So another de facto "UBI plan" to analyze and discuss. Fun! And it should be fairly easy as this is like the fourth proposal other than my own I'll be analyzing.
So, this plan is yet another NIT. That...is gonna cost it points from the get go because I hate how bureaucratic and vulnerable to future political changes/sabotage that these plans are. But, let's see how this goes otherwise.
So, the plan offers $13,000 a year, that's good. It has a 33% clawback rate, and breaks even at $39,400. Assuming that clawback rate replaces all taxation on the poor, that's not terrible. I mean, my plan would do roughly the same. I'm not actually sure about that, will the poor have to pay payroll taxes and the like on top of this? If so, the de facto marginal tax rate could be higher than 33%. This is an issue with NIT plans. I want to put a 18-20% flat tax on all income and it's deemed "regressive". NIT welfarists support these 30-50% clawback rates and then implement other taxes on top of it and it's considered "progressive" because it's not really a "tax" on the poor (even though it might as well be) and because Bill Gates doesn't get a check too. Kind of a sub par policy decision, and actually IS regressive. The rich pay what, 40% in income taxes, and often like 15-20% with capital gains, and then the poor end up paying like 50%+ between payroll taxes, income taxes, and social benefit clawbacks? That isn't regressive? Again, just a nitpick given how many times I've seen progressives scream at me about Andrew Yang's VAT or my proposed UBI-FIT models I used to push.
This NIT does not offer a benefit to children. I see that as a negative. While I hate how welfarists are like "think of the children" and have all of these generous pro child social programs while telling "abawds" to screw off, this kind of takes the opposite approach. The reason I'm so big on a child benefit of around 30-40% of the adult benefit is because I believe families should be kept out of poverty, period. They do leave open the possibility of a child benefit in the future though.
As far as funding it goes, they claim it costs $855 billion. And they essentially post several other UBI plans for comparison's sake I might want to look at in the future. But as far as funding this plan, they aim for a target of $1.09 trillion, which was the highest costing NIT plan of the ones they looked at. They would eliminate a lot of welfare programs I'd also eliminate, as well as a lot of tax credits and deductions I'd also eliminate. However, one pet peeve I have is the fact that they would eliminate EITC, which, don't get me wrong, I'd have no issue with if they had a child benefit, but they don't, so that seems kind of cruel to single parent households and the like. Not huge on that aspect.
As far as taxation goes, they have a few ideas, such as an Andrew yang style VAT, or a 6% income tax similar to my own 18.5% tax. Alternatively they also offer smaller taxes I use for a variety of my plans like corporate taxation, wealth taxes, carbon taxes, etc. So they can fund it no problem.
My big issue is depending on the tax structure, they might end up adding taxes on top of the already 33% clawback rate. With the VAT, for example, say they implemented that. Well, if they pushed a 10% VAT like Andrew Yang's, the clawback rate would effectively become 43%. On top of other taxes. Yeah, I'm not really big on this actual approach. It IS potentially regressive on the poor. On the other hand, the income tax would be potentially 5% for incomes above the phase out. That's...fair. But again, 33% increase in taxation for the poor, 5% on everyone else, isn't that more regressive than say just a flat tax like I would propose?
Another issue is administering the benefits. They talk about having people report their income monthly, and fill out forms constantly, and people being able to opt out and not claim the benefit if they don't want to. Yikes, no. This is what I hate about NIT. So much micromanaging into peoples' lives. And being able to exclude people. Think of welfare or NIT like you would think of a literacy test to vote. If you make something opt in, the government can be sabotaged and undermined to keep people out. It also mentions fining people who underreport income to discourage that. If we had a UBI, this wouldnt even be a problem. You give people a check, you collect taxes largely automatically. No need to micromanage people. I explicitly try to make people not have to worry about bullcrap paperwork all the time. NIT, you got those problems, hence why I'm not for an NIT.
All in all though, good plan? Bad plan? Eh, it's good. I'd give this one a B+, along with the new school's proposal I looked at recently. I cant give an NIT an A. Sorry, I can't. But it's a solid proposal, with decent funding mechanisms. It works. I feel like it's potentially regressive and has all of the negative aspects of an NIT proposal over a UBI proposal, but it's going to do that. It's still not awful.
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