Tuesday Money rules (3 of 3) - Eligibility

Tuesday Money rules - Eligibility

Eligibility Rules - post 3 of 3

This post focuses on eligibility rules.

The other aspects of Tuesday Money are addressed in other pages

• Tuesday Money - full description (PDF, 7 pages)
• Condensed rules - Main  = first post 1 of 3 in this series
• Reconciliation Rules = second post - 2 of 3

Eligibility Categories

For purposes of this model, each person in the US is either adult (18+) or child (< 18).
All persons lawfully present in the US are entitled to a certain share amount, which
is a fraction of the "full" UBI share accorded to all resident citizen adults.  
In this model, all payments are made by a hypothetical banking entity called CMB,
which offers recipients a choice of either weekly direct bank transfer, or low fee debit/ATM card.
In either case we say the eligible recipient has a CMB account.  Eligible recipients must register 
to create this account, and no retroactive payments will be credited for the payment prior
to registration.  In our model, payments are made weekly, on Tuesday, unless it is a banking holiday in which case payment is made the next banking day.    In our model, we expect the UBI payments
to be entirely equal for all persons within a limited number of  legislated categories.  The categories are determined entirely by age and US residency + citizenship status.    

No Tuesday UBI payments are made to undocumented visitors to the U.S - they are ineligible.  
On a given Tuesday, an eligible adult is either a current lawful resident of the U.S., 
or a lawful visitor to the U.S.  An adult resident may also be a citizen, thus receiving a full UBI share.   
Adult residents may temporarily leave the US, but long absences (>    ?    days) 
trigger cessation or sharp reduction of UBI until the adult returns (not modeled further, here).   
If the visa of a documented visitor expires, UBI automatically expires with it, with limited appeals 
available to resolve mistakes and handle emergencies.  These aspects are not considered further, here.

Adult recipients who are legal guardians of children may receive additional UBI on their behalf.
The amount per child is tapered by household size, as shown below.

Tuesday Money assumes general leniency in rules for children,  while seeking to limit gaming incentives.  Citizenship status of children is not considered relevant to UBI share size, but residence / visitor status is.  Temporary guardian absence from US does not diminish resident child shares.  

Persons in Institutional Custody

Adults and children residing in custody of institutions such as prisons and mental hospitals are subject to special stipend eligibility and distribution rules.   See page ___ of the detailed model desciption. 

Tuesday Money rules (2 of 3) Budget Reconciliation

Tuesday Money rules - Budget Reconciliation

Budget Reconciliation Rules - post 2 of 3 

Here we itemize broad budget policy concepts aimed at simplifying US federal management
of our national economy.  We define a system that operates transparently, using predictable
timelines and published parameters.  These policies are intended to complement the Tuesday
UBI benefit program, producing a total effect that is sustainably beneficial to the public.  

• Tuesday Money - full description (PDF, 7 pages)
• Overall goals are shown in full description, and also recapped here in post 0:
• Principal Goals of Tuesday Money policy model
• Condensed rules (1 of 3)  - Main  -  first post in this series
• Condensed rules (3 of 3) - Eligibility - third post in this series

Reconciliation of Benefits

IV.5) Adjustment for other federal support benefits payments received. 

IV.5.P.1) Our first principle is that persons who in 2020 already receive federal benefits
of most kinds should not see their total federal benefits reduced by any of these
changes.  

IV.5.P.2) Our second principle is that for the next   7   years, any person's transition to receiving UBI (and seeing some other benefits reduced) should be voluntary, at the time of their choosing.  

a) Persons already receiving certain other statutory federal benefits such as SSA retirement benefits may choose to keep those benefits or to switch to the UBI program. Since UBI will pay less than existing SSA retirement benefits for most people, we would not expect a large number of retirees to want to switch, or to be directly affected. 

b) For those over  40  but not yet retired, a new SSA supplementary benefit program option is defined 
for retirement under SSA rules to allow them to keep UBI as well as that SSA supplementary benefit into retirement. This combination will provide slightly more than the regular SSA benefit, which will also remain an option during the transition period.

c) The following benefits programs are not directly modeled in this proposal, and are presumed unchanged, by default: Disability benefits, Veterans benefits, HHS, HUD, TANF. 

i) It is assumed that all these program recipients will sign up for UBI as well as remain registered in their current benefits programs. 

ii) These other benefits could potentially be reduced for those who are also receiving UBI (which is most recipients). This step could be taken as a federal spending reduction measure, as discussed under Section IV below.  We expect that some but not all such means-tested benefits would eventually be discontinued as federal programs.  These topics naturally arouses human and political passions, and
we do not intend to resolve the issues in this model.  We merely describe a general presumed policy direction, in hopes of providing good contextual assumptions for our economic analysis.

d) Health care benefits and expenditures are not addressed in this model

Reconciliation of Offsets

2)  Each of the following actions can serve such an inflation-reducing offset to UBI. 
In our model both these elements may be quantified separately, without any assumption that these amounts should fully cancel each other. 

a) Collection of excise carbon fees, starting at a fee of $  ?   per ton. 

i) Carbon fees increase consumer prices for carbon-intensive goods, but also progressively shrink the carbon-dependent share of the economy, while pulling money into the federal treasury (deflationary). 

ii) Carbon fees per-ton are expected to increase over time, but further details of that policy are not defined in this model. 

iii) The combination of carbon fees with UBI is often referred to as “Carbon Fee and Dividend”. 

b) Monetary policy adjustment by Federal Reserve, through interest rates and reserve requirements. 

i) The Tuesday Money stipends may be partly funded in terms of “Quantitative Easing for People”. 

ii) We expect this investment to lead to growth in both real GDP and productivity. 

iii) Depending on all the choice-parameters in this model, there could be net inflationary (or deflationary) pressure on the national economy. The Federal Reserve is expected to maintain its own policies of tightening and accommodating in order to mitigate such pressure. 

c) Refactoring of Social Security payment structure for workers age  40-60  

i) As described in subsection I.5 above, future SSA retirees will transition to receiving a supplementary payment in addition to UBI. This act lowers the long term cost of the SSA benefit program (which will no longer be funded using the separate payroll tax and trust fund), while increasing the retirees total monthly support. 

d) Reduction in federal spending on social assistance programs. 

i) Eliminate federal unemployment benefits and FUTA taxes. 

    If UBI is set less than Fed unemployment, then need a further plan here.

ii) Reduce or eliminate EITC and other low income tax credits. 

    This relates to UBI but also to the income tax refactoring in e below.

iii) Reduce federal spending on targeted and means-tested social assistance under HHS and HUD programs. 

e) Replace current personal Income Tax and FICA payroll tax systems with a unified, simple, fair, progressive income tax system.

f) Expect that this personal income tax system should not be re-written continuously hereafter.
Ordinary people should not need to think a lot about income tax.  Income tax experts will need to
adjust their career paths.  We prefer to neutralize personal income tax as a policy making tool
(other than through the rate parameters shown below), in favor of federal excise (e.g. Carbon fees)
and state discretion.

i) Below a threshold annual individual income of $  ?   (excluding UBI) there is no income or payroll tax collected.  Employers must still report all payments, but tax witholding and federal payroll tax payments will not be required for employees .  A married household is treated as two adults essentially, unless they choose to be jointly taxed as one entity with all thresholds doubled. 

  (1) This threshold completely eliminates federal tax payments and filing requirements for about 
  80%   of the adult population. 

ii) Above the minimum threshold (excluding UBI), all forms of personal income are taxed at the same marginal rate, including wages, business and rental income, interest, dividends, and capital gains. 
It is expected that most of these taxes are collected automatically.
It is further expected that costs and complexity of tax withholding and payroll taxes is
eliminated at the federal level for employers of workers with incomes below the tax
reporting threshold.  Above the reporting threshold, the administration is greatly simplified.

The marginal tax rate is progressive with income level, as follows: 
  (1) From   $88,000  to    $176,000   is flat-taxed at    15 %  
  (2) From   $176,000  to    $352,000   is flat-taxed at    16.5 %  
  Continue multiplying rate by  1.1   at each doubling of income, up to the maximum rate at level 10
  (10) For    $90,112,000  and up - flat taxed at   35.37%  

Policy regarding personal retirement accounts is unchanged, except that IRA contributions will
no longer be deductible (since the intended beneficiaries now pay no federal tax at all).  

iii) Eliminate FICA taxes and trust fund accounting gimmicks 
   Specifically to remove the regressive cap, the unnecessary distinction among kinds of income,
   and the antiquated need for reporting of separate "employer + employee" amounts.

iv) Eliminate mortgage interest deductions and most other personal tax deductions. 

v) Inheritance and wealth taxes are not addressed in this model. 

vi) Corporate income taxes are not fully addressed in this model, but note the leveling of rates for wages, dividends, business and rental income in ii) above.    We suggest that dividends paid to U.S.
persons are not taxable to the corporation (only to the recipient), but corporate profits retained for
re-investment are taxable at same rate as lowest personal bracket (1) above.   

For a more detailed treatment, please see:

• Tuesday Money - full description (PDF, 7 pages)

The remaining rules are summarized in posts 2 and 3 of this series

• Reconciliation Rules post - 2 of 3
• Eligibility Rules post - 3 of 3

Tuesday Money rules condensed (1 of 3) - Model UBI

Tuesday Money rules - Model UBI

UBI Stipend Rules - post 1 of 3 

In this post (1st of 3) we condense description of main rules and parameters proposed in:

• Tuesday Money - full description (PDF, 7 pages).

Here we address the Tuesday Money stipend itself. 
For purposes of this model, each person in the US is either adult (18+) or child (< 18).
All persons lawfully present in the US are entitled to a certain share amount, which is a fraction of the "full" UBI share accorded to all resident citizen adults.  

We expect the UBI payments to be exactly equal for all persons within a limited number of  legislated categories.  The categories are determined entirely by age and US residency + citizenship status.  For more information see Condensed Rules (3-of-3) on Eligibility.

UBI Share Amounts

 100%  TM citizen adult share - adult citizen resident, while in US. (See "resident absences", page ___).
 70%  TM resident adult share - adult legal resident, noncitizen, while in US.
TM resident child shares - based on #children in household, residing with guardian receiving UBI.
    60%  - 1st child in household,  55%  - 2nd child,  51%  3rd,  48%  4th,  46%  5th,  45%  6th+

Retirement status is not used in this level; see page _____  for relationship to FICA program

 25%   TM visitor adult share - small allocation to documented adult visitors staying more than  91  days in the US.  Allows legal enrollment for small benefit to guest workers, students
and other longer term visitors. 
 12%   TM visitor child share - modest allocation to documented long term child visitors.

Tuesday UBI Payments - Implementation Model 

In this model, all payments are made by a hypothetical banking entity called CMB, which offers recipients a choice of either weekly direct bank transfer, or low fee debit/ATM card.   In either case we say the eligible recipient "has a CMB account".  Eligible recipients must register to create this account, and no retroactive payments will be credited for any stipend periods prior to registration.

Stipend payments are made weekly, on Tuesday, unless it is a banking holiday in which case payment is made the next banking day.    

No Taxation or Garnishing of Tuesday UBI 

a) Tuesday Money UBI stipend payments are generally not taxable by federal, state, or local governments.
b) Stipend payments are reported as a separate line item of income on IRS form 1040, but this income is not subject to any federal taxes.
c) Tuesday Money stipend payments made to a CMB account are not subject to withholding or garnishment by any authority. 

Stipend Budgeting Rules of US CMB 

1) UBI 100% weekly stipend amount is determined by an appointed CMB oversight board, subject to the general rules in this section. 

2) By law, weekly stipend rates may never be decreased.
a) Weekly stipend rates may be held constant by CMB for any number of quarters or years, depending upon overall economic conditions. 

3) By law, CMB is not permitted to make temporary increases in UBI rate.
a) If the U.S. congress and president create laws and appropriations authorizing additional payments to particular US residents, they may use CMB as a vehicle for such payments, but this payment may not be defined as or commingled with Tuesday Money UBI. Preferably, any such payment should be made on a different banking day (not on Tuesday). 

4) Announced quarterly increases in UBI 100% weekly payment rate take effect on the first Tuesday payments in February, May, August, and November.
a) The rate increase (possibly 0) for following quarter is announced on a Wednesday exactly 41 days before the increase becomes effective (i.e. in mid-Dec, Mar, June, Sept). 

5) CMB cooperates with Federal Reserve governors in pursuing targeted rates of money supply growth, real GDP growth and related inflation metrics. 

5.a) Generally sovereign money (i.e. federal only) spending on UBI is modeled as supportive of individuals, economy and society, with real support increasing with stipend size, up to an equilibrium region of economic dynamics. 

5.b) Once stipend levels reach this zone, then UBI should increase only slowly, in real terms, at roughly the same rate as growth in productivity of the total economy

6) While maintaining currently presumed inflation targets at about  2%  annual (~=  0.5%  per quarter), it is estimated that the Tuesday Money weekly UBI rate may (at CMB’s policy discretion) initially grow by up to  1.5%  in a quarter, up to  5%  total in a year, and up to  18%  total over  5  years.
a) In a period where measured inflation is above targets, UBI increases will be smaller, possibly 0%, but never negative.
b) In a period where measured inflation is below targets, UBI increases will be higher, but usually not more than  2%  in a quarter and no more than  5%   annually. 

7) It is proposed that the initial full citizen % UBI rate beginning on Tuesday May 4, 2021 be set at a payment of   $220   per week, based on guesstimated aggregate and household impacts, discussed in sections III and IV of the full proposal.

8) CMB is funded as a legally mandatory spending obligation of the US Federal Treasury, not subject to congressional appropriations process. 

9) UBI spending by CMB is treated as an ordinary budgetary expense of the U.S. federal government, and thus contributes to federal budgetary “deficits” under federal budget accounting rules as of 2019-Q1.

Paying For the UBI 

2)  Each of the following actions can serve such an inflation-reducing offset to UBI. 

4) Overall these revisions to federal spending and revenue are intended to result in a federal government that is both simpler and more effective in serving the people. 

In our model both these elements may be quantified separately, without any assumption that these amounts should fully cancel each other. 

Carbon Fees

a) Collection of excise carbon fees, starting at a fee of $  ?    per ton.
i) Carbon fees increase consumer prices for carbon-intensive goods, but also progressively shrink the carbon-dependent share of the economy, while pulling money into the federal treasury (deflationary).
ii) Carbon fees per-ton are expected to increase over time, but further details of that policy are not defined in this model.
iii) The combination of carbon fees with UBI is often referred to as “Carbon Fee and Dividend”. 

Monetary Policy Adjustment

b) Monetary policy adjustment by Federal Reserve, through interest rates and reserve requirements.
i) The Tuesday Money stipends may be partly funded in terms of “Quantitative Easing for People”.
ii) We expect this investment to lead to growth in both real GDP and productivity.
iii) Depending on all the choice-parameters in this model, there could be net inflationary (or deflationary) pressure on the national economy. The Federal Reserve is expected to maintain its own policies of tightening and accommodating in order to mitigate such pressure. 

See additional offsets in our Reconciliation Rules post (2nd in this series) 

3) In crude terms all these actions in subsection IV.2 may be said to help finance or “pay for” UBI spending, although we recognize the following caveat: 

a) Like UBI itself, each such change in spending, taxation, and monetary policy may have its own impacts on demand, wages, employment. 

Further Reading

For a more detailed treatment, please see:

• Tuesday Money - full description (PDF, 7 pages)

The remaining rules are summarized in posts 2 and 3 of this series

• Reconciliation Rules post - 2 of 3
• Eligibility Rules post - 3 of 3

Overall goals are recapped in post 0:

• Principal Goals of Tuesday Money policy model

Tuesday Money framework - principal design goals

Tuesday Money is a policy model for Universal Basic Income.
The model includes various adjustable parameters, such as the size of the payments.
Choosing those parameters leads us to a candidate Tuesday Money Policy.
We measure success of such a proposed Tuesday Money Policy in terms of these Principal Goals.
(This image also shows the first few rules of the framework).

Excerpt from Tuesday Money analysis doc

Tuesday Money is described in greater detail by our model analysis document.
It contains a statement of policy elements, parameters, and analysis goals.

• Link to Tuesday Money PDF, revised 2019-05-01

For accessibility, below are repeated the same 7 goals stated as selectable text.   

Principal Design Goals

The Tuesday Money policy model is intended to potentially achieve the following goals, under suitable 
choice of parameters.  

• PG1) Broad prosperity, shared national economic success 
• PG2) Personal freedom to move, work, invest and innovate 
• PG3) Reduced carbon emissions from thriving Main St. economy 
• PG4) Stability of expectations for consumers and markets 
• PG5) Simplified federal government and reduced bureaucracy 
• PG6) Empowerment of individual choice and state+local discretion 
• PG7) Policy tuning using adjustable parameters, rather than rule revisions

These goals are also stated on the first page of the model analysis doc.