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New California Bill Proposes $1,000-a-Month Universal Basic Income (newsweek.com) 459

1 out of 8 Americans live in California. Now a proposed California law "would provide most adults in the state with a universal basic income of $1,000 per month, similar to the proposed plan of former presidential candidate Andrew Yang," reports Newsweek:
The California Universal Basic Income (UBI) Program was introduced by Democratic California State Assemblymember Evan Low on Thursday. Low was the co-chair of Yang's campaign and the proposal bears a striking similarity to the former candidate's national plan... The program would be paid for with a state value-added tax of 10 percent on goods and services, with exemptions for groceries, medicine, medical supplies, clothing, textbooks and other items. Recipients of several programs, including the state's Medicaid plan, would be ineligible...

Funding the program with a value-added tax has been blasted by some who believe such a tax would disproportionately burden the poor. Concerns have also been raised over potentially forcing people to choose between UBI and other existing public assistance programs... Proponents of UBI argue that the Yang plan and others could counter the anticipated problem of increasing automation inevitably leading to widespread unemployment.

Experts warn that a large percentage of the workforce is likely to be decimated by automation, with some studies estimating as many as 73 million jobs eliminated by 2030.

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New California Bill Proposes $1,000-a-Month Universal Basic Income

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  • Funded by VAT (Score:5, Insightful)

    by phantomfive ( 622387 ) on Sunday February 23, 2020 @11:38PM (#59759256) Journal
    Funding it with VAT or sales tax is more or less like taking money from people, and giving it back to them. Poorer people pay a higher percentage of their income on sales tax than rich people.
    • Re: (Score:2, Insightful)

      by nonBORG ( 5254161 )
      One question here, Illegal immigrants?
      Another question, are they not already bankrupt? (California that is)
      While I am asking questions, how is this similar to Alaska's Permanent Fund Dividend which is not money that has been stolen from hard working Americans via tax.
      • Re:Funded by VAT (Score:4, Insightful)

        by phantomfive ( 622387 ) on Monday February 24, 2020 @12:04AM (#59759316) Journal

        One question here, Illegal immigrants?

        Illegal immigrants pay VAT (and sales tax), so no problem there.

        • Re: (Score:3, Informative)

          They pay income tax too. They just can't declare it, and of course no refund.

          • Re: (Score:3, Insightful)

            by uncqual ( 836337 )

            Of course, if they are smart, they declare a zillion dependents to get their withholding reduced.

            • Re: (Score:3, Interesting)

              Heh, doesn't work like that, but I guess you are free to throw them out, and then I'm sure you'll be perfectly happy picking your own lettuce, or maybe you prefer to pay twenty bucks a head. You're gonna need more than a thousand a month though.

              • Re: Funded by VAT (Score:5, Insightful)

                by Way Smarter Than You ( 6157664 ) on Monday February 24, 2020 @02:28AM (#59759634)
                Actually, no. Labor is not the major cost in produce. Also, yes, I would prefer to pay $20 a head (it won't be but anyway) than have an underclass of people working under illegal and unethical conditions so you can have cheaper salad.
                Ethics. Try them out some time. You might like them. But they don't come free.
              • by Hodr ( 219920 )

                Heh, doesn't work like that,

                I don't remember my employers ever asking for social security numbers or other proof of the number of dependands I claim. They don't care if the witholding is correct or not, it will be your burden to fix it at the end of the year.

                Unless of course you don't plan to file. Then it's definitely in your best interest to minimize the witholding.

          • Re:Funded by VAT (Score:4, Insightful)

            by Antique Geekmeister ( 740220 ) on Monday February 24, 2020 @03:15AM (#59759728)

            Many do not pay income tax, since they are often paid cash "under the table".

      • Legal immigrants (Score:4, Insightful)

        by Roger W Moore ( 538166 ) on Monday February 24, 2020 @12:20AM (#59759370) Journal

        One question here, Illegal immigrants?

        Actually I would have thought that legal immigrants would be the bigger concern for the success of the system. If the system initially starts to work well then there is a risk that California would start attracting lots of low-income immigration from other states would could put the system under a lot of strain.

        • I don't know about you, but I've noticed a lot of cities around the country are running programs to attract yuppies. Many of these people are moving from California, and even though they are taking a huge cut in their annual salary, they are also benefiting from a huge cut in cost of living. While I don't support these programs as they throw the native demographics of the cities out of whack, I am certain it has also been as debilitating for California to lose such a large amount of high-skilled, highly pai
        • Then when enough of them get to CA it will become a red state and they can repeal UBI.
      • Re: (Score:2, Funny)

        by Brett Buck ( 811747 )

        Of course they mean illegal aliens, too, that can safely be assumed

        Yes, we are already bankrupt, and the cost appears to be *240 billion a year*, but that has no bearing on how many people think this is a great idea.

      • Re: (Score:2, Informative)

        One question here, Illegal immigrants?

        Does it matter? They pay taxes.

        Another question, are they not already bankrupt? (California that is)

        They run a similar debt/GDP ratio as Texas, so no, likely not.

        While I am asking questions, how is this similar to Alaska's Permanent Fund Dividend which is not money that has been stolen from hard working Americans via tax.

        Isn't it a central conservative argument that taxing business is just taxing the little guy in the end? How do you think the APF is funded?

        • by Xenographic ( 557057 ) on Monday February 24, 2020 @03:54AM (#59759800) Journal

          > How do you think the APF is funded?

          Since you asked, to simplify things a bit, the APF was funded from the state's oil revenues, then invested and managed by a corporation. It produces checks for about $1-2k per year to each person eligible. There are also certain standards for who is eligible (resident for 1 year+ and intend to remain indefinitely, are not in jail for or convicted of a felony or certain misdemeanors that year).

          There are a little over 30 million adults in California [census.gov] based on the latest figures I can see from the Census (n.b. you will have to do some math, taking the total population and subtracting the percentage under 18). I don't know what this proposal means by "most" adults, so let's say that implies at least 50% are eligible. 15M * $1,000 = $15 billion dollars every month. California's budget for 2020-2021 is $222.2 billion [ca.gov], so using another $180 billion (or more) in UBI payments would nearly double that.

          I really want to know just how big a sales tax increase it would take to basically double the state's budget. Would they have to double all taxes, or just go crazy with a VAT/sales tax? What's to stop businesses from moving out of state/country? I mean, don't Google & co. already use Ireland as a tax shelter?

          Incidentally, if you had Alaska's entire fund, you'd drain it in less than half a year with this spending (its website says that it's worth about $67 billion).

        • Re: (Score:3, Informative)

          California's finances do differ from most states in a crucial way: Their taxation is more progressive than most and raises a higher proportion from corporation tax, which means the tax they raise is highly variable and dependent on wider economic productivity. When the economy is doing well, California's tax revenue benefits more than most and they are swimming in money. When the economy is doing poorly, California is hit hard.

        • Re: Funded by VAT (Score:5, Informative)

          by argStyopa ( 232550 ) on Monday February 24, 2020 @06:59AM (#59760136) Journal

          Similar debt to GDP ratio to TX?
          Only if you're basically lying: https://www.forbes.com/sites/p... [forbes.com]

          California's real ratio is closer to Greece and Italy.

          Not to mention that while constantly increasing obligations, California is hemorrhaging people. Good luck with that.

          • Your ignorance is why everything is so fucked up, everywhere.
            We were discussing bankruptcy, and I brought up the fact that California's total outstanding debt to GDP ratio was close to Texas (17% to 16%)
            Then you dredge up some article that counts every single unfunded pension liability for every level of government in the state?
            That's intellectually dishonest.
            You're an idiot.
        • Re:Funded by VAT (Score:4, Insightful)

          by markdavis ( 642305 ) on Monday February 24, 2020 @07:57AM (#59760274)

          >">> One question here, Illegal immigrants?"
          >"Does it matter? They pay taxes."

          They pay sales tax. They usually do not pay Fed or State income taxes, or any other taxes. Working under the table also means there is no money going into SSI or Medicare either. So it doesn't amount to much they are paying.

        • One question here, Illegal immigrants?

          Does it matter? They pay taxes.

          They might pay sales tax but that's it. Then they get benefits from the government for their anchor babies. They take far more than they bring by all accounts. The total cost to the US, including taxes paid by illegals, is around $116 Billion a year. Each illegal costs more money than they bring in, and the open borders folks are dumb enough to try and make up for that loss with more volume. The link below has the details on tax revenue vs costs at both the state and Federal levels. Citation: https:// [fairus.org]

      • by rossz ( 67331 )

        One question here, Illegal immigrants?

        Given California's current policies, of course illegals will be eligible.

        A bigger issue is how many people will it attract from other states. We already attract excessive number of homeless. Only natural since it's better to be homeless in California weather than most other states. A thousand a month is a pretty big chunk of money if you are already homeless, but it's not going to help not be homeless given housing costs.

    • Re:Funded by VAT (Score:5, Insightful)

      by ljw1004 ( 764174 ) on Monday February 24, 2020 @12:02AM (#59759312)

      Funding it with VAT or sales tax is more or less like taking money from people, and giving it back to them. Poorer people pay a higher percentage of their income on sales tax than rich people.

      It's true that sales tax is regressive, i.e. poorer people pay a higher percentage of their income on sales tax than do rich people.

      Nevertheless, UBI funded from sales tax is progressive, i.e. poorer people get more benefit than richer people. Here's a worked example:

      Poor person, income $20, pays $10 in sales tax, gets $25 in UBI
      Rich person, income $1000, pays $40 in sales tax, gets $25 in UBI

      • Yea and rich people can afford to go outta state to buy things vs poor people who likely doesn't have the ability to make those long trips. All this VAT will do is people near border with another state will go to that other state to pay LESS.
        • by Ambvai ( 1106941 )

          Pretty much all the major population centers in California are hours away from the state border... and if gas prices are any indicator, the places just over the border will jack up their prices so there's not really any savings.

          And for any truly large purchases, you either have so much money that you're not fussed about a few thousand or you would've been shopping around to begin with... and with current California taxes, and location premiums, you're almost always better shopping out of state (or, dependin

      • Comment removed based on user account deletion
      • Re:Funded by VAT (Score:4, Insightful)

        by novakyu ( 636495 ) <novakyu@novakyu.net> on Monday February 24, 2020 @03:22AM (#59759742) Homepage

        Also, a lot of life necessities are exempt from sales tax (and this VAT proposal). A big relevant category is groceries---if you are eating at a restaurant or buying prepared hot food, you would be paying sales tax (and possibly this VAT), but if you are buying the ingredients to prepare for yourself, you are already not paying sales tax on those (and you will continue to not pay any tax, at least not directly through this VAT).

        Sales tax being regressive isn't exactly a surprise for policy-makers; they try to make it less regressive by exempting basic needs categories from sales tax.

      • by gweihir ( 88907 )

        Nevertheless, UBI funded from sales tax is progressive, i.e. poorer people get more benefit than richer people. Here's a worked example:

        Poor person, income $20, pays $10 in sales tax, gets $25 in UBI
        Rich person, income $1000, pays $40 in sales tax, gets $25 in UBI

        What, actual facts? How dare you counter propaganda lies with actual facts! And solid math at that, no less.

    • by mysidia ( 191772 )

      Funding it with VAT or sales tax is more or less like taking money from people, and giving it back to them.

      Not quite... The VAT would reduce the purchasing power of the $1000/month, but there would still be some purchasing power left, And in absolute terms, those earning more than 1000/month Would be paying more VAT than those on the UBI.

      Poorer people pay a higher percentage of their income on sales tax

      That is irrelevant. What is relevant is that poorer people pay a Lower number of dollars in sa

      • Re:Funded by VAT (Score:5, Insightful)

        by phantomfive ( 622387 ) on Monday February 24, 2020 @12:08AM (#59759338) Journal

        Poorer people pay a higher percentage of their income on sales tax

        That is irrelevant.

        It's not irrelevant. VAT always gives the rich a free pass. No matter how you arrange it, it's either the poor or middle class who end up paying most of it. Same goes for sales tax.

  • by AndyKron ( 937105 ) on Sunday February 23, 2020 @11:42PM (#59759266)
    Do I get a free tent too? I'll need one
  • an extra $12K would go a long ways toward paying for your foie gras and truffles. Maybe even some cake.

    • You would give all of that back at the end of the year in taxes. The idea is that if you suddenly lose your job or whatever the money is there without going to a government agency.
  • California is currently facing a $1.5T debt and needs to raise upwards of $20B in taxes just to leave its current budget with a modest surplus. All the while, people are sleeping on the streets and under bridges everywhere. And now you're proposing to add on $40B+ in taxes just to give it back to the people you took it from?

    • That number consists largely of “estimated unfounded liabilities” by Moody’s and not any of the respective agencies. It also conflates state and local debt, and is based on a few selective overly-negative data points (mixing years mainly).

      While I am happy to no longer be a California resident, the state is in a healthy position.

  • with some studies estimating as many as 73 million jobs eliminated by 2030.

    I assume people in 2030 reading this are having a good laugh.

  • well considering what, 1/3 pay some taxes, then it's more like a $5k+ tax hike.

  • OK me bad, not sure it will work, but Good Luck California. One of the great things about America is that States can test things out so everyone need not suffer mistakes.

    Just my 2 cents ;)
  • by Anonymous Coward

    People deserve the government they elect.

    I find it very unlikely that the state of California has a money printing press in the basement of their Capitol building, which will be used to print all this money. The California state government cannot print all this money. They must obtain this money from somewhere. The only source of money for the CA state government is income and property taxes. They must get this money in form of new income or property taxes from their current residents, or borrow that money,

  • by taustin ( 171655 ) on Monday February 24, 2020 @12:39AM (#59759426) Homepage Journal

    California has 40 million people. At least half of them are adults (more, actually, since the birth rate is so low, but it's a nice round number).

    20 million people x $1,000/month is 20 billion dollars per month

    They're talking about doubling the state's budget, plus whatever "administrative" graft and corruption it takes to administer the program (which will be considerable).

    The VAT would need to be something on the order of 100% to support that. Maybe higher.

    They'll try, and the chickens will finally come home to roost. And states cannot file bankruptcy.

    Should be a spectacular shit show. From afar.

    • Re: (Score:3, Insightful)

      Maybe this is more complex than 'some basic arithmetic'.

      No doubt this will relieve a number of social welfare programs, both reducing money given out, and staff working on these issues, reducing a lot of budgetary expenses.

      For many people, that small boost will result in much less reliance on other government support programs, and also possibly reduce crime if not feeling 'forced' into it due to lack of income (and so a reduction in policing and prison costs). Maybe with a little extra people can do more pr

      • by PrimaryConsult ( 1546585 ) on Monday February 24, 2020 @01:54AM (#59759568)

        Here's the problem with reducing other government programs to compensate; if the poor person blows the entire UBI on drugs or gambling, they still need all of the government programs they're currently on. For some reason 'personal responsibility' is anathema to the modern day left, so those programs will remain to cater to the irresponsible, while *also* having to spend money on UBI.

      • Re: (Score:3, Insightful)

        Comment removed based on user account deletion
    • 20 million people x $1,000/month is 20 billion dollars per month

      Close but off by a bit. Let's strive for accuracy. The Googles say there are 30,000,000 adults, times $12k a year is $360 billion. I think our annual budget is around $200 billion. As a result, you're basically right, this UBI would triple our current budget. There may be 30 million adults in California but Assemblyman Low apparently isn't one of them.

      The only way a UBI is even remotely possible is if we cancel all other social safety net program to fund it (which I think is an interesting but still problem

      • Re: (Score:3, Interesting)

        Maybe I'm mistaken but I thought the entire point was for UBI to replace all other social safety net programs. Which has the added benefit of saving time, money, and effort from administering the various programs.

  • No Gain (Score:5, Insightful)

    by lucia-om ( 4025927 ) on Monday February 24, 2020 @12:39AM (#59759428) Homepage
    That's a terrible idea; leave existing programs alone and don't dispense money in a publicly known way. Rents would rise, as well as other costs, eating up the whole "giveaway". It is a giveaway to those who benefit from a trickle-up income. Our rent has risen by $581 since 2012, and most of the continuous increases began at exactly the same time as the first dollar increase in minimum wage. It went up twice before November 2019, the last time by $96. And *that* was in preparation for the 2020 rent control bill. Want to help people? PG&E bills have more than doubled so that we the customers can pay for the company negligence - how about giving away money to them ( why not, if they are legally allowed to do as they do?) that they will steal from us - and force the rates back down? Giveways would be okay if the recipients were the actual recipients of them!
    • That's a terrible idea; leave existing programs alone and don't dispense money in a publicly known way. Rents would rise, as well as other costs, eating up the whole "giveaway".

      I think it will be quite complicated to predict how markets would react. "Quite complicated" is a polite way of saying "impossible." This proposal uses a very large VAT and God only knows how that will affect prices. Some things will go up a lot, others (in very competitive markets) not so much. Similarly, this would shift an enormous amount of spending power around and it would be very hard to predict what that will do with any precision.

      That being said, my guess is this would wind up helping those at the

  • Hm, just off hand I can think of few things that are better for expanding the barter economy.

    It is time for Californians to wake up and "fire" the lunatics they have running the show here. Alas, I don't think there are any California politicians who have the sanity required to do what is needed.

    {O.O}

  • And don't forget to offer it to illegals as well, for more comedic effect and self-pwnage.

  • There are about 40,000,000 people in CA who will get $1,000 per month for 12 months. My calculator tells me that is: $480,000,000,000 / year ($480 billion / year). The current CA budget is currently $222 billion per year. This should be interesting.
  • Maybe it lowers GDP because people work less, or maybe it raises it because people feel empowered to take risks. How am I the only one here not completely sure of the outcome of something that's never been tried before?
  • Where around here are you going to live for $1000 a month?
  • by blitz487 ( 606553 ) on Monday February 24, 2020 @01:44AM (#59759562)
    Surf all day, sleep on the beach, get free money for nothing, what could go wrong?
  • by kenwd0elq ( 985465 ) <kenwd0elq@engineer.com> on Monday February 24, 2020 @03:25AM (#59759748)

    Provide "free money", and the costs will rise in tandem. College loans keep rising, but the COST of college rises even faster. A $1K "UBI" will just cause rents to rise to match. "You can afford more? Then it'll COST more!"

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