essay:Basic income

I propose the basic income, also known as the guaranteed minimum income or negative income tax, for modern civilised society. This entails that every person would receive a fixed payment from the government, which is enough to maintain oneself without working. I further maintain that this is only practical with a system of true national health care, as, for one, persons with significant medical expenses could not rely on the basic income alone, as is entailed by the concept. The system would replace all other government benefits, except perhaps for disabled people with special needs beyond being unable to work.

I say that we can and should end poverty by this simple expedient of giving the poor money to be no longer poor. As a system of true socialised medicine will end that worry of those on a fixed income, no one need ever be financially desperate again.

- How should it work?

I will refer only to the USA in the rest of this essay, though it applies to every comparable nation. The basic income would be paid out by the federal government to everyone, and would replace all current welfare and redistribution programs (federal, state, and local) with possibly a few minor exceptions. Similarly the universal health care that accompanies it would replace all current provisions for health care; as these combined form about half of all government spending, their obsolescence would free a considerable amount of money.

The benefit could be paid based on individuals or based on households. In my mind, only payment based on individuals would be acceptable. First, there is the rampant fraud likely to arise if done the other way; this already exists with current welfare programs, and would be much worse if applied to the entire population. Second (and related), the costs of managing the program would be much lower for an individual income as the means to count every person exactly once already exist. It may be objected that this provides an incentive for persons to live in fewer households, but this is no different from the situation now: in both cases, one financially benefits from living with other persons as the fixed costs do
not scale with number of persons. Although I do not like that it is an issue of housing availability and not money per se.

Persons in prison or another involuntary institution should be excluded, but should begin to receive it again immediately upon their release.

- The amount of the benefit

It is necessary to propose a monetary amount for the benefit. Though the exact value it would be can not be specified, I propose a present value of $1,500 per month, plus $200 for each dependent child. This benefit would for obvious reasons have to be limited to citizens, or perhaps citizens and legal permanent residents. My benefit of $200 per child seems low. However, I realise that to avoid encouraging high
fertility, the amount must be less than the minimum reasonable cost of raising a child. Also, as it may be assumed that persons relying on the basic income are not working, it is unnecessary to account for regular child care; likewise, as health care will be free I do not need to include that, either.

This child benefit should not be zero either, I think, though that would not be impossible. No increment would result in many families with children in need of help, just as now, which this program is meant to end.

Another issue is that I do not vary the amount with place of residence, while everyone knows that some places have a significantly higher cost of living than others. I answer that the reason such places do have such a high cost of living is the high demand to live there, and that varying the basic income by place of residence will only drive that demand higher, thus further increasing the cost. The only way to partially equalise these differences is to encourage more housing developement in high-cost areas, bringing the price of housing down there.

The amount would of course be automatically indexed to the cost of living.

- Paying for it

Concrete proposals for a basic income usually include a flat income tax (hence the term negative income tax - the benefit can be thought of as a flat tax minus the benefit amount). I concur. With a flat tax, it makes no difference if it is figured by individuals or married couples, so I would do it by individuals to match the benefit. My tax would have no exceptions, and go from 30% up to 70%, with most ordinary people in the 30% bracket and the very rich in the 70%. This would apply only to earned income (wages, salaries, and other compensation for work performed). Investment income would be capped at 30% to avoid disadvantaging investing or punishing people that live on investment income.

Likewise, the corporate income tax, though it can not be made exactly flat, would be made far more so, at 30 or 40%, greatly increasing revenue; this is only restoring it to where it was in the 1950s.

Considering the amount of the benefit named above, the federal government's revenue would have to approximately double to pay it. The taxes above would go a long way toward that, and others could make up the difference. The most important figure is the proportion of total GDP; my benefit would be approximately 38% of current GDP, which is not out of bounds for government revenue.

- The basic law of the basic income

The basic income would surely decrease the amount of work performed. Many people would choose to not work at all, or to work only part-time, rather than a conventional job. Hence we may be certain that the average income would fall. It must be noted that this would not be a large effect, because employers would soon adjust to the new conditions, and much of the work done in our society has zero or negative value. The reasons for the latter are partly those explicated in the next section that would go away with the basic income, and partly issues of patronage, class, etc. that would hopefully diminish.

If the average income falls, while the worst-off become better off, it can only be by decreasing the income of the rich. Indeed this will occur, by means of the taxes I propose, as well as the fact that businesses will have less to spend on salaries. This can't be considered a bad thing.

- Automation

Though the essential argument does not depend on it, many thinkers have proposed that the basic income is essential to implement because of automation. This may be. It is definite, though, that the basic income has the potential of eliminating many inefficiencies that are at root caused by the reduced number of workers needed in our modern economy. In today's society, there are fewer places for useful full-time work than there are people that, in our economic system, need to have a job. The basic income is the only solution that I can see to this dilemma.

Therefore the prevailing conceit that everyone should have a normal job to support themselves is harmful. It is inconsistent in any case as there are already people that violate this ideal: not only wealthy people that don't need to work, but retired people and stay-at-home wives - anyone not working is in fact living off the rest of society. It doesn't matter where the money is coming from: it is important to realise that money is just marks on paper or in a computer, not real wealth.

And another way that everyone, even working people, is free-loading is through living in an advanced society like ours rather than a Third World society. It is impossible to quantify this, but it is real, and everyone shares it in common. In other words, it is our inheritance for all past technological and organisational developement. Paying part of this inheritance in money is not fundamentally different.

I have another argument, as well: that the possibility of automating many jobs will dramatically reduce the impact of the basic income of national production. As the effective cost of unskilled labor rises, the incentive to automate jobs that have not been automated increases. For example, I just observed, when making a doctor's appointment, that that could be entirely automated given what it now entails - of course, in this particular case, a national health-care system would allow it to be done easily.

The basic income also reduces the impact of further automation on the economy, as workers that lose their jobs face no risk of starving and can take ample time to train for a new career if desired. And as I know that most jobs can be largely automated, I would not be surprised if, say, 30-50 years after implementing a basic income less than 20% of adults were working a normal job, calculated as full-time equivalents.

Therefore, it will increase freedom by allowing us to choose, individually, whether to take productivity increases as more leisure or more money.

- Is it a form of communism?

If we consider the goal of communism to provide everyone a decent living, then we can say the basic income has the same goal. But nonetheless, it does not have the deficiencies of Marxist government.

First, it does not give any more power to the government. To the contrary, government will have less power if anything.

Second, it does not try to abolish money. It is true that the world once ran without money, but the trend throughout history has been to put more and more on a money basis. It is today impossible to live even a short time without money in some form. The basic income accepts this.

Third, it has no ideological component beyond the basic idea. I'm sure everyone knows that governments having an ideological basis become tyrannical because of their need to suppress dissent. This includes, of course, all historical communist governments.

- Its effect on men's rights

The essential difference between the opportunities afforded to the sexes at present is that women can normally rely on a man to support them, if need be, and thus need not work, and most men must. Further, it is presently true that women on average, especially women with children, have access to much more support of various governmental programs than do men, and are if anything more likely to get those kinds of support that are nominally equal. This plan would end such differences, by giving both men and women a precisely equal benefit. It is true that women would normally receive the increased benefit for children they bore out of wedlock, but as mentioned the amount would be low enough so as not to advantage having children.

Therefore, the basic income, alone, would be a great step forward for men. But there is more: with an income assured to all, the justification for alimony and child support disappears. It would be reasonable, then, to completely abolish them upon its implementation; but if not, at least to protect the basic income from any awards, as with all other debts.

- Its effect on youth rights

I wrote an essay, which is online here proposing that the age of majority be made 15, and outlining the securing of adult rights to young people 15 to 20 years old. Since the basic income would be paid to all adults, that would necessarily entail that that be given to all those 15 and over (instead of 18 as at present).

Regardless of whether the age is 15, 18, 21, or otherwise, the plan would surely cause more young people choosing to leave home shortly after that age, simply because that would not require employment. It does not seem that having the age 15 is much worse, even if one considers this a bad thing.

Note that although many people in the youth rights movement say that there should be no age of majority, it is plainly ridiculous to not have a threshold age for the basic income, and paying it upon birth would (as discussed above) become a huge reward for having children, which can not be tolerated. If the money were placed in a trust-fund, not to be given out until the child reaches a certain age, we would again have to decide on an age; further, that plan would be needlessly costly, and it runs contrary to the spirit of the guaranteed income (which is intended for current expense) to have it used for saving as that would be.

- Its effect on crime and criminals

I do not know for certain what impact it will have upon crime. However, I surmise that crime will be reduced overall. As no one would feel the need to turn to crime for a living, it would become a less attractive option. This applies especially to men getting out of prison, who now often feel unable to get reasonable work again and therefore want to go back to the criminal world.

Some crimes, of course, are unrelated to money, but I can not believe there would be any substantial rise in their incidence. I am somewhat concerned that the law would create more 'idle hands', but know that reducing the overall level of crime would allow us to focus more on eliminating the criminal subcultures that remain.

- An end to wage-slavery

All of this, however, is surpassed by the most pointed reason for the basic income; namely, to reduce the disparity of power between employer and employee. No longer would the boss be able to rely on employees' willingness to do anything to avoid termination, for no one would have to fear his life reaching a crisis due to job loss. It is true that the rich would nonetheless have a significant reduction in income, but they tend to be treated better by their employers anyway, and also likely have savings sufficient to make temporary loss of work less traumatic (As well, many weathly couples have two incomes; I will not cite that as a primary reasons because I am focusing only on individuals in this paper.)

Ironically, this scourge, created by this existence of money, will be ended through money.

This is an essay created by Andrew Usher. Please do not edit it; but only comment in discussion.

Also see the original Usenet threads in which this was posted: (newer) (older)

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