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Comment Re:U.S. profits too??? (Score 1) 160

The second component is profit moving - the resultant profits can be moved between the resident company and the non-resident company at no (or extremely low) taxes, but moving the money out of the EU to the external HQ would be taxed heavily from Ireland. However, this is not taxed heavily in Holland (due to historical attachments to the Dutch Antilles). So the organization move the money to Holland (inter-EU transfer, low tax), and from that subsidiary to the tax haven (Dutch law, low tax) and then have it in a tax haven for a very low cost. Where they sit on it because the US tax is punishing.

Thank you for the accurate clarification, this is indeed so and I should have explained it in more detail but I was running out of time and had to post an insufficient explanation of the scheme.

The solution is not higher taxes, it's closing these gaps that companies exploit.

You are indeed correct. This case (and other like it) revolve around whether or not the companies can be taxed for using those loopholes (which are now either closed or being closed) in the past. In other words what's being debated is whether or not the national Dutch/Irish laws that have been exploited for this effect were in line with EU laws and agreements,

Comment Re:U.S. profits too??? (Score 5, Informative) 160

Apple doesn't transfer U.S. profits to to the EU, so how is it fair for the E.U. to tax Apple on U.S. profits again exactly?

To my understanding this is not about US profits. The 14 billion comes from Apple applying what's known as the double Irish tax loophole that used to exist in Irish law, allowing them to effectively dodge paying taxes to either the EU or the US. Quoting the wiki:

two Irish companies are used in the arrangement. One of these companies is tax resident in a tax haven, such as the Cayman Islands or Bermuda. Irish tax law currently [NOTE: not anymore, wiki wording is out of date] provides that a company is tax resident where its central management and control is located, not where it is incorporated, so that it is possible for the first Irish company not to be tax resident in Ireland. This company is the offshore entity which owns the valuable non US rights that are then licensed to a second Irish company (and this one is tax resident in Ireland) in return for substantial royalties or other fees. The second Irish company receives income from the use of the asset in countries outside the United States, but its taxable profits are low because the royalties or fees paid to the first Irish company are tax-deductible expenses. The remaining profits are taxed at the Irish rate of 12.5%.

For companies whose ultimate ownership is located in the United States, the payments between the two related Irish companies might be non-tax-deferrable and subject to current taxation as Subpart F income under the Internal Revenue Service's controlled foreign corporation regulations if the structure is not set up properly. This is avoided by organizing the second Irish company as a fully owned subsidiary of the first Irish company resident in the tax haven, and then making an entity classification election for the second Irish company to be disregarded as a separate entity from its owner, the first Irish company. The payments between the two Irish companies are then ignored for American tax purposes.

The loophole was closed last year:

Under Finance Act 2015, a new system has been introduced whereby innovative companies who choose to incorporate in Ireland can now benefit from the introduction of the Knowledge Development Box (the “KDB”) in Ireland, the scheme is seen as a replacement for the “double-Irish” tax system which was recently closed. An effective tax rate of 6.25% can be obtained on qualifying profits generated in periods commencing on or after 1 January 2016.

So Apple (and other large tech companies) have been using both the double irish as well as its other variant the Dutch Sandwhich which functions similarly, to dodge taxes on both sides of the Atlantic, while claiming to European tax-authorities that they're paying tax to the US, and to the US that they're being taxed in Europe, while in reality the majority of the income is not taxed in either. The EC is arguing that the use of these loopholes goes against EU regulations and that they now want these companies to pay what they actually should have been paying all the time. This is going to drag in courts for a long time, and Apple is going to claim that since it functioned within Irish law (at the time) it shouldn't have to pay anything. The EC on the other hand, is going to build their case on the grounds that the Irish law itself that allowed for this arrangement was in breach of EU law and cannot be followed and back-taxes are owned.

This whole case is one of several ongoing ones regarding the use of tax-havens to dodge corporate taxes, which has been (and still is in some senses) relatively easy to do for large multinationals. The EU is currently trying to crack down on it, whereas the US, especially now under Trump's heavily wall street backed cabinet, is going to be unlikely to do much and is probably going to take the side of american companies, despite the fact that by doing this they're essentially aiding - and encouraging - American companies in to engage in tax-evasion, which is in the end also hurting US tax-revenue.

Comment Re:Hyperbole stew (Score 2) 507

I forget where, but it's been said "If you don't give weight to your principals, then the first wind will carry them off

I agree with this completely. As a Finn I've often been pondering recently what I'd do if the time comes to visit the US for business reasons or otherwise and this idea of just getting brand new device to bring along has been in my thoughts. However, in the context of your quote it has one massive setback: it's yielding to the system by saying 'fine, I agree that you can search everything I have so I bought a device with nothing on it'. It's not going to help the situation in the long term.

In fact I can see this kind of behavior being used to tighten the screws of surveillance even more: "Sir, we have noticed that you are on Facebook/Gmail/twitter but you're not logged into any of those on your device, please provide the passwords so we can verify you're not trying to hide any illegal activities'. That is, having a 'fresh' wiped device could itself be in the future seen as cause for 'reasonable suspicion', only making the problem worse.

In so far as I can see, the only way is not to try to go around the surveillance by means of technical solutions, but to oppose it in courts en masse. It's a hard route to take, but failing to stand up for your constitutional rights will, in the light of history, only lead to them being slowly chiselled away.

Comment Re:Slippery slope (Score 4, Insightful) 104

Another reason not to rely on a corporate website for your news and information.

So you don't read any non-tax funded news-sites then, you know the ones ran by news corporations?

But honestly, it's facebook's decision to decide whether or not they want their platfrom to be used in distribution of non-factual/made up 'news'. I personally do not get my news from FB but I've seen the amount of entirely made up 'news' from blogs that have been shared in the recent years. A simple thing that I've seen repeated time and time again here is this: someone files a report about an immigrant committing some crime, usually theft or assault. The yellow-press then runs this with a headline along the lines of 'Immigrant man under investigation for crime X'. Then some nationalist blog made up to look like a news site runs an article with the headline "yet another immigrant crime, man from *insert country* harassed a teenager.", then, to appear more credible they link to the previous article about an ongoing investigation.

These spread like wildfire on social media because the headlines are usually shocking and they pander the the preconceived notions and fears that people have, and nobody bothers to check what the source actually says. If you point out in the comment section that the guy has not in fact been convicted of anything and it's an ongoing investigation (you know, innocent until proven guilty and all that) you get attacked for being 'on their side' or 'defending criminals', nevermind that no crime has of yet been proven to take place. If the guy is convicted it's trumpeted again as evidence of how all brown people are dangerous criminals and/or terrorists. If charges are not raised at all or he's found to be innocent, no correcting stories are run.

There are several sites operating mainly using this principle, many of them receiving funding or support from Russia, which is taking advantage of the immigrant crisis here in Europe to stir up xenophobia and nationalism because a divided and weakened EU is to their benefit. RT is a common 'source' used by these sites, Many of them also cross-link to each other, so that a blog being run in sweden is used as source by blog here in Finland. The traditional media obviously does not report on unsubstantiated rumors which is then further used as 'evidence' that the media is involved in some sort of massive 'cover-up' by not immediately reporting everything someone decided to blog about,

This is what 'alternative facts' mean, and personally having seen how fast these things can spread even after officials come out and issue corrections, I don't mind social media trying to do something about these sites' visibility, because without the massive speed/inertia that they gain by quick shares and likes they'd be in near obscurity. They are only damaging public discourse, because it's now impossible to even try and have a rational discussion with many of these people as they will not accept any news or reporting from the 'corrupted mainstream media' as evidence that they've in fact been duped by propagandists and ideologues. As a test, reporter from a newspaper submitted a story about being attacked by a foreigner(s) last summer and it was immediately published even though no source or evidence was presented. They'll pretty much run everything that serves their agenda, because that's what propaganda is.

I see no reason why facebook should allow this to keep happening. They already censor stuff like nudity and gore out, and I don't see nudity and gore anywhere near as dangerous to the society as made up 'news'.

Comment Re:Not about the free market (Score 1, Insightful) 914

This is a bizarre little trick, apparently some weird leftover piece of Cold War propaganda, that any time a topic has anything to do with the free market you can point that out and a significant minority of people will believe you've just "won" the discussion and will mod you up, even if you're rambling irrelevant drivel.

I believe you're on point here, and it's not just an american thing either. As a Finn I was recently discussing politics online here with a Finnish libertarian type who was of the opinion that we should move away from our current model of healthcare towards a more market oriented solution because 'the free market is more efficient'. I've previously written at length here and elsewhere why I do not believe this is the case for health production, but that's a side point. What's interesting is that when I inquired from him how he explains the current situation in the US, which, despite being more market oriented is both massively more expensive and non-universally covering, his answer was that the US model was not 'free' at all and should be avoided. Upon further discussion he said he agrees with the clause in our constitutions which guarantees health care to people regardless of their economic status. So despite wishing for more private contractors with (IMO) bad reasoning in the name of 'more freedom', his operational definition of a free market differs from his american libertarian counterparts who tend to believe that no-one should get treated unless they can pay for it or or get some other individual to pay for it.

I'm taking this up because this highlights the core problem of the term: it doesn't have a clear meaning. There are those who genuinely believe that the only truly free markets are those in which no regulations exist, essentially an anarchocapitalist view in which anything that comes between the seller and the buyer is deemed as bad. Then there are those (such as myself) who believe that a certain amount of regulations is needed for a market to be truly free because the point of laws and regulations regarding trade is to ensure that no-one's taken advantage of. This is why consumer protection laws exist.

The problem is in the term itself. It says 'free'. Who doesn't like freedom? But what it means for say, an investment bank or an oil giant to be 'free' is entirely different than what it means for me an individual to be 'free'. My freedom as an individual depends on things such as the infrastructure (funded by taxes), the environment not being destroyed, being protected from illness and violence and so on, whereas for the companies their 'freedom' equates solely to their ability to make as much money as possible without being hindered. An oil company has no qualms about pursuing methods destructive to the global ecosystem because they as an entity do not care about the environment. And I don't believe they should, companies are by their nature amoral, they're entities driven by profit and profit only, and that's alright. However if we recognize this we should also recognize that there's no way for everyone to have total freedom. The purpose of a civilized society should be to make sure that the trade and business being conducted within it is not causing excessive damage to people. We should not expect giant corporations to grow a conscience but we should instead impose the collective conscience of the society on them in the form of laws. Therefore, in my idea of a truly free market the companies would be restricted from pursing tactics that are detrimental to ecosystem that we all depend upon.

Point being: whether or not a given action is performed in a free market or not has no bearing to its morality. Slaves were once traded (and still are, in some parts of the world) in the free market. Tobacco manufacturers once used the free market to dole out massive amounts of blatant misinformation about their products to consumers. The companies knew long before the general public did that smoking causes cancer. Now that the marketing of cigs is banned in most countries the market has become less free. Should we therefore seek to return to the era of 'doctors smoke Camel' advertising solely on the basis that this would increase the freedom of the companies to operate?

Or to use a modern day example the US is one of only 2 countries that allows direct to consumer marketing of prescription drugs. As a result the profits of the pharmaceutical industry have gone through the roof, as has the prescription and addiction rates of opiates and other meds in the US. Prescription related overdoses kill more people than illicit drugs. Is this model therefore superior regardless of its detrimental health effects solely because it's 'more free' than the laws in other industrialized countries?

Does that violate the first amendment? Again, no. Is this capitalism at work? Again, yes. You're such a good, smart little anti-Communist for reminding us of these things!

But us talking about it and getting a bit pissed about it and wondering aloud if there's any way to pull the brake on this shitshow before it gets any worse is also capitalism at work. If that's a conversation that doesn't interest you--there's the door. Vote with your feet, citizen.

Yes indeed. Just because the free markets (rightfully) defeated communism does not mean that the 'free market' can or should be used as an end to all discussion about ethics. Business is always subject to democratically defined rules, not the other way around.

Comment Re:Good on him (Score 1) 225

Your post reads exactly like so many others around the first several self-driving car competitions.

If you read it that way you did not understand it. The difference is the problems faced by self-driving car development are computational. The people who said:'oh cars can could never drive themselves' were essentially arguing 'oh compuers can never handle all the variables' and so on. Because of Moore's law etc. those who were up to dat on the progress of computing knew that this wouldn't be the case going ahead, as we're now starting to see.

The problems faced by hyperloop are not computational, they're cost-benefit oriented. Given enough money, the hyperloop could surely be implemented already, even though the cost would be at or beyond space-program levels. Building vacuum tubes and maintaining them against leaks and other safety dangers is not something we can project will become masively cheaper to do in the near future. The cost estimates hyperloop itself thus far has presented assume for example zero maintenance costs and so on. The cost calculations are not even 'optimistic', they're simply wrong.

With self-driving cars the argument to be made for them could be constructed even way back 10-15 years ago by noting the obvious fact that computers are getting smaller, cheapr and more efficient at a relatively steady pace. The same is not true for the kind of tech required by hyperloop to work at the cost-ranges that they've been using in their plans and presentations,

Will it work? Who knows...but I certainly wouldn't discount it because in the first try EVER didn't have any resounding success.

I am not rejecting them based on the failed first test. I'm not rejecting the concept at all. I'm rejecting the economic feasibility of the concept based on the fact that the instances behind Hyperloop have not presented any kind of data which would lead me to believe they're even at the beginning stages of starting to solve the engineering obstacles required to get to the price-point they've been advertising. The test is just an example of these issues. Like I said: if there are major breakthroughs in vacuum technology or so on, things may be different. But right now they're holding pod-design contests for student teams when they do not even have solutions for building the tube itself at costs levels they're claiming they can get to, nor any plans on how to get there.

If these change, I will gladly change my mind, hyperloop would be a cool thing. But all fact considered, it so far remains economically speaking a pipe-dream.

Comment Re:Good on him (Score 5, Interesting) 225

Will it work? No idea, but at least he's trying.

With Musk the right question is never 'will it work?" but 'will it make any sense factoring in the costs?'

In theory something like the Hyperloop is a great idea. Until you realize that the costs and dangers involved in building a several hundred mile vacuum tube, and keeping it depressurized would cost astronomical amounts of money. The test track the built for the recent pod-competition for hyperloop was less than a mile long and its still the second largest vacuum tube ever built. Took about 30 minutes to depressurize and top speeds were around 60 mph, and that's with them being pushed by an external motor unit, the pods themselves didn't even have functioning engines. The moment the external motor 'released' the pods they pretty much froze, with most of them not even making it across the finish line.

The practical difficulties in doing this on the scale and speeds that the hyperloop project has been painting (600 MPH over a distance of hundreds of miles) are so enormous especially taking into consideration the kind of safety features that'd have to be included that economically speaking the hyperloop is not going to happen in any foreseeable future barring major technological breakthroughs in vacuum technology and structural engineering. The cost-benefit ratio is simply way too poor.

Now theoretically, you can eliminate some of the technical issues such as thermal expansion by by burying the hyperloop underground, but that increases the cost even more.

Is he crazy? Since he has so much money, and since he's not destructive, no, he is not crazy, he's eccentric.

Agreed. He's an eccentric man with a lot of ideas, some of which turn out to be economically feasible/profitable, while other are not so.

Comment Re: the GOPs policies were WORSE (Score 1) 113

Just fuck off. Slashdot isn't a partisan political forum.

Judging by the amount of political news and commentary on a daily basis here you're massively mistaken.

Nerds aren't into parties and playing politics

As a nerd that's very much into politics, political discussions and debates and has been having them on this very site for several years, I'm going to throw you own words back at you and kindly ask you to just fuck off. You are not the arbiter of what nerds are and are not into.

Comment Re: Free (Score 1) 258

You seem to assume people without education are not responsible for being without education.

No I'm not. However, even if all people had a university level education, someone would still have to do all the low-skill jobs. There need for lower skill jobs is still there, and it makes no sense that those jobs are now partially performed at a wage-level which is not livable. In a sensible society anybody working full time should make enough money to not have to rely on external aid.

Why should I pay more at Walmart just those those assholes who called me nerd and wanted to have babies with drug dealers now have to scramble for their jobs?

Because you're already paying for it but currently do not seem to realize it. What you 'save'* in slightly cheaper prices Walmart gets by paying sub-livable wages you lose in increased tax-costs caused by their workforce having to rely on government aid to get by. You're not saving any money, you're only helping Walmart take advantage of the public safety net to increase their profits. The people need a certain minimum amount of money to get by their everyday costs of living, and if they cannot get it from their job, the rest will be covered by society.

Everyone gets a free high school education here. Everyone without an education CHOSE to not have one.

If you think you can get a well paid job on a HS diploma only, you're totally clueless as to the job requirements of this day an age. University degrees are required for nearly every better paid position. The best you can get with a HS background is jobs like fast food and retail.

Your entire argument makes zero sense, because walmart & co paying sub-living wages is not benefiting you, or the economy as a whole, at all. In fact it's doing the exact opposite, and yet here you are defending it because you do not seem to understand the bigger picture involved at all.

Comment Re: Free (Score 2) 258

And yet, with all the other options available to them, people choose to work for Walmart. Why do you suppose that is?

Because getting some money is better than getting no money. It's not like the poeple who end up working in a wal-mart have a wide choice of places to work in. You seem to assume people without education can simply pick where they work. If there were masses of jobs with a higher pay than wall-mart's available, obviously people would rather work somewhere else.

Secondly, this is not the case for all wall-marts everywhere obviously, so there are (to my knowledge) states in which the pay is higher and hence it's a better place to work.

The alternative to working is being poor. The fact that people still opt to work for sub-optimal/sub-livable wages is not proof that those wages are livable, it's proof that a sub-livable wage is superior to no wage at all. Doesn't make it an ethical business practice.

Comment Re: Free (Score 5, Interesting) 258

Living wage, no such thing.

What? A living wage is an easily definable concept: a wage at which people workign full time with said wage can maintain a normal standard of living, that is, afford housing, food, electricity, and so on. :

People can bitch about Wal-Mart all they want but they have shown to be willing to work with people like my kid. I don't agree with all the crap they pull but I won't fault them for taking care of their employees.

The plural of anecdote is not evidence. I'm glad your son has gotten employed, but keep in mind that wallmart's abuses towards their workforce are such that they even have their own wiki article'

In 2008, Walmart agreed to pay at least $352 million to settle lawsuits claiming that it forced employees to work off the clock. "Several lawyers described it as the largest settlement ever for lawsuits over wage violations."[ - - Because Walmart employs part-time and relatively low paid workers, some workers may partially qualify for state welfare programs.[52] This has led critics to claim that Walmart increases the burden on taxpayer-funded services.[53][54] A 2002 survey by the state of Georgia's subsidized healthcare system, PeachCare, found that Walmart was the largest private employer of parents of children enrolled in its program; one quarter of the employees of Georgia Walmarts qualified to enroll their children in the federal subsidized healthcare system Medicaid.[55] A 2004 study at the University of California, Berkeley charges that Walmart's low wages and benefits are insufficient, and although decreasing the burden on the social safety net to some extent, California taxpayers still pay $86 million a year to Walmart employees.

As this article well puts it:

Wal-Mart Stores raised its minimum wage to $9 in 2015 and to $10 in 2016, after years of protests by workers. While important steps in the right direction, these increases are not enough. An employee working 34 hours per week (which Wal-Mart considers full time) at $10 per hour still earns less than $18,000 per year and cannot meet her family's basic needs on Wal-Mart's wages alone, even in states with low costs of living, according to a recent study.

Why does it matter? Wal-Mart is the country's largest private employer, with 1.5 million employees in the United States alone. And it's a hugely profitable one: it generated $482 billion in revenue in fiscal year 2016. The company simply cannot justify its meager pay practices."

Etc. So they're paying a below livable wage and then making their employees use benefits to try and survive. They're essentially subsidizing a large part of their labor costs with tax-money because what they're paying people is not enough to live on in many areas.

I totally disagree that this is 'taking care' of their employees. It's blatant abuse, of both the employees themselves as well as tax-payer money that has to be spent on their employees on account of them not paying a livable wage or offering proper health care.

Comment Re:Uh oh, baby being thrown out with the bathwater (Score 4, Interesting) 99

The problem is that Valve, while being a multimillion dollar international powerhouse, doesn't actually want to do any work on things like customer service or maintaining their store.

They don't want to do it because they don't need to do it because they're so huge. It's the same problem as with facebook: the inertia both FB and Steam got from being the first to deliver a service has launched them so far ahead in the market that they're pretty much indestructible at this point. I mean sure, there are competitors out there but steam is so far ahead above the others that they don't have to worry about losing their spot.

Think about the fact that steam is the only thing that pushes ads onto my desktop from time to time. Then think about the fact that sometimes I've bought games from these ads if the discount is good enough. Valve knows the types of games I've purchased, what I've played, for how long, what kind of hardware I'm running, etc. They have pretty in depth stats about my gaming habits from the past 10 years. This information by itself is something that none of their competitors can ever have access to, and it's worth a lot to them. Targeted advertising is not just done on websites.

They have taken advantage of this by building the sales/discount system so that even though pretty much everyone agrees that Steam's customer service and quality control are bullshit, most of us still end up using the service because of the value it offers. It's a sort of abusive relationship: we all know that the only way to teach Valve a lesson would be to stop using steam altogether and head to their competition. But people have to start steam to play their library of games, at which time it usually reminds you that this or that game happens to be 70 % off now, and sooner or later relapsing occurs.

People don't really switch from Facebook to other similar competing social platforms because FB has their images, posts, and connections. Competition is difficult with both Steam and facebook because to efficiently compete with either of these you need access to at least some of the information currently only possessed by these companies, and they sure as hell are not going to hand it to you.

Comment Re:The republicans will... (Score 1) 399

You can hire someone to do a job that you cannot today because the benefit added is lower than the cost

The whole problem faced by advanced economies is that the marginal utility of an untrained individual is approaching zero, though it's not there yet obviously. The more automated we become, the less value an untrained individual will be able to generate.

When talking about this subject many often bring up farming as an example of a field that was once heavily reliant on labor, became automated and the people didn't become unemployed. This is true because the skillset that the people who worked on farms could be transferred to other jobs at for example factories with relatively little cost (ie. no large amount of training required).

However now as more and more menial jobs are being performed better, faster and with less mistakes by a machine, the likelihood of an untrained or lowly educated individual finding a job is getting smaller and smaller. Invoicing and other data entry jobs are a good example of something that we know for sure will be gone in less than a couple of decades by and large, and there are people whose main function has been to operate a PC and enter data either from documents into the computer or from within one system to another etc. Once it becomes cheap to automate these tasks entirely, there simply is no point for companies to hire individuals to do it. The machine can handle varying workloads at tight schedules and does not require heavy monitoring, does not sleep, take days off, etc.

The data entry skill set will become worthless sooner or later, and in order to find a new job, these people need to retrain themselves, which obviously is not possible for everyone. But the core point to keep in mind that we're heading into a future in which machines can perform increasingly complicated tasks at a level equal to or better than low-skilled individuals. Transportation/logistics is another such example: once automated driving gets better and more widespread, there's simply no reason to have human drivers for most situations anymore; computers get into less accidents and can work 24/7, so even if a human truck driver offers his services at a reduced cost, he's not going to be able to compete in a market where the automated vehicles are driving non-stop without breaks using real time data from other vehicles and the internet to optimize its route around traffic jams etc. The initial investment required by a self-driving car/truck is obviously higher, meaning that at first human drivers can still compete against the machines with lowered salaries. But the closer the price of an automated unit comes to the costs of a manually operated unit, the less sense it makes to keep the human in the loop. Once the costs are on par the humans will lose their competitive advantage altogether and the job will become obsolete. That is, a point will come wherein even if the human driver works for free, the machine is a better choice because it does more work in less time, just like a tractor is a better choice than hiring people to manually work the fields with horses, even if they'd offer to work for no pay because the former is vastly more efficient and therefore way better for productivity,

So to clarify: I agree with you in part, but we cannot and should not assume there will always be a marker for low/no-skill jobs in advanced economies.

Comment Re:The republicans will... (Score 1) 399

If you have an UBI of 800 bucks and you now earn 1000, having a wage of 200 bucks would mean that you get equal pay.

No, no it wouldn't the whole point of my reoply to you is that none of the BI models anywhere are tax-free, and a wide scale implementation of it requires changing the way taxes work to fund the model. Under the suggested model I used as an example someone would have to earn 637 euros to make a 1000 euros after the increased income tax of 41 % is rediced from their pay and the BI is added on top. So your math is off. Obviously my example was just one model, but your math does not work in any of the BI models being discussed, because they all swtich taxes around to make sure the model is funded, which means that you cannot calculate it in the way you did without getting a skewed result.

Paying 200 instead of 1000 is cutting the price tag of that employee to a fifth, essentially meaning that he could hire 5 people for the same price as one today

Not to a fifth. As I've been trying to say the de facto effect on employee costs is much smaller if similar income levels are to be maintained, as they should be.

What every country does have a problem with, though, is keeping its lowly skilled (and hence lowly paid) population occupied. UBI could easily take care of that problem.

Well, UBI will help to that end yes, but it's not as if the need for low-skilled labor is going up even with UBI in use. Manufacturing and storage and office jobs are fast being automated already. In 10-15 years, even if I can hire 1,5-2 employees at the price of one with an UBI backing them up, it's still more likely that an entirely electronic solutions will be more cost effective, and you need maybe 1-3 guys to oversee it.

UBI is needed because unemployment will keep creeping upwards, and skyrocket when general level AI hits in X number of decades. but to assume that UBI alone, just by making employees slightly cheaper to the employer, is going to generate demand for low-skill/no-skill jobs is not exactly something I'd agree with, because the point will come weherein the cost-benefit ratio of machines will simply make those human jobs obsolete. But at least with a UBI at a proper level, the unemployed masses will have money to live their lives and participate in society.

Comment Re:The republicans will... (Score 4, Insightful) 399

Instead, what will most likely happen, is that companies will get away with offering WAY less money as compensation for work.

Well no, not at least in the models currently being tested/speculated about. It depends on how the BI is arranged. I wrote about the BI experiment going on here in Finland in an earlier story here, quoting the relevant part:

Have a look at this chart, it's one of the proposed models for basic income by the Finnish Green Party. Now, I might not entirely agree with the numbers therein but this gives you an idea of how these systems are imagined. The leftmost column is the basic income, same for all income groups. The column after that is income from work, and the column after that is taxes paid for on the income for work (41 % for those making less than 4200, and 49 % for those making above it). The column after that is net income after taxes, and the column after that is total income (net income + basic income), the rightmost column is the effective tax-rate. Now you can see that for the two lowest classes, even though the nominal taxrate is high (41) the effective tax-rate is indeed negative due to the basic income, and only 4 % on those who make 1500.

Because in most models of BI the income is essentially created as a negative tax-bracket it means that not everyone will get a blank increase of X dollars which would lower wages. For me example under such a model my tax-rate would go down 5 %. meaning my pay could be cut by that amount without it affecting my level of income at all. Cutting any more than that would start to reduce the net income I get.

So if an employer offered 200 for a month of work, this would be enough.

No, it wouldn't. If I was offered 200 instead of my current pay, my net income would drop 63 % under this model. People are not going to go "oh cool, you want me to keep doing what I've always been doing and get less than half the money I used to because they tweaked the taxation system slightly, I'm fine with this."

Besides, doing this would destroy the consumer base entirely. If the net incomes of the vast majority of people drop by over half, domestic consumption would come crashing down, in turn causing major issues for companies,

BIs are at their core tax-reforms which are meant to ensure people can accept part time and short-term jobs more flexibly without having to worry about the problems that causes for their benefits and the hassle of re-applying for them and in the process losing any source of income for the time that their application is reprocessed. The current bI models being discussed in western economies are not such that they could be used for massive pay-cuts. The models assume that pays stay the same, as the BI itself requires heavy taxation of income to be funded. Cut pays across the board and the tax-revenue will collapse, making the system immediately unsustainable.

In the long term, if and when automation proceeds to a stage in which nearly everyone is on BI, then the situation is different and the amount of BI will have to be increased to maintain domestic demand, but in that scenario, since nearly no-one will be generating income tax-revenue, the money for the higher BI will need to come from somewhere, which means corporate taxes and capital gains taxes will have to be tweaked to fund the higher BI.

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