Yes. I am in favor of an allowance being paid by the government to all citizens. The simplest way to do this would be to impose a flat tax on top of existing income tax, and redistribute the revenue equally to everybody. So that it works out as a negative tax for those making less than average (arithmetic mean) income. People making exactly mean income are unaffected. And the very rich get almost nothing back relative to what they put in.
In the short term, most people would benefit, because most people make less than average. That is, median income is less than mean income, because wealth is concentrated at the top. And net utility would increase, because the marginal utility of each additional dollar is greater for the poor than for the rich.
The long term effects of course are more complicated. But it’s not obvious that this policy would result in less productivity. In the US at least, there’s plenty of room to raise taxes on the rich without approaching historical highs. And for the very poor, having a tax structure like this replace welfare could actually make it easier to transition from complete government dependence to a low-paying job, since there’s no fear of suddenly losing your support.
Arguably if you cut existing welfare and the bureaucracy and infrastructure it requires and giving every adult say 10000 dollars a year, you may not even have to raise taxes. And if you also cut regulation on employment, like the minimal wage or what employers can fire people over (since jobs aren’t required to live a decent life in a low expense city) the economic gains probably increase tax revenue.
The numbers don’t add up. If you change a targeted program into a universal one, you either need large benefit cuts for some people or large tax increases.
The entire safety net / welfare state might be getting close to $10,000 per capita each year, if you define it broadly, but something like half of it goes to the elderly (through Social Security, Medicare, and pieces of other programs like Medicaid). It’s more like $5,000 per person (on average) for those under 65, and $30,000 per person (on average) for those over 65. So a change like yours would require either large benefit cuts for the elderly—eliminating Social Security & Medicare (and other programs they use) and replacing them with a $10,000 check—or (if you keep the spending on the elderly the same) you’d need a large enough tax increase to double per capita spending on the non-elderly from $5,000 to $10,000.
People with disabilities similarly receive a disproportionate amount of welfare spending (through Medicaid, Medicare, SSI, etc.).
Just for accounting purposes, are you liberal, libertarian, something else?
The bonus from an incentive point of view is that poor people on government assistance routinely face the highest marginal tax rates, often over 100%, as they lose benefits as they start to make money.
I’m comfortable with the label “liberal”, but support the basic income guarantee for both liberal and libertarian reasons. I think that relieving people of abject poverty and financial insecurity might make the market freer. But more importantly, it would make people freer to live as they choose, and reduce suffering. Also possibly important: it limits the share of income that the wealthiest people can control.
Yes. I am in favor of an allowance being paid by the government to all citizens. The simplest way to do this would be to impose a flat tax on top of existing income tax, and redistribute the revenue equally to everybody. So that it works out as a negative tax for those making less than average (arithmetic mean) income. People making exactly mean income are unaffected. And the very rich get almost nothing back relative to what they put in.
In the short term, most people would benefit, because most people make less than average. That is, median income is less than mean income, because wealth is concentrated at the top. And net utility would increase, because the marginal utility of each additional dollar is greater for the poor than for the rich.
The long term effects of course are more complicated. But it’s not obvious that this policy would result in less productivity. In the US at least, there’s plenty of room to raise taxes on the rich without approaching historical highs. And for the very poor, having a tax structure like this replace welfare could actually make it easier to transition from complete government dependence to a low-paying job, since there’s no fear of suddenly losing your support.
Arguably if you cut existing welfare and the bureaucracy and infrastructure it requires and giving every adult say 10000 dollars a year, you may not even have to raise taxes. And if you also cut regulation on employment, like the minimal wage or what employers can fire people over (since jobs aren’t required to live a decent life in a low expense city) the economic gains probably increase tax revenue.
The numbers don’t add up. If you change a targeted program into a universal one, you either need large benefit cuts for some people or large tax increases.
The entire safety net / welfare state might be getting close to $10,000 per capita each year, if you define it broadly, but something like half of it goes to the elderly (through Social Security, Medicare, and pieces of other programs like Medicaid). It’s more like $5,000 per person (on average) for those under 65, and $30,000 per person (on average) for those over 65. So a change like yours would require either large benefit cuts for the elderly—eliminating Social Security & Medicare (and other programs they use) and replacing them with a $10,000 check—or (if you keep the spending on the elderly the same) you’d need a large enough tax increase to double per capita spending on the non-elderly from $5,000 to $10,000.
People with disabilities similarly receive a disproportionate amount of welfare spending (through Medicaid, Medicare, SSI, etc.).
Just for accounting purposes, are you liberal, libertarian, something else?
The bonus from an incentive point of view is that poor people on government assistance routinely face the highest marginal tax rates, often over 100%, as they lose benefits as they start to make money.
I’m comfortable with the label “liberal”, but support the basic income guarantee for both liberal and libertarian reasons. I think that relieving people of abject poverty and financial insecurity might make the market freer. But more importantly, it would make people freer to live as they choose, and reduce suffering. Also possibly important: it limits the share of income that the wealthiest people can control.