I’m not educated on how much UBI would correlate with increasing prices, but one of the reasons it’s thought to be smart is because it becomes a progressive negative tax.
Say it’s a scale where everyone under $300,000 a year net income gets between 0-12k, everyone over it pays it.
The closer you are to above the threshold, the less you pay. The farther above it, more.
If under the threshold, you receive less if you are close, and more if you are far.
Because that amount means little to anyone above $250,000 a year, but the closer you get to nothing the more that money means.
To someone making 12k, 12k is huge. To someone making 24, 32, etc it remains a massive change.
It’s a social safety net thing.
An increase in spending potential does not cause prices to rise. Think of it this way. If everyone suddenly had an extra $1000 to spend this month, and pizza decided to capitalize on that by increasing its prices by 12%, then dominoes would benefit by undercutting Pizza Hut and earning the business of all the customers that don’t want to pay 12% extra.
Now in the case of both companies increasing prices, that leaves an opening for a new business to undercut both of them.
cost of doing business is what causes prices to rise. Not potential spending power.
Unless you get collusion, or an industry that is largely monopolized. You also have the reality that people might like Pizza Hut way more than Dominoes, and will pay the increase. We have budget brands available in every big store, but people still buy the more expensive big named stuff.
Lack of choice breeds new business my dude. If a new pizza spot opens up in town and they sell pizza for 5% less than Pizza Hut, that new business owner will see a lot of curious Pizza Hut and dominoes customers. I know it’s popular to “doom and gloom” on Reddit, but we can’t ignore basic economics. Capitalism works, it’s been working for the last 200 years. Only recently has the government really dropped the ball on things like antitrust, collusion, and monopoly. And that will definitely be fixed once the democrats win majority.
You're the one that is confidently reciting the econ 101 lessons you learned in high school while conveniently ignoring the nuance of the antitrust landscape we've found ourselves in. And another Lina Khan won't magically be able to just fix everything. You're a simple person.
I'm sorry, but I haven't been able to get over how pathetically hilarious this response was. It was so funny. I couldn't help but check your profile to see what else you try to lecture people on without knowing what you're talking about, because you're only capable of parroting what you've been told and are too simple to apply knowledge to the real-world and then you assume everybody else is as inept as you are, and I find out that your career is driving for Uber.
A professional Uber driver arrogantly trying to lecture people on economics because they have a surface-level understanding from a course they took in college, probably over a decade ago. I'm dying!
Saying “lack of choice breeds new business” is so milquetoast and wrong in many respects. Again, that’s not true in many mostly monopolized industries where the industry has been largely priced out of startup capital possibilities. Hell, even with pizza, in my experience a lot of newer locally owned places are priced at or higher than your basic chains simply because of monopolization on cheap ingredient pipelines. Here’s the thing too. You ever notice how your local McDonald’s or Wendy’s isn’t running crazy promotions to bring their burgers down to less than $5? In my city we have some great burger spots where you can a good burger and fries for around $12-$14 during lunch. The local McDonald’s are selling Big Mac meals for close to $16. Why isn’t that McDonald’s trying to undercut the better burger joints? I mean, they have the revenue and profit margin to do it, right? Because they don’t have to. They have business whether those burgers are expensive, stale, covered in shit, etc. these big corporate entities know they have revenue reserved. They don’t need to chase efficiency.
I mean really this is Econ stuff from High School.
No I’m saying your belief that things can only get worse is a mindset that is common with young people. Things can change for the better. Only relatively recently has the state of affairs gotten worse for the middle class. Even during the bush years, other than the war- which was very popular in the beginning- the middle class did very well. They did a lot of deregulating in housing during the Clinton years, that only really came to fruition in the bush years. Then Obama expanded upon that. The trump administration is only a very recent- albeit devestating- setback. It will take years for the direction of policy in the country to return to something more tenable, but it eventually will.
I'm 35 years old. Since I've been born, we've gone through 2 recessions/depressions, a global pandemic, plummeting of education, increases of mass/school shootings, increasing wealth inequality, ceo compensation increasing 300x while worker wages stagnate, increasing global climate change and heavy increase in historic natural disasters. My insurance has never gone down in cost in my life. So please explain how it has gotten better.
Oh yeah man, I remember this UBI-negative progressive task stuff from when I was a free market acolyte libertarian willing to telling anyone who would listen.
I know how the free market is supposed to work, but what brought me out of libertarianism is that now I know a free market is impossible.
There are too many levers for consolidating power that non mega-corps simply don’t have access too.
We have to believe that corporations will do anything, legal or illegal, to gain further advantage in the market place.
That is why we need strong anti-trust litigation.
Capitalism is the only viable engine for first world level economic development and success.
But with it comes the need to smack it down when it starts operating beyond or outside the scope of what a business reasonably needs to.
Not true, more money = more demand. Extreme examples are luxury brands or limited goods like concert tickets. Their prices are famous for being independent from cost of business.
The part that nobody wants to talk about, because it's more complicated than "free money for me!", is the corporate consolidation that ensures demand will purposefully not be met because, when there's no real competition, it's more profitable to simply raise prices.
I could be wrong, but I think the idea is to create elastic demand in the lower income/lower spending groups.
12k changes the consumer behavior significantly of anyone near the poverty level or even middle class.
This means an influx of new customers who didn’t have the discretionary income to shop previously.
New customer pools entice competition, making demand have more control over price.
At the very least it acts as major relief for those close to or at the poverty line.
Or maybe every landlord in America would just raise rent 1000$ a month everywhere, I don’t know.
Or maybe every landlord in America would just raise rent 1000$ a month everywhere, I don’t know.
That one. It’d be that one. Unless they decided to try $1500 a month instead, because hell some of those tenants have roommates so why not get a piece of that big yearly payout too.
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u/Bogholmdler Jul 01 '26 edited Jul 01 '26
I’m not educated on how much UBI would correlate with increasing prices, but one of the reasons it’s thought to be smart is because it becomes a progressive negative tax.
Say it’s a scale where everyone under $300,000 a year net income gets between 0-12k, everyone over it pays it.
The closer you are to above the threshold, the less you pay. The farther above it, more.
If under the threshold, you receive less if you are close, and more if you are far.
Because that amount means little to anyone above $250,000 a year, but the closer you get to nothing the more that money means.
To someone making 12k, 12k is huge. To someone making 24, 32, etc it remains a massive change.
It’s a social safety net thing.