There's no reason why the amount going to poor people under UBI should be less. Money goes out to more people (everyone), but the higher brackets would pay more, so it'd be a wash. IE, the millionaires get an extra $10,000 a month than they would with a negative income tax, but end up having to pay an extra $10,000 a month than they would with a negative income tax.
As for why UBI is preferable, let's look at some situations. If a person gets fired in May and needs the extra income, with the UIB it would be coming in already and they wouldn't need to worry about anything. With a negative income tax they would probably need to apply to some government agency, at which point they would either start sending the person payments whenever they get a chance to review the application (which could take weeks or months), or they deny the application for one reason or another and the person has to appeal/send more evidence and try to navigate a bureaucratic maze while they're running out of money.
Or a person is self-employed, and at the beginning of the year they believe they will make too much to get the income, then mid-way through the year their business slows to the point where they start going through the bureaucratic hell of the previous person, and then after a few months some new clients come in and they start trying to navigate the bureaucracy again to update the agency without a penalty.
I don't know if you've ever applied for benefits like these, but very often things turn into a mess, and you're spending weeks calling different offices and waiting for thing to go through, at which point your eligibility changes and you have to start over again. UBI doesn't eliminate all issues, but it's simpler in the same way that sending your kid to the local public school is simpler than trying to get support using the FAFSA.
Also, with the checks going out to everyone it's going to be hard to get rid of something like that (look at Social Security for an example of this).
Thanks. I think I like your answer the best. I hadn't considered what happens when income situations change drastically during the course of a year. Let's talk about the case of a highly compensated individually who is foolishly living paycheck to paycheck. Let's say they those their job on July 1. With universal basic income, they'll keep getting some small amount of money to live on each month. They may have to downgrade apartments or locations, but they're still OK. With negative income tax, they've already exceeded the $60K phase-out for the year, so they get no help for the rest of the year, and since all entitlement social net payments have been phased out in favor of the NIT/UBI (including unemployment), they're fucked. They have half a year to go during which they get absolutely nothing before the NIT can kick in the next year.
So you'd need NIT on a resolution of months, not years, for it to handle the situation of unexpected job losses, and frankly I'd rather run screaming rather than have to handle taxes monthly.
UK: this is an attractive part of the basic income proposition.
I think such a scheme might also promote risk-taking in employment in the sense that people might be motivated to try stuff they would not normally try e.g. setting up their own micro-business or working on temporary contracts.
Now, the OA is talking about a pilot. How do those work? How do you decide to ring fence the residents in the region you are trying it in? Why could not I just move over there for a couple of years during the pilot?
I agree. It should have been done, and the benefits system mostly abolished, decades ago.
Given the organisation of welfare in the UK it is so very, very easy to fall through the gaps. It's designed for the world of the 1930s-70s. There's no point in a safety net unless it's reliable, and it clearly isn't.
If you had a simple 9-5 job and been made redundant, with P45, the system seems to cope. If you are self-employed, an ex-busines owner, or juggling multiple, possibly zero hour, contracts the system breaks utterly. Claiming seems to be an entirely manual process with various people employed to validate, check and ask questions, so it is very expensive to do.
If you knew you were getting that £100 (or whatever) a week, every week regardless, you'd risk the uncertain project, or even the second attempt, learning from your mistakes. The system right now puts you off ever trying anything not 9-5 again, because you'll know it'll be months to get any help out of them.
Of course, like talk of simplifying the tax system, I am not optimistic it will ever happen. Or it will be an ineffective token gesture that solves nothing.
As for why UBI is preferable, let's look at some situations. If a person gets fired in May and needs the extra income, with the UIB it would be coming in already and they wouldn't need to worry about anything. With a negative income tax they would probably need to apply to some government agency, at which point they would either start sending the person payments whenever they get a chance to review the application (which could take weeks or months), or they deny the application for one reason or another and the person has to appeal/send more evidence and try to navigate a bureaucratic maze while they're running out of money.
Or a person is self-employed, and at the beginning of the year they believe they will make too much to get the income, then mid-way through the year their business slows to the point where they start going through the bureaucratic hell of the previous person, and then after a few months some new clients come in and they start trying to navigate the bureaucracy again to update the agency without a penalty.
I don't know if you've ever applied for benefits like these, but very often things turn into a mess, and you're spending weeks calling different offices and waiting for thing to go through, at which point your eligibility changes and you have to start over again. UBI doesn't eliminate all issues, but it's simpler in the same way that sending your kid to the local public school is simpler than trying to get support using the FAFSA.
Also, with the checks going out to everyone it's going to be hard to get rid of something like that (look at Social Security for an example of this).