So....not really universal. UBI will only work well in addition to existing aid programs, not as a replacement for them. The only exception is when the UBI can replace a means-tested program such...
those exempt from receiving monthly payments are those already using Medi-Cal, County Medical Services Program, CalFresh, CalWorks or Unemployment Insurance.
So....not really universal. UBI will only work well in addition to existing aid programs, not as a replacement for them.
The only exception is when the UBI can replace a means-tested program such as food stamps our housing voucher for cash. This allows individuals to allocate money as needed, and not be limited by limits on either. That said, they must be like-for like, as in the cash value of UBI is equivalent to the total value both would provide, not as a lower-amount alternative.
Public housing programs would still need to exist in order to provide competition from increasing rents.
The worst case for UBI is replacing things like medical care, as medical care in the USA is broken as hell, and until that is fixed, it's impossible to provide a UBI to cover sufficient medical needs.
I agree that we shouldn't make people choose between medical insurance and an extra $1000 a month. Even though we already do that, for anyone buying their own insurance, it seems like a step in...
I agree that we shouldn't make people choose between medical insurance and an extra $1000 a month. Even though we already do that, for anyone buying their own insurance, it seems like a step in the wrong direction.
For cash-equivalent programs I don't see it as being a hard choice. You could either get the $1000 a month or the other cash benefits, whichever is higher. Nobody would lose money.
This does not seem as though it is intended as a serious, viable bill with a chance of passing, and is more likely to be a bill meant only for political campaigning by its author. Most...
This does not seem as though it is intended as a serious, viable bill with a chance of passing, and is more likely to be a bill meant only for political campaigning by its author.
Most importantly, I'm not sure how the proposed tax would cover the cost of the system generally, and seems to fail even order-of-magnitude approximations:
California's population is around 40m. Let's assume, optimistically, that only 50% of the population would actually be eligible.
In 2019, sales tax collections at 7.25% were around $13b, so let's optimistically assume that a 10% VAT would actually collect around $20b (I'm a bit unclear as to whether the $13b number is from the 7.25% total collection or 6% state allocation, so this covers both).
Thus, the added VAT would allow a UBI of $1000 per year, or $83 per month. The remaining 92% of funding for the UBI would need to come from somewhere else.
Additionally, as California uses sales taxes, the introduction of a VAT, rather than the more viable options of using an additional sales tax, or switching everything to VAT, would double bookkeeping requirements, incorporating the disadvantages and removing the advantages of both systems. I suppose that, for political purposes, VAT sounds exotic and modern.
In fact, using a consumption tax rather than an increased income tax also seems unusual: using a consumption tax of X% to fund a UBI of $Y requires that the taxable purchases of each resident be, on average, $Y*100/X, eg, in this case, the average taxable monthly purchases per resident would need to be $10,000. Even accounting for corporate taxable purchases, that doesn't seem at all reasonable.
From an income tax perspective, using the same 20m eligible residents number, the proposal would require $240b per year in funding. To fund it from personal income tax, this would require increasing tax revenues by around 600%. For corporate income tax, it would require increasing tax revenues by around 4,800%.
The personal income tax approach isn't necessarily impossible, but it would involve a massive change in how California's economy and government operated, likely making CA income taxes higher than US federal income taxes and, without control of US tax rates, possibly resulting in top combined marginal rates close to or even above 100%.
It's also worth noting that California, as a state, has limited authority to prevent migration (something some California agencies already tried in the 1930s), which would likely become problematic. It also has no authority, of course, over federal taxes, and such a program would likely be subject to very problematic federal intervention.
I'm not opposed to UBI, but trying to implement it as a US state doesn't seem viable.
Given all the intended exemptions for eligibility, I think your initial numbers are likely way off, and so all that follows based on that is as well. IMO there is no way anywhere even remotely close to 50% of the population would be eligible for this program. This seems to be an incredibly limited proposition designed to target only the most destitute. Edit: See below.
That would make sense, but unless I'm confused, the bill's text appears to state the exact opposite: anyone over 18 who isn't receiving other benefits would receive UBI, regardless of their...
That would make sense, but unless I'm confused, the bill's text appears to state the exact opposite: anyone over 18 who isn't receiving other benefits would receive UBI, regardless of their income. The bill appears to exclude the most destitute and include the affluent.
Even assuming that none of these numbers overlapped (they likely have significant overlaps), 50% eligibility appears not to be completely unreasonable, unless I'm missing something. And as the numbers appear to be outside of viability by an enormous amount, the eligibility would need to be enormously lower for it to make sense, eg, less than 5% eligibility.
Am I missing something about the eligibility requirements in the bill?
Not only that, but it's dubious you could call a scheme that applies to only 50% of residents universal, much less one that applies to an order of magnitude less.
Not only that, but it's dubious you could call a scheme that applies to only 50% of residents universal, much less one that applies to an order of magnitude less.
50% was meant as a low guess, but it's also important to realize that the total population number includes children, while the proposal doesn't, and that is a significant factor in that percentage...
50% was meant as a low guess, but it's also important to realize that the total population number includes children, while the proposal doesn't, and that is a significant factor in that percentage eligibility. Percentage eligibility for adults could well be much higher than 50%.
I do think there is a reasonable argument for excluding children from UBI.
Ah, nevermind... Sorry, I think I may have interpreted this in complete reverse. (@pallas) From the text of the bill: So it's only those currently receiving benefit from those other programs that...
Ah, nevermind... Sorry, I think I may have interpreted this in complete reverse. (@pallas) From the text of the bill:
California residents who are 18 years of age or older and receiving benefits under the Medi-Cal program, the County Medical Services Program, the CalFresh program, the CalWORKs program, or Unemployment Insurance shall not be eligible to receive a universal basic income under the CalUBI Program.
So it's only those currently receiving benefit from those other programs that are ineligible to receive the proposed CalUBI payment. And looking at the numbers, that does not appear to be a majority of people:
Medi-Cal:
Medi-Cal, California’s Medicaid program, is the state’s health insurance program for low-income Californians, including 40% of all children, half of all people with disabilities, over a million seniors, and nearly 4 million adults. It also pays for more than 50% of all births in the state and 58% of all patient days in long-term care facilities. In total, 13 million, or one in three, Californians rely on the program for health coverage. -source
County Medical Services Program:
Has enrollment stats, but only county by county. A quick browse through shows them to be quite low, though. See: https://www.cmspcounties.org/data/
Unemployment Insurance:
In related data that figures into the state’s unemployment rate, there were 321,372 people receiving unemployment insurance benefits during the survey week in May compared to 364,431 in April and 337,974 people in May 2018. -source
CalFresh:
About 4.1 million Californians, or 70 percent of those eligible, are enrolled in the food assistance program known as CalFresh. That leaves about 2 million people out, according to 2015 federal data cited in a January report. -source
And I imagine there is quite a bit of overlap between some of those programs, as well.
But doesn't this strike anyone as backwards? The people on those programs are likely the ones in most need in the State, and yet they are the ones that are going to be ineligible for CalUBI.
It makes a bit more sense if you look at what happens when someone loses unemployment benefits. People will commonly work "under the table" to avoid losing their benefits. The idea is to reduce...
It makes a bit more sense if you look at what happens when someone loses unemployment benefits. People will commonly work "under the table" to avoid losing their benefits. The idea is to reduce the cliff, so they still get something after getting a job or running out of benefits. This necessarily means increasing benefits for people who currently don't qualify. It's inherently less targeted because the idea is to increase the security of the benefits.
But to see the overall effect on inequality of UBI you need to look at the net effect it has on people when combined with the taxes that pay for it. UBI is essentially a redistribution scheme and how progressive it is depends mostly on the taxes. For people with high income it should essentially be like a tax refund - you are getting some of your own money back, but overall it is a tax increase. (The equality of everyone getting the same amount is only symbolic.)
I'm not sure that a VAT makes the most sense for this; it seems like income or property taxes would be better? But there is an argument that it's too easy to deduct expenses on income tax and a VAT makes it harder to avoid the tax.
Thanks, that helped me make sense of it. I agree there. VAT strikes me as potentially affecting lower income people far more that higher income, whereas a property tax (or a progressive income...
Thanks, that helped me make sense of it.
I'm not sure that a VAT makes the most sense for this; it seems like income or property taxes would be better?
I agree there. VAT strikes me as potentially affecting lower income people far more that higher income, whereas a property tax (or a progressive income tax) doesn't and so would hopefully also help contribute to reducing inequality (like UBI also ideally would), and also likely provide a lot more funds to redistribute than VAT.
Correct me if I'm wrong, but wasn't one of the points of UBI was to improve on your average aid programs by eventually replacing/providing an alternative to them with something more efficient that...
But doesn't this strike anyone as backwards? The people on those programs are likely the ones in most need in the State, and yet they are the ones that are going to be ineligible for CalUBI.
Correct me if I'm wrong, but wasn't one of the points of UBI was to improve on your average aid programs by eventually replacing/providing an alternative to them with something more efficient that also can't be taken away? I.e., UBI could have comparatively low bureaucratic overhead for things like checking eligibility, and could also better encourage individual improvement since unlike many programs it wouldn't be taken from people should they pass an arbitrary threshold.
I'll grant that this proposal doesn't seem like it'll be the most effective implementation of UBI, but it still looks good to me overall.
Low's bill would establish a California Universal Basic Income Program funded by a new 10 percent value-added tax on goods and services in the state. According to the bill, those exempt from receiving monthly payments are those already using Medi-Cal, County Medical Services Program, CalFresh, CalWorks or Unemployment Insurance.
The proposed tax to fund the program would not apply to "medicine, medical supplies and equipment, educational materials, including textbooks, tuition or fees for education, food, groceries, and clothing."
Interesting. I'm not sure how I feel about an additional 10% tax on top of the state's already 10% sales tax. I'm not one of these people who's normally opposed to taxes, but our sales tax is...
Interesting. I'm not sure how I feel about an additional 10% tax on top of the state's already 10% sales tax. I'm not one of these people who's normally opposed to taxes, but our sales tax is already quite high and doubling it is extreme. On the other hand, if it helps keep people from being homeless, then maybe it's worth it. I'm also concerned that they're only talking about $1,000 per month. That doesn't get you very far in California. So it both feels like too much and not enough at the same time. Good luck selling that to constituents.
By comparison, 20% VAT is completely normal in Europe.
I'm not sure how I feel about an additional 10% tax on top of the state's already 10% sales tax. I'm not one of these people who's normally opposed to taxes, but our sales tax is already quite high and doubling it is extreme.
By comparison, 20% VAT is completely normal in Europe.
That's true, but I feel like European governments give more benefits for the money they take. We don't have universal healthcare, and our military seems to need an ever-increasing amount of...
That's true, but I feel like European governments give more benefits for the money they take. We don't have universal healthcare, and our military seems to need an ever-increasing amount of funding even though it already costs something like 10x more than the next largest one. I'd rather see us redistribute the money we already pay in a more reasonable way before going up to those levels.
Aren't European VATs closer to a national tax than a local one? I was making a comparison of what our nation spends vs. theirs. But point taken, the tax in the article would be a state tax, not a...
Aren't European VATs closer to a national tax than a local one? I was making a comparison of what our nation spends vs. theirs. But point taken, the tax in the article would be a state tax, not a national one. Just responding to the point that was made.
Yeah, I think it's too high to be viable at the state level. An Alaska-type program might work though. I don't think there is any UBI that's too low to get started. Whatever level it is, it will...
Yeah, I think it's too high to be viable at the state level. An Alaska-type program might work though.
I don't think there is any UBI that's too low to get started. Whatever level it is, it will help some people, because benefits of an incremental amount of money can be important for people living on the edge. If you're one car breakdown away from losing your job, an extra $4000 a year can mean being able to build up an emergency fund and being substantially more secure.
That's a good point about people living on the edge. I guess I was under the impression that it was intended for people who were "over the edge," so to speak. Those already in poverty rather than...
That's a good point about people living on the edge. I guess I was under the impression that it was intended for people who were "over the edge," so to speak. Those already in poverty rather than those nearing it. But helping anyone is a good goal.
So....not really universal. UBI will only work well in addition to existing aid programs, not as a replacement for them.
The only exception is when the UBI can replace a means-tested program such as food stamps our housing voucher for cash. This allows individuals to allocate money as needed, and not be limited by limits on either. That said, they must be like-for like, as in the cash value of UBI is equivalent to the total value both would provide, not as a lower-amount alternative.
Public housing programs would still need to exist in order to provide competition from increasing rents.
The worst case for UBI is replacing things like medical care, as medical care in the USA is broken as hell, and until that is fixed, it's impossible to provide a UBI to cover sufficient medical needs.
I agree that we shouldn't make people choose between medical insurance and an extra $1000 a month. Even though we already do that, for anyone buying their own insurance, it seems like a step in the wrong direction.
For cash-equivalent programs I don't see it as being a hard choice. You could either get the $1000 a month or the other cash benefits, whichever is higher. Nobody would lose money.
This does not seem as though it is intended as a serious, viable bill with a chance of passing, and is more likely to be a bill meant only for political campaigning by its author.
Most importantly, I'm not sure how the proposed tax would cover the cost of the system generally, and seems to fail even order-of-magnitude approximations:
Additionally, as California uses sales taxes, the introduction of a VAT, rather than the more viable options of using an additional sales tax, or switching everything to VAT, would double bookkeeping requirements, incorporating the disadvantages and removing the advantages of both systems. I suppose that, for political purposes, VAT sounds exotic and modern.
In fact, using a consumption tax rather than an increased income tax also seems unusual: using a consumption tax of X% to fund a UBI of $Y requires that the taxable purchases of each resident be, on average, $Y*100/X, eg, in this case, the average taxable monthly purchases per resident would need to be $10,000. Even accounting for corporate taxable purchases, that doesn't seem at all reasonable.
From an income tax perspective, using the same 20m eligible residents number, the proposal would require $240b per year in funding. To fund it from personal income tax, this would require increasing tax revenues by around 600%. For corporate income tax, it would require increasing tax revenues by around 4,800%.
The personal income tax approach isn't necessarily impossible, but it would involve a massive change in how California's economy and government operated, likely making CA income taxes higher than US federal income taxes and, without control of US tax rates, possibly resulting in top combined marginal rates close to or even above 100%.
It's also worth noting that California, as a state, has limited authority to prevent migration (something some California agencies already tried in the 1930s), which would likely become problematic. It also has no authority, of course, over federal taxes, and such a program would likely be subject to very problematic federal intervention.
I'm not opposed to UBI, but trying to implement it as a US state doesn't seem viable.
Given all the intended exemptions for eligibility, I think your initial numbers are likely way off, and so all that follows based on that is as well. IMO there is no way anywhere even remotely close to 50% of the population would be eligible for this program. This seems to be an incredibly limited proposition designed to target only the most destitute.Edit: See below.That would make sense, but unless I'm confused, the bill's text appears to state the exact opposite: anyone over 18 who isn't receiving other benefits would receive UBI, regardless of their income. The bill appears to exclude the most destitute and include the affluent.
I'm not sure how my numbers are significantly off. Medi-Cal is the largest excluded group, and covers 13.2m residents, but the majority of those appear to be children. CalWorks covered around 1m residents in 2017, but 80% were children. CalFresh covered around 4m residents in 2017. There are likely around 1m recipients of UI. I can't find statistics for CMSP, but it appears to be significantly smaller and doesn't appear to cover most of the highly-populated counties of California.
Even assuming that none of these numbers overlapped (they likely have significant overlaps), 50% eligibility appears not to be completely unreasonable, unless I'm missing something. And as the numbers appear to be outside of viability by an enormous amount, the eligibility would need to be enormously lower for it to make sense, eg, less than 5% eligibility.
Am I missing something about the eligibility requirements in the bill?
Not only that, but it's dubious you could call a scheme that applies to only 50% of residents universal, much less one that applies to an order of magnitude less.
50% was meant as a low guess, but it's also important to realize that the total population number includes children, while the proposal doesn't, and that is a significant factor in that percentage eligibility. Percentage eligibility for adults could well be much higher than 50%.
I do think there is a reasonable argument for excluding children from UBI.
Ah, yes. Okay that makes sense. And I get the children thing too
I posted the link but haven't looked at the bill. What exemptions does it have that would exclude most people?
Ah, nevermind... Sorry, I think I may have interpreted this in complete reverse. (@pallas) From the text of the bill:
So it's only those currently receiving benefit from those other programs that are ineligible to receive the proposed CalUBI payment. And looking at the numbers, that does not appear to be a majority of people:
Medi-Cal:
County Medical Services Program:
Has enrollment stats, but only county by county. A quick browse through shows them to be quite low, though. See: https://www.cmspcounties.org/data/
Unemployment Insurance:
CalFresh:
CalWorks:
Their site (https://www.cdss.ca.gov/calworks) is giving me request rejected error so I can't even check stats.
And I imagine there is quite a bit of overlap between some of those programs, as well.
But doesn't this strike anyone as backwards? The people on those programs are likely the ones in most need in the State, and yet they are the ones that are going to be ineligible for CalUBI.
It makes a bit more sense if you look at what happens when someone loses unemployment benefits. People will commonly work "under the table" to avoid losing their benefits. The idea is to reduce the cliff, so they still get something after getting a job or running out of benefits. This necessarily means increasing benefits for people who currently don't qualify. It's inherently less targeted because the idea is to increase the security of the benefits.
But to see the overall effect on inequality of UBI you need to look at the net effect it has on people when combined with the taxes that pay for it. UBI is essentially a redistribution scheme and how progressive it is depends mostly on the taxes. For people with high income it should essentially be like a tax refund - you are getting some of your own money back, but overall it is a tax increase. (The equality of everyone getting the same amount is only symbolic.)
I'm not sure that a VAT makes the most sense for this; it seems like income or property taxes would be better? But there is an argument that it's too easy to deduct expenses on income tax and a VAT makes it harder to avoid the tax.
Thanks, that helped me make sense of it.
I agree there. VAT strikes me as potentially affecting lower income people far more that higher income, whereas a property tax (or a progressive income tax) doesn't and so would hopefully also help contribute to reducing inequality (like UBI also ideally would), and also likely provide a lot more funds to redistribute than VAT.
Correct me if I'm wrong, but wasn't one of the points of UBI was to improve on your average aid programs by eventually replacing/providing an alternative to them with something more efficient that also can't be taken away? I.e., UBI could have comparatively low bureaucratic overhead for things like checking eligibility, and could also better encourage individual improvement since unlike many programs it wouldn't be taken from people should they pass an arbitrary threshold.
I'll grant that this proposal doesn't seem like it'll be the most effective implementation of UBI, but it still looks good to me overall.
From the article:
Interesting. I'm not sure how I feel about an additional 10% tax on top of the state's already 10% sales tax. I'm not one of these people who's normally opposed to taxes, but our sales tax is already quite high and doubling it is extreme. On the other hand, if it helps keep people from being homeless, then maybe it's worth it. I'm also concerned that they're only talking about $1,000 per month. That doesn't get you very far in California. So it both feels like too much and not enough at the same time. Good luck selling that to constituents.
By comparison, 20% VAT is completely normal in Europe.
That's true, but I feel like European governments give more benefits for the money they take. We don't have universal healthcare, and our military seems to need an ever-increasing amount of funding even though it already costs something like 10x more than the next largest one. I'd rather see us redistribute the money we already pay in a more reasonable way before going up to those levels.
California doesn't spend much of their budget on their military, afaik.
Aren't European VATs closer to a national tax than a local one? I was making a comparison of what our nation spends vs. theirs. But point taken, the tax in the article would be a state tax, not a national one. Just responding to the point that was made.
Yeah, I think it's too high to be viable at the state level. An Alaska-type program might work though.
I don't think there is any UBI that's too low to get started. Whatever level it is, it will help some people, because benefits of an incremental amount of money can be important for people living on the edge. If you're one car breakdown away from losing your job, an extra $4000 a year can mean being able to build up an emergency fund and being substantially more secure.
That's a good point about people living on the edge. I guess I was under the impression that it was intended for people who were "over the edge," so to speak. Those already in poverty rather than those nearing it. But helping anyone is a good goal.