So, this journey began when someone on reddit asked what the maximum sustainable basic income was. I figured it would make a good post so I analyzed it. While it revealed to me a lot about how funding a UBI works and how low UBIs are remarkably easy to fund while larger ones get progressively more difficult, this led me to have more questions. How much tax is too much?
I knew of the idea of the laffer curve so I looked into that. Originally I thought it was like 50something percent, but more research indicated estimates around 70%, with some as high as 76%. Looking at the tax burdens top incomes face now, a UBI raising taxes by 20% points would bring us close to that laffer curve. The rich currently pay 47% including local taxes, so 20 points onto that brings us to 67%. Since medicare for all would raise it 11 points more, it would bring us to 78% to fund both ideas. Now, to be fair, it's possible the laffer curve refers only to the federal rate, not the local rate, as even with local taxation the rich pay 67% of income with the new 45% tax rate, but still, not wanting to tempt fate, I decided that funding both UBI and M4A would be unsustainable. Maybe it can work. I'm not sure. I'm not a policy expert on that front. I don't know if 70% is just the rate for federal taxation or all taxation, but I still would like to keep taxes around 70% if possible for revenue raising purposes. I don't care if I go a little over like 72% for reference, but if I'm at 75% or higher, yeah I do care.
I then spent a significant amount of time looking at what kinds of UBIs I could fund with Bernie's M4A plan. And the best I could do was a partial UBI of $9,000 for adults and $3,000 for children. Better than nothing, but still, I would like to get at least my old $12,000/$4000 numbers if possible, if not my new $13,200/$4,800 numbers. I mean if I didn't fund a medicare for all plan, I could arguably fund a UBI up to around $14,000-$15,000 if I wanted to. But with Medicare for all, it would be harder.
This caused me to look into healthcare spending in the US. Our system is a complete and utter mess. It angers me how little people in other countries are paying compared to us. We got countries like Canada and the UK who have single payer or government run systems that get good results, that cover everyone, and they pay far less than we do. If we want to implement those plans all at once, we would need to bite the bullet and absorb the costs of a bloated system all at once, which would fiscally threaten my UBI plans.
I considered the idea of just moving toward a less aggressive plan, like a public option someone like Biden or Yang would push, but those plans are...weak. Looking at what the structural problems are with the system, most plans the democrats have involving limited medicare buy ins and bureaucratic solutions just don't cut it. I don't want the ACA 2.0. I'm sorry, I don't. We can talk about how great Germany is for having insurance mandates or whatever, but hey, we're not those systems. Our system is too broken, and I'm convinced some sort of medicare for all or at the very least a less expensive hybrid option is the path forward.
So I looked at alternatives. Standard band aid plans people like Biden support are very cheap, like $75 billion. Weak. But Bernie's full plan is $1.75 trillion in additional spending per year. And while if I were a standard social democrat that's affordable, I'm also trying to pay for a $3-3.5 trillion UBI plan too, and that limits our options. Ideally, I'd like something that covers more people and provides easily accessible universal coverage, while still, for the time being, preserving the private system somewhat do we don't have to take on all of those costs at once. I came across 2 plans I liked that did this. One was the Center for American Progress's Medicare Extra for All plan, and the other was the Medicare for America Act. I decided to settle upon the Medicare Extra For All plan to be my tentative endorsed plan. It would be fairly cheap and affordable, and taxed by taxes on the rich that may not necessarily count toward that 70% laffer curve. It would provide universal coverage for everyone who doesn't have it, and aggressively transition people to Medicare Extra over time. This would allow us to slowly evolve into a single payer system and serve as a springboard allowing for a shift toward a single payer system over a generation. Hopefully this would allow a much cheaper single payer system to emerge over time, similar to other countries, without needing to bite the bullet of all of the costs at once. It would also replace taxes with paid premiums depending on income level, which may not count toward the laffer curve as the alternative to medicare extra would be to buy private insurance for the same money anyway. So it's a market transaction. Seems like a win to me. Keeps the system private enough for those who want it that way, while aggressively expanding us to universal coverage overnight and potentially strangling the private systems to death over time. A more gradual transition to medicare for all.
And that's where I'm at. I believe this plan would accomplish the same results I want, while being much cheaper, and allowing me to pursue a poverty line level UBI. Some Bernie supporters might be disappointed with this shift, but I'm disappointed with Bernie not supporting a UBI, so the feeling's mutual. I respect the push to M4A. I wish we could do both simultaneously in full unadulterated form. But reality forces me to work within certain constraints, and because I prefer a full UBI over a full medicare for all plan, I think that Medicare Extra for all will be a solid transition.
Oh, but to answer my original question, the maximum sustainable UBI depends on what else you're trying to fund. We could likely fund a UBI of around $14-17k if we ONLY wanted to fund that to the exclusion of all other potential supplementary plans. Meanwhile if you went with full on Medicare for all, that would drop precipitously to $8-10k or so. With Medicare Extra for all, the amount would be closer to the targetted $12-15k or so, so I'm going to stick with that.
No comments:
Post a Comment