The sum total of the wealth of all the billionaires in the US in 2021 was ~$4.1 Trillion [0]. That's about the same as the government budget in a normal year pre-pandemic, or about 2/3 of the government budget post-pandemic.
Assuming a $1000/month and a population of ~350 million, you're looking at $4.2 Trillion per year. You could almost fund it for the first year by taxing all of the wealth of the billionaires at 100%.
But what are you going to do the second year? That's total wealth, not yearly income.
The stocks would actually crash if converted to money. The net effect wouldn't be more cash to spend, but a stake in the economy. You would probably have to invent some more democratic formats of corporate governance.
Stocks are converted to money with every trade. Every buy has a matching sell. That's something that happens trillions of times a day and stocks aren't crashing because of it. I'm not sure I'm following.
I think the hypothetical here is if you tried to fund UBI via a billionaire-wealth-tax, it would involve liquidating basically all stock they hold. If you sell that much stock, the price will go down. (It's the opposite side of the coin compared to why you can't do a hostile takeover at market cap by just buying stock - the price goes way up as you buy up all available shares).
There's several second and nth-order effects that seem crucial to our understanding.
Every seller has a buyer. Who would be buying these liquidated stocks?
What would the estimated new equilibrium be? What would be the effects of this equilibrium compared to the current state? Can we estimate the pros and cons?
Conversely, holding the belief that stock prices are crucial to our betterment, wouldn't that imply that we would be better off if stock prices were higher due to more wealthy people owning stock and fewer non-wealthy people owning stocks? At face value that doesn't sound right, so I must be getting something wrong.
> Conversely, holding the belief that stock prices are crucial to our betterment, wouldn't that imply that we would be better off if stock prices were higher due to more wealthy people owning stock and fewer non-wealthy people owning stocks? At face value that doesn't sound right, so I must be getting something wrong.
The driving factor there isn't who owns it, but how rapidly it's being sold. The exact same situation would occur if the stock was already owned by everyone equally, and they were all forced to sell due to a wealth tax on everyone - the price would crater.
just curious, but why is there always an implicit assumption in this debate that we only tax the wealth of billionaires? is the money of a half billionaire somehow less green than a full billionaire?
Keep going until you're taxing everyone that makes over $80K/year or so, and you pretty much have it being balanced.
I never understood the UBI argument. 30 seconds of napkin math would show you how insane the proposal is, even at the rate of $1000/month. If you want to increase welfare for those below the median income, fine, let's have that discussion. Don't play games with the word 'universal'
The premise of it being universal is that it doesn't have an explicit phase out and instead it's implicit in the tax system. Obviously someone making six figures is not going to be a net recipient, but they would still have the money deposited into their account. The amount would just be smaller than the amount they're paying in taxes.
The advantage of doing it this way is that it makes it clear what's going on. Right now we nominally impose low marginal tax rates on the poor but their effective marginal tax rates are high because of benefits phase outs, so their effective marginal tax rates are higher than the wealthy. With a UBI you replace the benefits with cash payments and eliminate the phase outs, but also flatten the tax rates so the poor are paying the same effective marginal rates as the rich, instead of higher ones.
The result would be that the poor pay slightly lower effective marginal rates and the rich pay slightly higher ones (although you don't even inherently have to do that; it depends entirely on the tax rate and the amount of the UBI), but the overall system is much simpler. And the consequence that the poor are paying higher effective marginal rates than the rich, which was presumably never intended, goes away.
Right! It also lets you eliminate the means testing part of the system that makes people jump through humiliating hoops to show that they’re poor enough to need a handout, punishes people who are working too much by taking away their benefits, etc.
You'd adjust marginal rates so the poor would (net) benefit, the middle class would about break even, and the rich would pay more. Napkin math on that isn't that bad, especially if you chop a bunch of other welfare payments (and the associated expensive means-testing and administration).
No one serious is suggesting "everyone gets $1000/month and literally nothing else changes".
Which welfare plans are you cutting? Social Security? Nope, because the average payout is 50% higher than $1000/m. Same with SSI/disability. You certainly couldn't replace any of the medical plans (Medicaid/Medicare) with anywhere near that amount.
The welfare plans that might be subject to being replaced only amount to a few percent of the federal budget. The bulk of the budget is those plans above, which would result in less benefits if replaced. You're not paying for this by finding lost coins in the couch cushions.
Yeah, as I said in my comment, the primary way to pay for it is to adjust marginal rates so that it's (mostly) a transfer from rich to poor. If you're rich, you'll get a $1k UBI and also pay $2k more in taxes (or $4k, or whatever). Probably for those at the median income it would be roughly neutral - but with the benefit that if you ever lose your job, or want to leave an abusive marriage, or want to try starting a business, you still have that $1k coming in.
Medicaid and Medicare being wholly replaced by a truly universal plan unrelated to UBI is probably a prerequisite for a UBI for a bunch of reasons. Social security would probably be unaffected, at least initially, and SSI/disability would likely either be reduced or gradually phased out, depending on the amounts.
I know the other various benefits aren't huge in the budget, but they add significant bureaucratic burden to both the state and the individual. Eliminating that would be a big benefit of UBI.
I don't think that's the case. Instead, it's just that the "let's tax the rich people more!!" idea is ill-founded to begin with, and the easiest way to show that is to point out that if instead of just taking some percentage more, you took everything they have, it still wouldn't solve the problem, not by a longshot.
Choosing some arbitrarily small segment of the population and saying "See, they don't have enough money to fund this program" is not the steelman you seem to think it is. Instead, try discussing something serious, like a plausible adjustment to the progressive tax system.
Nah, if someone puts forth an argument that is fundamentally flawed, it's neither wrong to point it out nor on me to do their thinking for them.
That said, if we want to talk taxes, I think a progressive tax system is nearly always wrong, immoral, and unfair, so you probably would disagree with any adjustments I'd suggest. :)
For new and expensive schemes it is often a challenge to figure out who will be paying for it. The proponents typically don't want to say for the obvious reason - the people paying for a universal service will probably be worse off than if they weren't so it isn't helpful to identify them (they'll just add to the resistance). But that means it is awkward to attack an idea on cost because detractors don't propose the scheme and are often dealing with people unwilling to suggest realistic costs or tax schemes. People with technically excellent arguments have to be a bit oblique in pointing out that someone has to pay and it'd speed the debate along for someone to figure out who. For a UBI, we might suspect it isn't going to be billionaires.
The fair way would be if sentences had to pattern match "I think [scheme] is a good idea and we will pay for it by [specific tax proposal].". Seems unlikely in practice though.
