, right? And does this involve economics? Or some other subjective "value"? Because I'm pretty sure I wasn't the first one to introduce economics into this debate.

But you were the first that saw "value to society" as purely monetary. I certainly talked about something like artists or nurses or care workers (who add a lot of value to society) and compared them to investment bankers (who do not produce anything, just increasing money-numbers using money-numbers, often destroying lifes (or helping that) in the process)

The list goes on. What makes you think that suddenly we've reached the point where a significant proportion of human labor has lost its value?

The simple fact that it already has lost it's "worth" for most areas? Even my mother had to help on the fields in school holidays, and she did not live in a farm family.
Storage workers? Ever seen a fully automated store house?
And so on.

The decrease in workforce participation for the lower education levels might be partly due to there being less people in those levels

Since we are talking about percentages here, the levels should be higher if the base is less.

The lower participation at the higher levels might have part to do with higher affluence (Mustachians who FIRE fit this bill) or an increasing desire to have a stay-at-home parent

Both points make no sense if you remember that stay-at-home mothers, were the man earned enough money were standard a few decades back. Again, the percentage should be higher not lower based on your argument.

ETA: I also think that employers would be able to pay much less while not being exploitative (since the UBI covers basic living expenses) and their employee's would likely perceive the lower pay as more beneficial since people tend to value discretionary income more than income that is needed to go toward necessitates.

Indeed, "low productive" low paid work would likely increase with an UBI (where automatization effort is not manageable) and a huge part of the rest would be automated a lot more (boring work where people now go away far more easy).

Interestingly, this was essentially the argument first used to create a social welfare programme. And it came from Bismarck, an arch-conservative. He said something to the effect of: if we do not throw them a few crumbs from the table, they may seize the whole loaf. Unfortunately it is in the nature of elites to destroy themselves by forgetting fundamental truths like this.

Interstingly ;) Bismarck made 2 laws: The Sozialgesetze (what you are talking about, sick and accident insurance and alter pensions) and the Sozialistengesetze (supress the worker movements). Butterbrot und Peitsche (butter bread and whip).

[pecunia]

Hmmmmm,.....so what would happen if the government started to supplement people's income?

I'm guessing more employers would respond like the owner of three Sonic restaurants near Columbus Ohio.

https://www.wxyz.com/news/national/all-employees-at-3-sonic-restaurants-in-ohio-left-their-jobs-together-shutting-down-the-businesses

This fellow cut the pay from $8 / hour to $ 4 / hour.  The rationale was that the difference could be made up by tips.  I've not known you were supposed to be tipping at Sonics.  I've not tipped at Burger King or any similar place.

Adding a universal basic income would allow this type of owner to not let their employees better themselves with a little extra money.  It would simply allow them to rationalize that their labor costs can be that much closer to zero.

Wal Mart already does that as many of their employees were on some sort of assistance.  Amazon is the same way.  Reality does not match the dream.

Perhaps we are approaching the second great era of some sort of feudalism.

[FIPurpose]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

[Boofinator]

The evidence shouldn't be necessary when (in my opinion) it is self-evident.

Okay, then you've stated your opinion. It seems you haven't convinced anyone of it. So it would seem that your opinion that it is self-evident is, itself, falsified by the experiment you just conducted in this thread.

Touché. To be fair I followed it up with analysis explaining my position. But maybe some other examples might be of help? Shall we compare the consequences from the loss of 10,000 primary caregivers to a) 10,000 doctors, b) 10,000 nuclear engineers, c) 10,000 renewable energy researchers, or d) 10,000 of whatever profession you admire most?

I'm not trying to suggest that there are classes of people less valuable than others. In fact, the concept of equality is such an important concept that it is enshrined in our constitution. I do want to make the point that there are some people who enrich our lives more than others, and on average these persons earn more money.

[JLee]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

[ender]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Healthcare is another major factor for this. I wonder how many companies get away with being terribad to work for purely because healthcare in the USA is so tied to employer.

[Boofinator]

We are talking about UBI, right? And does this involve economics? Or some other subjective "value"? Because I'm pretty sure I wasn't the first one to introduce economics into this debate.

But you were the first that saw "value to society" as purely monetary. I certainly talked about something like artists or nurses or care workers (who add a lot of value to society) and compared them to investment bankers (who do not produce anything, just increasing money-numbers using money-numbers, often destroying lifes (or helping that) in the process)

No comment on anything else, but I believe I made it clear that the value of a person is more than economic. However, to say that investment bankers add no value to society, and then plan to live off investment returns for 2/3 of one's life, is disingenuous.

[Mississippi Mudstache]

We are talking about UBI, right? And does this involve economics? Or some other subjective "value"? Because I'm pretty sure I wasn't the first one to introduce economics into this debate.

But you were the first that saw "value to society" as purely monetary. I certainly talked about something like artists or nurses or care workers (who add a lot of value to society) and compared them to investment bankers (who do not produce anything, just increasing money-numbers using money-numbers, often destroying lifes (or helping that) in the process)

No comment on anything else, but I believe I made it clear that the value of a person is more than economic. However, to say that investment bankers add no value to society, and then plan to live off investment returns for 2/3 of one's life, is disingenuous.

I don't contribute to society in any direct way through my work as an analyst. I do hope to leave work so I can contribute meaningfully to society by being a more attentive parent and through the pursuit of my artistic passions.

[Boofinator]

May I add my take on the Mustachian tea leaves located in this blog post: https://www.mrmoneymustache.com/2012/02/27/get-rich-with-good-old-fashioned-hard-work/

"You too can have the lifestyle of your dreams. And to get it, you will need to do an absolute shitload of insanely intense, ball-busting work. And here’s the best part: the insane work will bring you just as much happiness as the leisure time!"

A UBI is worth approximately $300,000 per person (looking at current costs for lifetime annuities). Now, a UBI isn't the lifestyle of anyone's dreams, but two UBIs ($600k) is enough for a lot of couples to retire off of with a Mustachian lifestyle. All of this without a single minute of insanely intense, ball-busting work.

[ender]

Most of the people I know that work the hardest are those that make the least amount of money.

[JLee]

Most of the people I know that work the hardest are those that make the least amount of money.

This is 100% true.

[Kris]

I think there must be an awful lot of people who think their jobs are a lot more important than they actually are.

[shenlong55]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could probably be lowered by more than what the UBI provides without their employees feeling worse off because they value discretionary funds more than funds for necessities.  Also, without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but are worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

[Boofinator]

We are talking about UBI, right? And does this involve economics? Or some other subjective "value"? Because I'm pretty sure I wasn't the first one to introduce economics into this debate.

But you were the first that saw "value to society" as purely monetary. I certainly talked about something like artists or nurses or care workers (who add a lot of value to society) and compared them to investment bankers (who do not produce anything, just increasing money-numbers using money-numbers, often destroying lifes (or helping that) in the process)

No comment on anything else, but I believe I made it clear that the value of a person is more than economic. However, to say that investment bankers add no value to society, and then plan to live off investment returns for 2/3 of one's life, is disingenuous.

I don't contribute to society in any direct way through my work as an analyst. I do hope to leave work so I can contribute meaningfully to society by being a more attentive parent and through the pursuit of my artistic passions.

In a modern economy, most workers don't contribute to society in a direct way. That's probably 10% of the population (the people who grow our food and build our houses). So most of us are likely contributing to society in an indirect way. But, you seem to emphasize the Mustachian dream: most of us want to quit jobs that we feel are worthless (whether it be true or not) and contribute to society in a more direct and meaningful way.

[ender]

But, you seem to emphasize the Mustachian dream: most of us want to quit jobs that we feel are worthless (whether it be true or not) and contribute to society in a more direct and meaningful way.

FWIW I don't think most people here have this dream as articulated here. For many high income folks here, continuing their career would be by far the easiest way to actually "contribute to society" given earning potential and the ability to give away considerable sums of money.

Most people want to be able to live their lives in a more meaningful way.

[JLee]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could probably be lowered by more than what the UBI provides without their employees feeling worse off because they value discretionary funds more than funds for necessities.  Also, without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but are worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

I believe both @FIPurpose and I were responding to this post:

Hmmmmm,.....so what would happen if the government started to supplement people's income?

I'm guessing more employers would respond like the owner of three Sonic restaurants near Columbus Ohio.

https://www.wxyz.com/news/national/all-employees-at-3-sonic-restaurants-in-ohio-left-their-jobs-together-shutting-down-the-businesses

This fellow cut the pay from $8 / hour to $ 4 / hour.  The rationale was that the difference could be made up by tips.  I've not known you were supposed to be tipping at Sonics.  I've not tipped at Burger King or any similar place.

Adding a universal basic income would allow this type of owner to not let their employees better themselves with a little extra money.  It would simply allow them to rationalize that their labor costs can be that much closer to zero.

Wal Mart already does that as many of their employees were on some sort of assistance.  Amazon is the same way.  Reality does not match the dream.

Perhaps we are approaching the second great era of some sort of feudalism.

[Bloop Bloop]

Most of the people I know that work the hardest are those that make the least amount of money.

This is 100% true.

Yeah, I guess all those baristas and McDonald's workers work soooo hard for their minimum wages. Damn that 6 hour shift at the cafe must be back-breaking.

Meanwhile those lazy doctors with their long stints in med school, those lazy lawyers having to get up at 4am to prepare for a trial, those lazy investment bankers getting good marks in business school. Man, what a life they must lead.

[JLee]

Most of the people I know that work the hardest are those that make the least amount of money.

This is 100% true.

Yeah, I guess all those baristas and McDonald's workers work soooo hard for their minimum wages. Damn that 6 hour shift at the cafe must be back-breaking.

Meanwhile those lazy doctors with their long stints in med school, those lazy lawyers having to get up at 4am to prepare for a trial, those lazy investment bankers getting good marks in business school. Man, what a life they must lead.

Note the sentence was "most of the people I know that work the hardest are those that make the least amount of money," not "most of the people I know that make the least amount of money work the hardest."

I dare any investment banker to go do a full work day building a house in 15° (that's -9° for you) weather and say it's easier than their job. ;)

[shenlong55]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could probably be lowered by more than what the UBI provides without their employees feeling worse off because they value discretionary funds more than funds for necessities.  Also, without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but are worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

I believe both @FIPurpose and I were responding to this post:

Hmmmmm,.....so what would happen if the government started to supplement people's income?

I'm guessing more employers would respond like the owner of three Sonic restaurants near Columbus Ohio.

https://www.wxyz.com/news/national/all-employees-at-3-sonic-restaurants-in-ohio-left-their-jobs-together-shutting-down-the-businesses

This fellow cut the pay from $8 / hour to $ 4 / hour.  The rationale was that the difference could be made up by tips.  I've not known you were supposed to be tipping at Sonics.  I've not tipped at Burger King or any similar place.

Adding a universal basic income would allow this type of owner to not let their employees better themselves with a little extra money.  It would simply allow them to rationalize that their labor costs can be that much closer to zero.

Wal Mart already does that as many of their employees were on some sort of assistance.  Amazon is the same way.  Reality does not match the dream.

Perhaps we are approaching the second great era of some sort of feudalism.

I may be mistaken, but I thought that post was responding to/continuing the discussion from this point...

ETA: I also think that employers would be able to pay much less while not being exploitative (since the UBI covers basic living expenses) and their employee's would likely perceive the lower pay as more beneficial since people tend to value discretionary income more than income that is needed to go toward necessitates.

Indeed, "low productive" low paid work would likely increase with an UBI (where automatization effort is not manageable) and a huge part of the rest would be automated a lot more (boring work where people now go away far more easy).

[maizefolk]

We are talking about UBI, right? And does this involve economics? Or some other subjective "value"? Because I'm pretty sure I wasn't the first one to introduce economics into this debate.

But you were the first that saw "value to society" as purely monetary. I certainly talked about something like artists or nurses or care workers (who add a lot of value to society) and compared them to investment bankers (who do not produce anything, just increasing money-numbers using money-numbers, often destroying lifes (or helping that) in the process)

No comment on anything else, but I believe I made it clear that the value of a person is more than economic. However, to say that investment bankers add no value to society, and then plan to live off investment returns for 2/3 of one's life, is disingenuous.

You appear to be shifting your position without acknowledging that your are doing so. Your previously articulated position was that "investment bankers provide more value to society than people working at jobs which pay less." That is quite a different view from the position articulated in this post, which I believe can be summarized as "investment bankers provide a non-zero and non-negative value to society."

I happen to agree with the latter, but that doesn't make the former true.

[FIPurpose]

@shenlong55 I was replying to @pecunia 's comment, but I can see how it is relevant to your's as well.

I don't think UBI will work if labor protections are removed. So I wouldn't be for UBI if minimum wage/ other labor protections are removed.

A part of Yang's UBI that also don't like is the removal of welfare programs. I would be more supportive of a UBI that is smaller, but runs along side of our current welfare programs.

[Boofinator]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could go down somewhat and without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but is worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

Nobody will work for $2-3/hour. It's insulting. (There's a famous experiment involving exactly this concept that I want to cite, but Google's not helping me out. It keeps thinking I want a job in experimental psychology. The gist of the experiment was that when people were asked to do a job for free, a little bit of money, or a lot of money, the little bit of money resulted in the least satisfaction.)

[shenlong55]

@shenlong55 I was replying to @pecunia 's comment, but I can see how it is relevant to your's as well.

I don't think UBI will work if labor protections are removed. So I wouldn't be for UBI if minimum wage/ other labor protections are removed.

A part of Yang's UBI that also don't like is the removal of welfare programs. I would be more supportive of a UBI that is smaller, but runs along side of our current welfare programs.

Interesting.  Why do you think a UBI wouldn't work if labor protections are removed?

[shenlong55]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could go down somewhat and without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but is worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

Nobody will work for $2-3/hour. It's insulting. (There's a famous experiment involving exactly this concept that I want to cite, but Google's not helping me out. It keeps thinking I want a job in experimental psychology. The gist of the experiment was that when people were asked to do a job for free, a little bit of money, or a lot of money, the little bit of money resulted in the least satisfaction.)

Were all of the participants basic needs being met outside of the job offer at the time of the expirement?

[Boofinator]

We are talking about UBI, right? And does this involve economics? Or some other subjective "value"? Because I'm pretty sure I wasn't the first one to introduce economics into this debate.

But you were the first that saw "value to society" as purely monetary. I certainly talked about something like artists or nurses or care workers (who add a lot of value to society) and compared them to investment bankers (who do not produce anything, just increasing money-numbers using money-numbers, often destroying lifes (or helping that) in the process)

No comment on anything else, but I believe I made it clear that the value of a person is more than economic. However, to say that investment bankers add no value to society, and then plan to live off investment returns for 2/3 of one's life, is disingenuous.

You appear to be shifting your position without acknowledging that your are doing so. Your previously articulated position was that "investment bankers provide more value to society than people working at jobs which pay less." That is quite a different view from the position articulated in this post, which I believe can be summarized as "investment bankers provide a non-zero and non-negative value to society."

I happen to agree with the latter, but that doesn't make the former true.

I don't think my position has shifted, though at times it has not been articulated well. Social value can be extremely hard to define. But I posit (and maybe this is too strong a word; believe?) that it correlates with income (or economic value).

Regardless of what I've stated in my posts, even though I'm of the opinion BUI is not a policy I would vote for, I am very much pro-democracy. Therefore, if such a law were to be passed, I'd be fine with it as at the very least an experiment in human psychology. By the way, I came across this image and think it helps to explain to some degree the difference of opinions on BUI. I think of myself as falling on the individualist side of the spectrum.

https://en.wikipedia.org/wiki/File:SVO_Ring.pdf

[John Galt incarnate!]

In a modern economy, most workers don't contribute to society in a direct way.

Agree.

For the most part,  taxation orders  modern societies.

[Telecaster]

@shenlong55
A part of Yang's UBI that also don't like is the removal of welfare programs. I would be more supportive of a UBI that is smaller, but runs along side of our current welfare programs.

I believe the way Yang's program would work is that you would get the greater of $12,000 or the existing benefit.

[Boofinator]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could go down somewhat and without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but is worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

Nobody will work for $2-3/hour. It's insulting. (There's a famous experiment involving exactly this concept that I want to cite, but Google's not helping me out. It keeps thinking I want a job in experimental psychology. The gist of the experiment was that when people were asked to do a job for free, a little bit of money, or a lot of money, the little bit of money resulted in the least satisfaction.)

Were all of the participants basic needs being met outside of the job offer at the time of the expirement?

More than likely. How do you think that criterion would affect the results/conclusions of the experiment? And secondarily, is there much evidence to support that a significant proportion of the U.S. population isn't having their basic needs met?

[JLee]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could go down somewhat and without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but is worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

Nobody will work for $2-3/hour. It's insulting. (There's a famous experiment involving exactly this concept that I want to cite, but Google's not helping me out. It keeps thinking I want a job in experimental psychology. The gist of the experiment was that when people were asked to do a job for free, a little bit of money, or a lot of money, the little bit of money resulted in the least satisfaction.)

Were all of the participants basic needs being met outside of the job offer at the time of the expirement?

More than likely. How do you think that criterion would affect the results/conclusions of the experiment? And secondarily, is there much evidence to support that a significant proportion of the U.S. population isn't having their basic needs met?

https://www.feedingamerica.org/hunger-in-america/facts

[Boofinator]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Healthcare is another major factor for this. I wonder how many companies get away with being terribad to work for purely because healthcare in the USA is so tied to employer.

I agree completely. Tying reasonably priced health insurance to employment is a horrible system. ACA has gone a long way toward rectifying this.

[shenlong55]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could go down somewhat and without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but is worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

Nobody will work for $2-3/hour. It's insulting. (There's a famous experiment involving exactly this concept that I want to cite, but Google's not helping me out. It keeps thinking I want a job in experimental psychology. The gist of the experiment was that when people were asked to do a job for free, a little bit of money, or a lot of money, the little bit of money resulted in the least satisfaction.)

Were all of the participants basic needs being met outside of the job offer at the time of the expirement?

More than likely. How do you think that criterion would affect the results/conclusions of the experiment? And secondarily, is there much evidence to support that a significant proportion of the U.S. population isn't having their basic needs met?

I don't think I said anything about a significant portion of the U.S. population not having their basic needs met...  I was asking if the experiment participants basic needs were met in addition to/prior to the $2-3/hour.  That would be necessary for it to apply to a UBI scenario, because $2-3/hour that can be spent on luxuries is not the same as $2-3/hour that must be spent on necessities.  And come to think of it, I think you must be mistaken about that study since the tipped minimum wage in America is currently only $2.13.  I'm fairly certain that at least one person in America is being paid that and no more and I'm sure that the majority of the money that they make has to go to necessities.

[Davnasty]

I would think it's the opposite. 12k in your hand actually gives you more leveraging power. You can more easily demand that you won't work for $4/hr. You can leave a bad situation because you know you'll be alright.

No actually less people working would be labor costs would go up. There would be less people willing forced to do the work, and the actual value of that labor will go up. Companies would have to start competing among a smaller pool of applicants.

Absolutely. We have an entire thread devoted to "FU Money" stories about people who are not so reliant on their jobs to live that they can tell shitty employers to fuck off.  Pecunia somehow came up with the opposite conclusion, i.e. if you have enough money for basic needs you're willing to accept shittier working conditions.  That makes no sense at all.

Ugh.  I believe it was a misunderstanding based on something I said.  I wasn't saying employees would accept shittier working conditions.  I was saying employers would fail if they tried to subject employees to shitty conditions because their employees would just leave.  That would make most labor laws unnecessary, including minimum wage, which would allow some people to work for less than the current minimum.  Yes, wages for jobs that nobody wants to do would increase (as they should), but wages at other jobs could go down somewhat and without a minimum wage more jobs could be created that wouldn't have been worth paying someone $7-15/hour for but is worth paying someone $2-3/hour.  People who don't have a desire for massive amounts of discretionary income (like many of the followers of MMM, for instance) would likely find those jobs worthwhile.

Nobody will work for $2-3/hour. It's insulting. (There's a famous experiment involving exactly this concept that I want to cite, but Google's not helping me out. It keeps thinking I want a job in experimental psychology. The gist of the experiment was that when people were asked to do a job for free, a little bit of money, or a lot of money, the little bit of money resulted in the least satisfaction.)

Were all of the participants basic needs being met outside of the job offer at the time of the expirement?

More than likely. How do you think that criterion would affect the results/conclusions of the experiment? And secondarily, is there much evidence to support that a significant proportion of the U.S. population isn't having their basic needs met?

To your second point, I don't think so. But their basic needs are met because they work, someone who cares for them works, or they receive welfare that is tied to their other income. In the hypothetical scenario we're discussing they would have their basic needs met regardless of their employment so that changes the scenario. I think the study your referencing* just isn't very useful in answering the question of: would anyone want to work for wages in the $2-3 range?

The most similar scenario I can think of (which admittedly is still quite different) is prison. Inmates have the opportunity to work at rates in the $0.25-$1.00 range and take advantage of it. Of course, their situation doesn't allow for many leisure activities as an alternative so it may just be that they choose work over boredom and they're desperate to save up for when they're released.

It's hard to imagine myself in this scenario but honestly I think I would work at $3/hour IF I could work as much or as little as I wanted. A full time job at that rate? UBI would be plenty.

*I think I've seen this study or one that is similar. I can't find it either but I'm almost certain that it was referenced in Claudia Hammond's Mind over Money.

[Boofinator]

The fallacy in your example is that there are a lot more primary caregivers than investment bankers. So if caregivers disappeared as an entire class, than yes, I agree, it would be a massive loss to society. But if there was a one-to-one loss, investment bankers would cause a larger economic disruption.

I feel that UBI provides perverse incentives not to work for those who don't know the value of work to begin with. It has nothing to do with the rich, because we are all fucking rich this day-and-age. It has to do with not having to earn anything in your lifetime.

Seems a 100% inheritance tax would be fitting, then.

You're agreeing with me, btw. ;)

I applaud the train of logic, but I believe there is a difference in degree between the two based on the familiarity in the relationship. The difference between an estate (or inheritance) tax and a BUI is the same as the difference between your relationship to your family versus your relationship to your nation. Your family has the responsibility of raising, caring for, teaching, cleaning, etc. for their children (which I think an inheritance can serve as a family gift), whereas the state is responsible for "the general welfare".

For the record I am for high estate taxes over a certain dollar threshold (similar to how estate taxes currently are, or at least supposed to be). What the right threshold should be is a tough question to answer, as there are a significant number of variables involved (most importantly number and ages of children & spouse, and location-dependent cost-of-living).

One other thing to consider: Would you also eliminate life insurance? My understanding is that as estate taxes get high, life insurance is then used by many to maximize the transfer of wealth across generations.

[EnjoyIt]

The fallacy in your example is that there are a lot more primary caregivers than investment bankers. So if caregivers disappeared as an entire class, than yes, I agree, it would be a massive loss to society. But if there was a one-to-one loss, investment bankers would cause a larger economic disruption.

I feel that UBI provides perverse incentives not to work for those who don't know the value of work to begin with. It has nothing to do with the rich, because we are all fucking rich this day-and-age. It has to do with not having to earn anything in your lifetime.

Seems a 100% inheritance tax would be fitting, then.

You're agreeing with me, btw. ;)

I applaud the train of logic, but I believe there is a difference in degree between the two based on the familiarity in the relationship. The difference between an estate (or inheritance) tax and a BUI is the same as the difference between your relationship to your family versus your relationship to your nation. Your family has the responsibility of raising, caring for, teaching, cleaning, etc. for their children (which I think an inheritance can serve as a family gift), whereas the state is responsible for "the general welfare".

For the record I am for high estate taxes over a certain dollar threshold (similar to how estate taxes currently are, or at least supposed to be). What the right threshold should be is a tough question to answer, as there are a significant number of variables involved (most importantly number and ages of children & spouse, and location-dependent cost-of-living).

One other thing to consider: Would you also eliminate life insurance? My understanding is that as estate taxes get high, life insurance is then used by many to maximize the transfer of wealth across generations.

I don't understand why people are so adamantly at taxing large estates at death  History shows that money disappears in about 2 generations anyways.  When people get money with little to no effort they have no internal value of that money and piss it away just like almost every lottery winner.

[JLee]

The fallacy in your example is that there are a lot more primary caregivers than investment bankers. So if caregivers disappeared as an entire class, than yes, I agree, it would be a massive loss to society. But if there was a one-to-one loss, investment bankers would cause a larger economic disruption.

I feel that UBI provides perverse incentives not to work for those who don't know the value of work to begin with. It has nothing to do with the rich, because we are all fucking rich this day-and-age. It has to do with not having to earn anything in your lifetime.

Seems a 100% inheritance tax would be fitting, then.

You're agreeing with me, btw. ;)

I applaud the train of logic, but I believe there is a difference in degree between the two based on the familiarity in the relationship. The difference between an estate (or inheritance) tax and a BUI is the same as the difference between your relationship to your family versus your relationship to your nation. Your family has the responsibility of raising, caring for, teaching, cleaning, etc. for their children (which I think an inheritance can serve as a family gift), whereas the state is responsible for "the general welfare".

For the record I am for high estate taxes over a certain dollar threshold (similar to how estate taxes currently are, or at least supposed to be). What the right threshold should be is a tough question to answer, as there are a significant number of variables involved (most importantly number and ages of children & spouse, and location-dependent cost-of-living).

One other thing to consider: Would you also eliminate life insurance? My understanding is that as estate taxes get high, life insurance is then used by many to maximize the transfer of wealth across generations.

I would argue that "the general welfare" includes ensuring that the population has medical care, housing, and food.

I fundamentally disagree with that first sentence. What the value of a dollar means (in the figurative sense*) is that society doesn't owe you anything unless you provide something of value in return. Now, your parents might feed and care for you as a young person, and society as a whole realizes that they should encourage the well-being of young people as future generators of wealth (investments, you might call them). But once you reach adult age, very few members of society are interested in shouldering people who provide no value in return. And it has little to do with being smart or privileged (ask all of the illegal immigrants begging to get in to the United States).

You've specifically argued that people are valued for their wealth generation ability. People who inherit massive fortunes aren't necessarily generating wealth - they get it simply because they exist, and you're directly implying that people who are not generating wealth do not have societal value.  That is a chilling perspective if you think about it.

I feel that UBI wealth inheritance provides perverse incentives not to work for those who don't know the value of work to begin with. It has nothing to do with the rich, because we are all fucking rich this day-and-age. It has to do with not having to earn anything in your lifetime.

;)

[Cool Friend]

Food for thought

https://www.jacobinmag.com/2011/12/four-futures/

[Boofinator]

<snip>

I don't think I said anything about a significant portion of the U.S. population not having their basic needs met...  I was asking if the experiment participants basic needs were met in addition to/prior to the $2-3/hour.  That would be necessary for it to apply to a UBI scenario, because $2-3/hour that can be spent on luxuries is not the same as $2-3/hour that must be spent on necessities.  And come to think of it, I think you must be mistaken about that study since the tipped minimum wage in America is currently only $2.13.  I'm fairly certain that at least one person in America is being paid that and no more and I'm sure that the majority of the money that they make has to go to necessities.

The income for those making the tipped minimum wage also includes tips. But, I agree that there are probably some people living off those kinds of wages, particularly some illegal immigrants.

[Boofinator]

Food for thought

https://www.jacobinmag.com/2011/12/four-futures/

Interesting and fun read. I don't see scarcity going away any time soon (at least in some shape or form), and capital as far as I can tell seems to have been the best method to address the inherent challenges of scarcity. Hopefully there remains a good mix of egalitarianism and hierarchy.

[Boofinator]

I would argue that "the general welfare" includes ensuring that the population has medical care, housing, and food.

I don't think at the onset of the Constitution, those specific items were intended, but rather the improvement in public infrastructure that would allow for an increase in abundance (take, for example, the Erie Canal). I think the times have changed to the point that those three items, at least at a basic level, fall under the modern conception of general welfare. So I agree.

You've specifically argued that people are valued for their wealth generation ability. People who inherit massive fortunes aren't necessarily generating wealth - they get it simply because they exist, and you're directly implying that people who are not generating wealth do not have societal value.  That is a chilling perspective if you think about it.

I've tried to provide context to "societal value" in several of my posts. I feel probably 99.99% of people provide societal value, even those that do not generate wealth.

I feel that UBI wealth inheritance provides perverse incentives not to work for those who don't know the value of work to begin with. It has nothing to do with the rich, because we are all fucking rich this day-and-age. It has to do with not having to earn anything in your lifetime.

;)

Yes, there will be people who inherit wealth who are worthless to society (a few pop in my mind off the bat). But I think most people who inherit wealth still earn most of their own money.

[Telecaster]

I don't understand why people are so adamantly at taxing large estates at death  History shows that money disappears in about 2 generations anyways.  When people get money with little to no effort they have no internal value of that money and piss it away just like almost every lottery winner.

Society has to raise tax revenue somehow, right?  And I think everyone agrees  we want taxes to be as fair as possible.  Of course, everyone has a different idea about what "fair" means, but there should be some broad areas of agreement.   The way we have collectively decide to raise the vast majority of tax revenue is from income and payroll taxes.   So each of us when we get up and go to work earning a productive living by framing houses or teaching school, some of that income gets diverted to the government.   And even if you don't earn much income at all--maybe flipping burgers--you still have to pay payroll taxes.    But income and payroll taxes do represent a portion of your productive life's energy, so there is a real cost beyond just the dollar amount.  Similarly, gains from investments represent your willingness to take risk and and hopefully wise decision making.   Society values the notion of "retirement" and being able to live comfortably in our elder years, so defer, not eliminate but defer, taxes on things like 401(k)s and IRAs.   I'm fine with this by the way. 

Inheritance income represents what to the person receiving it?   Nothing.  They didn't break a sweat or reduce their lifestyle by maxing our their 401(k).  It isn't for retirement.
 It didn't cost them a single minute of their lives.  But still they should pay no tax?   How come it is fair to tax retirement accounts that represent years of our savings, for but not fair to tax estates that the recipient sacrificed nothing for?  How come if you provide skilled nursing care or design buildings for a living it is fair to pay tax on that but inheritance is tax free just because of who your parents were?

On top of that, most large estates are in the form of unrealized capital gains.  So that money has never been taxed.   So it is fair to not ever pay tax on all this money, so instead we have to charge extra on the doctor who spends her days curing cancer.  And we need to tax retirement accounts and in some cases even Social Security to make up the difference.   Does that make sense to anyone?   Does that sound fair or smart?     

 

[EnjoyIt]

I don't understand why people are so adamantly at taxing large estates at death  History shows that money disappears in about 2 generations anyways.  When people get money with little to no effort they have no internal value of that money and piss it away just like almost every lottery winner.

Society has to raise tax revenue somehow, right?  And I think everyone agrees  we want taxes to be as fair as possible.  Of course, everyone has a different idea about what "fair" means, but there should be some broad areas of agreement.   The way we have collectively decide to raise the vast majority of tax revenue is from income and payroll taxes.   So each of us when we get up and go to work earning a productive living by framing houses or teaching school, some of that income gets diverted to the government.   And even if you don't earn much income at all--maybe flipping burgers--you still have to pay payroll taxes.    But income and payroll taxes do represent a portion of your productive life's energy, so there is a real cost beyond just the dollar amount.  Similarly, gains from investments represent your willingness to take risk and and hopefully wise decision making.   Society values the notion of "retirement" and being able to live comfortably in our elder years, so defer, not eliminate but defer, taxes on things like 401(k)s and IRAs.   I'm fine with this by the way. 

Inheritance income represents what to the person receiving it?   Nothing.  They didn't break a sweat or reduce their lifestyle by maxing our their 401(k).  It isn't for retirement.
 It didn't cost them a single minute of their lives.  But still they should pay no tax?   How come it is fair to tax retirement accounts that represent years of our savings, for but not fair to tax estates that the recipient sacrificed nothing for?  How come if you provide skilled nursing care or design buildings for a living it is fair to pay tax on that but inheritance is tax free just because of who your parents were?

On top of that, most large estates are in the form of unrealized capital gains.  So that money has never been taxed.   So it is fair to not ever pay tax on all this money, so instead we have to charge extra on the doctor who spends her days curing cancer.  And we need to tax retirement accounts and in some cases even Social Security to make up the difference.   Does that make sense to anyone?   Does that sound fair or smart?     

Nice comment though I think you may have a few misconceptions:
1) You say we need to raise more taxes and I say we don't.  Who is right?

2) Money that is handed down to heirs was once earned income which had taxes paid and then invested.  If in a taxable account those investments grew that shed some dividends or profit sharing on which taxes had to be paid.  Therefor this money has been taxed already and more than once.  If it is in a 401k or IRA, that money goes to the heirs and they will have to take RMDs and pay taxes at the marginal rate. 

3) Just about every family that leaves large amounts of wealth to heirs, over 2 generations the heirs squander that money which goes back into circulation and taxes are paid.  The money is not lost forever.

4) If we did so choose to levy taxes on estates further, those same rich people would create loopholes and ways to get around those taxes.  You ever meet a child of rich parents that are trying to divest some of their wealth to stay below the estate tax?  These kids receive $28k a year in tax free gifts.  If married they receive $56k a year.  Add another $56k for each child they have.  All this before creating a trust to help minimize taxes further.

5) Telecaster, it is very easy to sit back and say, lets tax that person that made more money than me.  So easy to say, those kids didn't earn it, why do they deserve it?  Well, why is the government more deserving of that money as compared to the progeny of the initial earner?  How is that even remotely fair? Again, in 2 generations that money will be taxed again anyway so who cares?

[maizefolk]

I don't understand why people are so adamantly at taxing large estates at death  History shows that money disappears in about 2 generations anyways. When people get money with little to no effort they have no internal value of that money and piss it away just like almost every lottery winner.

There are different reasons, but partially because while your bolded statement is part of the popular consciousness in the USA, it's not supported by either history or data.

A study looking at estate taxes in Wisconsin* found that, while there is slow returns towards the average, family wealth erodes away (relative to average net worth so correcting for both inflation and growth in quality of life/average income), at a rate of only about 16% per generation. So after 2 generations, on average, the heirs will still have 70% of their grandparents surplus wealth above the population mean. After 5 generations 40%, and after 10 generations 17.5%. Folks have also found similar results from looking at wealthy families in England over five generations,** and in societies around the world.***

So take the Walton family: The child of Sam Walton each have a net worth ~500,000x that of the median american ($50B and $100k respectively). In 10 generations (300 years from now), we would expect that fortune to have eroded to 87,540x the average american's net worth (if america still exists in six centuries). The equivalent of a $8.7B fortune today. 

I suspect the above is a big part of why so many people are in favor of large estate taxes. Another big chunk is that, if I have to pay $X in taxes to support our society anyway, isn't it far more preferable to pay more them over my dead body and less of them when I'm alive?

*Original article: https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6237.8402004 Popular press coverage: https://www.bloomberg.com/opinion/articles/2018-07-10/rich-kids-inheritances-will-last-many-generations

**Source: https://onlinelibrary.wiley.com/doi/abs/10.1111/ecoj.12165

***Source: https://press.princeton.edu/titles/10181.html (Unfortunately a paper book, but here is a review that discusses a lot of the key points and data sources: http://insidestory.org.au/the-remarkable-persistence-of-power-and-privilege/)

[Telecaster]

Nice comment though I think you may have a few misconceptions:
1) You say we need to raise more taxes and I say we don't.  Who is right?

I didn't say "more."  I said society needs to raise money through taxes.  I don't see that statement as controversial. 

2) Money that is handed down to heirs was once earned income which had taxes paid and then invested.  If in a taxable account those investments grew that shed some dividends or profit sharing on which taxes had to be paid.  Therefor this money has been taxed already and more than once.  If it is in a 401k or IRA, that money goes to the heirs and they will have to take RMDs and pay taxes at the marginal rate. 

Not true.  The three richest individuals in the United States are Bill Gates, Jeff Bezos, and Warren Buffett.   Each of those men has almost their entire net worth in the form of unrealized capital gains.   See also the Walton family, all of which become billionaires through unrealized capital gains of Wal-Mart stock. 

3) Just about every family that leaves large amounts of wealth to heirs, over 2 generations the heirs squander that money which goes back into circulation and taxes are paid.  The money is not lost forever.

So why not tax it?  It seems like taxing money that will just be wasted anyway is far, far, far preferable over taxing money that is used to pay the mortgage or your kid's college tuition.   

4) If we did so choose to levy taxes on estates further, those same rich people would create loopholes and ways to get around those taxes.  You ever meet a child of rich parents that are trying to divest some of their wealth to stay below the estate tax?  These kids receive $28k a year in tax free gifts.  If married they receive $56k a year.  Add another $56k for each child they have.  All this before creating a trust to help minimize taxes further.

How do you know?  Loopholes are created by tax law.  Loopholes can be closed by tax law.  And even if there were loopholes, what is the basic objection to taxing money people earn but not taxing money people don't earn?

Is there something magic about unearned money that somehow makes it more pure than money you had to work for? 

5) Telecaster, it is very easy to sit back and say, lets tax that person that made more money than me.  So easy to say, those kids didn't earn it, why do they deserve it?  Well, why is the government more deserving of that money as compared to the progeny of the initial earner?  How is that even remotely fair?

This is a red herring AND a strawman.  I didn't say any those things. 

Your question is about taxes in general that you can apply to any tax you choose.   For example, why does is the government more deserving of money instead of the oncologist who earned it by curing cancer?   Why does the government deserve a share of a kid's salary who spent his summer flipping burgers?  I'm simply comparing estate taxes with income taxes.

Since there are now, and will always be taxes, to me it makes sense that taxes be fair.   I've never heard a good argument why earned income should be taxed and unearned income should be tax free.   You statement that most people simply waste windfalls isn't a good argument that windfalls should get preferable tax treatment over wages.  A lot of people waste wages as well.   

[EnjoyIt]

I suspect the above is a big part of why so many people are in favor of large estate taxes. Another big chunk is that, if I have to pay $X in taxes to support our society anyway, isn't it far more preferable to pay more them over my dead body and less of them when I'm alive?

Well, I'm in.  Sign me up.  Stop taxing me immediately and I will donate 50% of my fortune to the United States treasury.

[maizefolk]

I suspect the above is a big part of why so many people are in favor of large estate taxes. Another big chunk is that, if I have to pay $X in taxes to support our society anyway, isn't it far more preferable to pay more them over my dead body and less of them when I'm alive?

Well, I'm in.  Sign me up.  Stop taxing me immediately and I will donate 50% of my fortune to the United States treasury.

Sold. I personally will collect no taxes from you from now until the days we each die.

[EnjoyIt]

Nice comment though I think you may have a few misconceptions:
1) You say we need to raise more taxes and I say we don't.  Who is right?

I didn't say "more."  I said society needs to raise money through taxes.  I don't see that statement as controversial. 

2) Money that is handed down to heirs was once earned income which had taxes paid and then invested.  If in a taxable account those investments grew that shed some dividends or profit sharing on which taxes had to be paid.  Therefor this money has been taxed already and more than once.  If it is in a 401k or IRA, that money goes to the heirs and they will have to take RMDs and pay taxes at the marginal rate. 

Not true.  The three richest individuals in the United States are Bill Gates, Jeff Bezos, and Warren Buffett.   Each of those men has almost their entire net worth in the form of unrealized capital gains.   See also the Walton family, all of which become billionaires through unrealized capital gains of Wal-Mart stock. 

3) Just about every family that leaves large amounts of wealth to heirs, over 2 generations the heirs squander that money which goes back into circulation and taxes are paid.  The money is not lost forever.

So why not tax it?  It seems like taxing money that will just be wasted anyway is far, far, far preferable over taxing money that is used to pay the mortgage or your kid's college tuition.   

4) If we did so choose to levy taxes on estates further, those same rich people would create loopholes and ways to get around those taxes.  You ever meet a child of rich parents that are trying to divest some of their wealth to stay below the estate tax?  These kids receive $28k a year in tax free gifts.  If married they receive $56k a year.  Add another $56k for each child they have.  All this before creating a trust to help minimize taxes further.

How do you know?  Loopholes are created by tax law.  Loopholes can be closed by tax law.  And even if there were loopholes, what is the basic objection to taxing money people earn but not taxing money people don't earn?

Is there something magic about unearned money that somehow makes it more pure than money you had to work for? 

5) Telecaster, it is very easy to sit back and say, lets tax that person that made more money than me.  So easy to say, those kids didn't earn it, why do they deserve it?  Well, why is the government more deserving of that money as compared to the progeny of the initial earner?  How is that even remotely fair?

This is a red herring AND a strawman.  I didn't say any those things. 

Your question is about taxes in general that you can apply to any tax you choose.   For example, why does is the government more deserving of money instead of the oncologist who earned it by curing cancer?   Why does the government deserve a share of a kid's salary who spent his summer flipping burgers?  I'm simply comparing estate taxes with income taxes.

Since there are now, and will always be taxes, to me it makes sense that taxes be fair.   I've never heard a good argument why earned income should be taxed and unearned income should be tax free.   You statement that most people simply waste windfalls isn't a good argument that windfalls should get preferable tax treatment over wages.  A lot of people waste wages as well.

You are right we will always argue on what is fair.  For example I think it is fair to only have a consumption tax which would exclude taxation of essentials such as food, shelter and medicine.  Everything else gets taxed and is progressive as people who have more will spend more and therefor will be taxed more.  It also incentivizes saving which would be great for all of society.  But not enough people agree with me and we have the current system we have now.

Bezo's has a lot of wealth in Amazon but is also very highly compensated by Amazon and pays a hell of a lot more in taxes than you and I will in our entire lifetime.  How much more do we need Bezo's to pay? 

You for some reason are in the believe that there is no such thing as family money.  Bezo's earned it and it only belongs to him.  Well, his Ex-Wife begs to differ and so do his kids.

Loopholes will always exist. We can make taxes more complicated and the only people winning are the accountants and lawyers. 

That is not a straw man example.  It is my depiction of people who want to tax other people's money.  Even those who say they are willing to pay more themselves know perfectly well the family making more money will be paying in extra into the system.  As for the oncologist, she gets paid by the work she does so I am not sure I understand your example.

[EnjoyIt]

I suspect the above is a big part of why so many people are in favor of large estate taxes. Another big chunk is that, if I have to pay $X in taxes to support our society anyway, isn't it far more preferable to pay more them over my dead body and less of them when I'm alive?

Well, I'm in.  Sign me up.  Stop taxing me immediately and I will donate 50% of my fortune to the United States treasury.

Sold. I personally will collect no taxes from you from now until the days we each die.

You are a scholar and a gentleman.  Now to convince the IRS of the same.

[Telecaster]

You are right we will always argue on what is fair.  For example I think it is fair to only have a consumption tax which would exclude taxation of essentials such as food, shelter and medicine.  Everything else gets taxed and is progressive as people who have more will spend more and therefor will be taxed more.  It also incentivizes saving which would be great for all of society.  But not enough people agree with me and we have the current system we have now.

That's fine, but we're talking about if estates should be taxed or not.  This is an issue you raised.  Since you raised it, let's discuss it.

Bezo's has a lot of wealth in Amazon but is also very highly compensated by Amazon and pays a hell of a lot more in taxes than you and I will in our entire lifetime.  How much more do we need Bezo's to pay?

 

That's certainly a fair question, but is also a red herring.  Bezos doesn't pay the estate tax.  His heirs do.  His heirs weren't highly compensated by Amazon.  It is entirely fair to ask why just being an heir of Bezos entities you to a lower tax rate than being a fire fighter.     Do you have an answer to that question?  I haven't seen it so far. 

And again, almost the entirety of Bezos' fortune is in the form of unrealized capital gains.  Is there a good reason why you, EnJoyIT should pay capital gains on your earnings but if I inherit the same amount of money then no taxes should apply?

I note that you continually dodge the central question: Why should inherited money be untaxed but money that is earned by honest labor taxed the most heavily?

[EnjoyIt]

You are right we will always argue on what is fair.  For example I think it is fair to only have a consumption tax which would exclude taxation of essentials such as food, shelter and medicine.  Everything else gets taxed and is progressive as people who have more will spend more and therefor will be taxed more.  It also incentivizes saving which would be great for all of society.  But not enough people agree with me and we have the current system we have now.

That's fine, but we're talking about if estates should be taxed or not.  This is an issue you raised.  Since you raised it, let's discuss it.

Bezo's has a lot of wealth in Amazon but is also very highly compensated by Amazon and pays a hell of a lot more in taxes than you and I will in our entire lifetime.  How much more do we need Bezo's to pay?

 

That's certainly a fair question, but is also a red herring.  Bezos doesn't pay the estate tax.  His heirs do.  His heirs weren't highly compensated by Amazon.  It is entirely fair to ask why just being an heir of Bezos entities you to a lower tax rate than being a fire fighter.     Do you have an answer to that question?  I haven't seen it so far. 

And again, almost the entirety of Bezos' fortune is in the form of unrealized capital gains.  Is there a good reason why you, EnJoyIT should pay capital gains on your earnings but if I inherit the same amount of money then no taxes should apply?

I note that you continually dodge the central question: Why should inherited money be untaxed but money that is earned by honest labor taxed the most heavily?

I don’t think I have dodged it. Estate tax has been taxes while building the estate or will be taxed in the future as the estate is sold for living expenses by the heirs. Bezos has paid millions in taxes. Amazon has paid millions in taxes as well. How much more taxes must we take?

And again, why do you think the government is more fitting of Bezos estate than his own family?  Even if it takes 209 years for his wealth to disipate taxes will he collected.