Green Party and the Citizens' Income

Generali

cells wrote: »

Didn't Switzerland have a referendum on this subject not long ago. They decided to vote no if I remember correctly.

Also any additional income to the poorest comes straight back to business.

So just for arguments sake if you give £20B to the poorest and tax businesses £20B you will find that although said businesses are harmed by £20B in additional taxes they are helped by £20B in additional sales. Sales which for most businesses are nil marginal cost. What you effectively do is allow the poor access to more machine time

It doesn't work that simply.

Firstly there is the Deadweight Loss which comes with any tax. Then, in addition, taxes which transfer cash from one activity to another encourage rent seeking as they will cause people to prioritise one activity over another.

tomterm8

onlyroz wrote: »

Can some of you clever people explain to me whether the Green Party's policy of a "Citizens' Income" would be a good or bad thing for the economy?

It's a great idea, in theory. Like communism.

In practise it's often the great ideas that cause the most misery...

cells

Generali wrote: »

It doesn't work that simply.

Firstly there is the Deadweight Loss which comes with any tax. Then, in addition, taxes which transfer cash from one activity to another encourage rent seeking as they will cause people to prioritise one activity over another.

I believe it is quite tht simple.

imagine a zero marginal cost business. Most people will be familiar with a hairdresser. They cut your hair at zero marginal cost. If say they operate at 50% of capacity you have a choice. Stay as is or tax them one hair cut cupon and give it to a poor person who can then redeem said haircut. What was the cost to the business? All they lost was some spare zero cost capacity. So imstead of operating at 50% they operated at 51% that day.

Exhange the word coupon for the world 5 pound token and yiu have what you would if the hairdresser was taxed more and in return received thr same in extra business.

Effectively said tax is just mandating business to give away somr of their free capacity.


At this point some will say...but most business is nit zero marginal cost....but they would be wrong most business are zero.marginal cost.

take a chocolate factory. They output a 30p bar at a marginal cost of 3p. Their farmer supplier outputs sugar and other ingredients for 3p at a marginal cost of zero


in short. If you tax business £20B and put it into the hands of the less well off yiu will find that all that £20B comes right back to business. So although they have a £20B tax outgoing they have an equivalent £20B income.

of course thr only downside and its very small imo is that the tax would be fairly uniformly applied but the income fr the spending would not be as uniform. Eg a defense contractor would see some of the tax burden but get no additional income as the recipients of the £20B are unlikely to buy fighter jets. On the other hand food outlets would benifit more than the taxes they paid etc.

cells

tomterm8 wrote: »

It's a great idea, in theory. Like communism.

In practise it's often the great ideas that cause the most misery...

Communism has never been tried in the electrified mechanised modern zero marginal cost society. Writing it off because it failed 100 years ago would be like writing off light bulbs because carbin filament bulbs were !!!! a hundred years ago.

not saying communism would work in todays machine age. But it might fare better now. Certainly it would be a good modern experiment for a mechanised nation to try just so there is the test case to see how it fares today

princeofpounds

I doubt you would find a hairdresser who thought their labour and time was zero marginal cost. Even if they don't have cash costs, there most certainly is an opportunity cost.

princeofpounds

Certainly it would be a good modern experiment for a mechanised nation to try just so there is the test case to see how it fares today

The central problem of communism - that it leads to serious misallocation of capital by removing the process of price discovery and the profit motive - is not affected by mechanisation or underlying costs in the economy.

cells

princeofpounds wrote: »

The central problem of communism - that it leads to serious misallocation of capital by removing the process of price discovery and the profit motive - is not affected by mechanisation or underlying costs in the economy.

All systems have misallocation of capital. Also its worthwhile trting to define what we mean by communism or capatilism. I suppose from your post you see the first as prices set in stone by some state or other body vs prices set by the public

BTW we already have 'communism' were the state is nearly 50% of the economy. Where there is universal health care and pensions and pretty much abundance of everything. Even in the USA the supposed capitalist king prices are regulated in some industries eg electricity prices are regulated by most states

its communism via taxes rather than qutas and dictat


So it isn't even a question of should everyone have access to the means of production. We already do. The question is how do we further improve the lives of the people and the quickest and easiest way to do that is to use the spare capacity in the economy to produce more goods and services for everyone.

right now there are millions of machines either sottig idle or at much lower tjan 100% capacity while at the same time millions of people would like the produxts and services of these machines. Hgher taxes I would argue by in large would just mean these machines operate at a higher capacity factor and everyone has more goods and services. Its not even anything to do woth communal ownership vs private ownership

cells

princeofpounds wrote: »

I doubt you would find a hairdresser including said hair dress their labour and time was zero marginal cost. Even if they don't have cash costs, there most certainly is an opportunity cost.

Well that is a process which is 100% human, most other processes are virtually 100% machine.

They are indeed losing some idle time but society as a whole gains. including said hair dresser. Just as an example imagine £65B in extra business taxes and £1k cheque to every man woman and child. Hairdressors family would get £4k cheque and in return they work at a higher capacity. They then spend theor £4k cheque so some other business works at a higher capacity.

in effect they swap some of their idle time for products and goods they want. And the products they bought the creator swap his spare time for haircuts.

effectively this £65B in extra taxes and £65B in extra spending just reduced spare capacity and lead to a lpt more goods amd services being produced

tomterm8

cells wrote: »

Communism has never been tried in the electrified mechanised modern zero marginal cost society. Writing it off because it failed 100 years ago would be like writing off light bulbs because carbin filament bulbs were !!!! a hundred years ago.

not saying communism would work in todays machine age. But it might fare better now. Certainly it would be a good modern experiment for a mechanised nation to try just so there is the test case to see how it fares today

You can believe that if you want to believe it, Enjoy your time in the Communist clubhouse. Say hello from me to the quacks in the Flat Earth Society next door.

One of the basic tenants of communism, it's fundamental belief, is in revolution. Revolution always, everywhere, and on every occasion cause death, destruction and murder. Communism always and on every occasion causes death, destruction, and murder.

onlyroz

tomterm8 wrote: »

One of the basic tenants of communism, it's fundamental belief, is in revolution. Revolution always, everywhere, and on every occasion cause death, destruction and murder. Communism always and on every occasion causes death, destruction, and murder.

Seems to work OK in Cuba.