This argument is only valid as far as (pseudo-)capitalism is valid. Capitalism is first and foremost an ideological rather than a logical choice. There is more than one alternative to it and in some of these, interest on capital is indeed both immoral and illogic. But that's another discussion

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"Say not, 'When I have free time I shall study'; for you may perhaps never have any free time"
Hillel the Elder

Indeed. The cost does seem to be the weakness of this plan.
The combination of granting "basic income" to not merely destitute to be ALL citizens combined with the elimination of income tax creates a tremendous loss if money for the government. Getting all back via consumption tax probably isn't valid. The consumption tax would have to be too low if the poor are to survive with it.
The killer question will be, "where does the rest of the money come from?"

Loaning someone money is a risk. The interest offsets this risk. This is what the lendor is paid for taking the risk. If there was no interest, please expalin why anyone would have any incentive to loan money? Why would someone give up their money for no reason at all?

By the way, economics does make sense, perhaps you just don't understand. Read some Rothbard, he is an anarchist.

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"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

Interest on capital is immoral AND illogical? Why do you support a theory that allows for any investment at all?

I'll be happy to engage that discussion if you like.

I find most other "alternative" systems are really just capitalism where the power is removed from the capitalist.

Partial quote, Tim:
It's illogic in e.g. anarchism (the real thing, not "anarcho-capitalism") and immoral in e.g. Islam.
It should have been "and/or" though.

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"Say not, 'When I have free time I shall study'; for you may perhaps never have any free time"
Hillel the Elder

Hello,

I am a member of Vivant (Belgium) and I will try to adjust some things sead here.
First of all, my English is far from perfect but I presume in Dutch we wont get far. An advantage of my poor English is that I will keep it short.
As far as I read the tread there are some wrong statements.
Vivant is not a member of the Basic Income Earth Network (BIEN) but our founder, Roland Duchatelet is indeed (so am I).
About the program: All we did was shifting the numbers, there is NO additional income necessary to pay for the basic income proposal of Vivant (there is only a small Tobin tax on capital movements who is new).
There are two independent (one university and one personal) study's who are confirming our calculations.
In Europe we have a high level of taxes but that on his own is no issue. The things that matter is what is happening whit that money. We have a very good social security and health care system but it coold be better. There is also the global competition who is forcing some changes. A high tax on wages is driving the enterprises out of our continent and Vivant proposes to save our "social security" system by taxing consumption (some thing like the fair tax movement in the US, but not so drastically)
What do we propose in short
- shifting the tax on labour to consumption (a 50 % TVA on the average, taxing luxury and ecological damaging items more and food less )
- no taxes on services
- a basic income (calculated on the averages paid now for all the things social security is paying for at the moment) for all residents
we are recalculating the program for the moment but it should be something like 160 Euro a month 0 - 18 years, 500 Euro 18 to 25 years, 650 Euro 25 to 65 years and 1000 Euro above 65. Without means testing or what so ever.
- Direct Democracy (like the Swiss model, but that is not discussed here)
- a flat tax with two thresholds, 0 % to 1500 Euro and 50 % anything above.
In fact this works as a Negative Income Tax.

The basic income is half of the legal minimum wage. (we do have a legal minimum wage ) In that case in the Vivant system the basic income is always half of the legal minimum wage for a full time job. Wages payd in the illegal circuit are showing that this is a working assumption.


About the "rich" and "poor" discussion and the work incentive I like the statement of Eduardo Suplicy on that:

There is no evidence that poor people will not work anymore with a basic income. On the contrary, in Belgium we have an "illegal activity" (we call that working in the black) with a value of 20 % of GDP. All those man and women do have some sort of "basic income", but that doesn't stop them to work. All they are doing wrong is not to pay taxes on work or income. Also lottery winners, win for life system, are staying active in most cases. Why not? Do rich people work? Yes? Why ? And poor people on a basic income suddenly will do nothing anymore? In Alaska is nobody working anymore ? (they have a basic income but only a partial one, I don't think they can live on it?)
And being a communist, or socialist or libertarian, whatever is no a argument. We all have good (and less good ;-) ) ideas. In Germany in the basic income network men like Roland Duchatelet and ex communist (now called socialists) like Katja Kipping are all working together on a new future. Perhaps with less work because of automatisation and a basic income who can deliver a real free market for labour. A market for labour with a right to sea no for everyone.

Kind regards,

Paul

What do you think of a systems that pays an income only if requested by a "potential" labor market participant? In other words, if a person hypothetically, chooses not to work or is frictionally unemployed; that person could simply apply for a subsidy.

What is a "simple" reply ? I do understand that the aim is a system at the lowest cost possible. But look at the Alaska fund. You only have to ask for it.
https://www.pfd.state.ak.us/forms/An...nualReport.pdf
It is far more efficient to give it back if you don't want it, I think. (or spend it on charity, even a basic income will not erase all misery)

Paul

personal website

www.basicincome.be

member of www.usbig.net and www.basicincome.org

It's an interesting model. But perhaps there are some problems that should be discussed:

1. A tax system without income tax, based only on a (probably high rate) VAT puts a lot of the burden on people with low income, cause they actually have to consume all or a greater part of their income to make their living. An income tax system rather follows the ability-to-pay principle and seems more fair to me. Strong shoulders can carry more weight.

2. A high VAT rate probably encourages moonlighting and fraud. Some of the bureaucracy from the former income-tax department will have to be switched to fight tax evasion and fraud with the VAT ... also because fraud will become more attractive with the high rates.

3. Just like a minimum-wage a general payment creates unemployment, especially for low qualified people. It's a negative incentive for unemployed people with low or false qualifications to take up a job. It will raise costs/prices for certain goods or services that rely on low paid employees (like public transport or healthcare for example) and make companies move low-wage production out of the country if they can.

I presume we are still talking about the "Vivant" system.


1. The proposal is a flat tax on income with two tresholds: 0% for the first 1500 Euro and then 50% on what is comming on top of that.
The basic income we propose is taxable.
For example:
500 Euro basic income
1200 Euro because I earn more than the minimum wage (500 Euro)
Total income that month: 1700 Euro
Taxes on income : 100 Euro

We propose also not to file an income form, all taxes are payd automaticaly (becaus all taxable income is deposited on a fiscal account) and calculated on a yearly bases and refunded if necesary. Most of the payments are electronic and there is no need to fill in forms.

2. shure, we know all about fraud on VAT but it is a lot more dificult than tax on income and tax on labor. But there is an other aspect. All taxes are payd by the consumer. But only taxes on consumption are taxing all the manufacturers on an equal basis, no mather were they move their production.
Taxes on labor are exported in the case of export (consumer pays) and taxing consumption make export cheaper. We must make a choise there.
I think that if we in Europe (and also in the US) want to keep some production in our country's must move our taxes from production to consumtion. For internal production and consumption this "sliding" of taxes do not change the price. 1% of taxes on labor is for the government equal to 1% VAT. We have 30 % social security taxes on labour and 21 % VAT, a shift from social security to consumption gives 50 % VAT with no prices changing.

3. Yes, when there is a free market for labor, probably some prices for labour will change and go up, other may go down. At last, the real end of slavery. But I totally disagry that there is a significant influence on the work incentive when there is a basic income payd.
Why do (most) rich people work? Go to school ? Or is it only a fact that poor people wont work anymore because they have a "basic income"? Why is it that in Belgium and surrounding countrys people do work (illigal ofcourse) with all kinds of social benefits? It is dificult and unhuman to prohibit to work. But yes, you wont get a anyone for less than 10 Euro an hour. So what?
When you have no money you can''t consume.
On the whole the social security system here is probably one of the causes that the economic boom is less when economy is going up but the bust is also much less. We can keep spending. That is one of the positive results of a "basic income".
Ofcourse there is a limit on "basic income". Rechearch is frequently done and the borders are estimated. In general the maximum hight is where the disadvantages become greater than the advatages. In general this estimated amount is much higher than one would espect.
For the moment in Belgium, France and Germany there are experiments in the direction of the Vivant model. People on social security income may keep that and go to work on a reduced pay in order to have a full pay, social security and wage together. And it works. The only disadvantage is a huge administration cost but it is a step in our direction.

Paul

I see. I initially though that the idea would be a VAT system only with no income taxation at all. But it get it. One could obviously argue whether an marginal income tax rate of 50% is too high. But apart from that I think it is a very interesting system. Here in Germany, and probably in other countries too, one great problem of the social security and the tax system is that it is just way too complicated. The amount of rules is ridiculous. That's highly inefficient.

But I think you just cannot deny that there is a negative incentive in any welfare (or whatever you call it) payment. You ask how many rich people work. But about what kind of work are we talking here? We are talking about poorly paid, probably rather unattractive jobs. How many rich people do you know that collect trash, work on a farm, work in a laundry or drive a bus? Rich people only work if they have a fulfilling job. Ordinary people like me work because they have to earn some money. Why should anybody take up a shitty job if he gets the same money for free? We got 5 million unemployed people here in Germany, but our farmers have to hire workers from eastern Europe because they just do not get enough German workers who want to do the hard work. And I can't even blame those people that reject jobs like that. They act perfectly rational. An unemployed family of 4 can collect about 1,500-1,600 Euro a month today in Germany. In your system it would be 2,000 Euro if I understood it correctly. Let's assume they make some more money with moonlighting or so on to top of that. Why should such people take up a poorly payed job?

What would happen if people are no longer forbidden to work when they have a social security allowance? (like the kombilohn?) Working in the illegal circuit does not exist any longer, all work is legal (or must be). On top of that employers have only to pay half of the minimum legal wage, if negotiations are not topping that up. What would happen if there is no (mass) immigration ? Suppose there is an European basic income (like proposed now
. Ofcourse it can't be equal in all country's to start with but in the future it will.
Wages will be formed on totally other grounds because there is a free market for labour. And people will do what they can do. If the wages for hard labour are high enough there shure will be candidates. And we will go on to enhance productivity and find more ways to make work outdated. Rich people are working in a freee market for their labour. But they do work (most of them)
In Japan mass immigration is undiscussable. The population is shrinking and some economist are welkoming that trend. Less people, higher productivity with no social cost of unemployment, a greater well beeing for all (and a lower GDP) .
Most people are just looking for a secure income but they may loose that if they are caucht working!! This system is outdated and we must move on. It is difficult to imagine the futur but for shure, after the wooden sailig ships came the iron steamboats. And no sailor could imagine that.

Paul

In a market economy, it is up to the labor market participants to seek the jobs that are most conducive to their equilibrium seeking tendencies.

You can also argue, why would any labor market participant want a job that pays well and provides plenty of perks? Why is there no outcry against that?

How is an attitude of, "we don''t care how little a job pays, it should be done by the poorest" justified, just because society cannot implement something better?