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Income for Everyone

by Miriam Axel-Lute on August 12, 2014 · 0 comments

 

If you wanted to come up with a totally cockamamie idea to attribute to someone to smear them as unrealistic bleeding-heart socialist, what would you come up with? Possibly “the government should just give everyone a salary (even if a minimal one) just for breathing”? That ought to do it, right? I mean who in their right minds . . . ?

Turns out, however, quite a few people. I was fascinated to learn that this is one of those issues on which principled left- and right-leaning thinkers and economists actually tend to agree, though predictably, for slightly different reasons and with different flavors. It even got so far in Switzerland as to come up for a national referendum.

As Dylan Matthews recently pointed out, writing for Vox, Richard Nixon, for the love of God, “during his first year as president, proposed something similar: a negative income tax that would pay around $10,000 in 2014 dollars to a family of four, and then tax it away at a 50 percent rate until families earning above $20,000 or so stopped getting anything at all.” This would basically lift everyone above our extremely miserly poverty line. (The Swiss proposal was quite a bit more generous, more in the $30,000/year range.)

Libertarians tend to see it as a way to get rid of all other social services, drastically shrinking the federal bureaucracy and returning agency to the hands of the people who could decide what to do with the funds themselves. Left-leaning supporters don’t really mind either of those outcomes, but are more concerned with its effects on income inequality and the ability to walk away from crappy working conditions without being afraid of starving. They also would retain a bit more of a federal infrastructure—health care, in particular, they would say (and I agree) cannot be handled by the market even if everyone had a basic income. We’ve amply seen that the private sector is a disaster for health coverage even for those of us making quite a bit more than any proposed basic stipend.

It also depends what income floor you are proposing—at $20,000 a year for a family of four, plenty of people still need, and are still getting, some assistance.

But of course, the American political thought universe is not dominated by people making principled philosophical stances along the libertarian/mutual aid spectrum, but rather by a lot of murky ideology that has a lot more to do with unexamined beliefs about human nature, just desserts, and a totally faulty picture of how economics works than it does about practical outcomes that might solve really big problems.

And so the most predictable response to the basic income/negative income tax idea is not discussions of how to fine tune it so it would work to meet everyone’s goals, but abject horror at the thought that it might cause some people to choose not to work, or not to work so hard. (Never mind the endless studies saying Americans work too hard.)

Matthews does a really wonderful job countering this argument. The few small studies that have been done, he reports, showed a tenative very small reduction in hours worked. And that could very well be a good thing—people could be going back to school. They could be caring for a baby, an ill or disabled child or elder, generating incredible societal value and likely saving the public coffers on a different line. They could be taking some time off to improve their own health (also a net savings for society) or to accomplish a project that has social benefit but isn’t likely to be paid for—art, invention, activism, new business formation.

The other great thing? Matthews quotes some studies about how much a program like that would cost, without reducing existing assistance programs: About 1.5 percent of GNP. “Going from the federal government being 21.1 percent of GDP to 22.6 percent or thereabouts is hardly a sea change,” he notes. “And yet that’s, roughly, all it would take to eliminate poverty in America.”

So who would be threatened? The people making their profits off of people currently making poverty wages, that’s who. People would still work. They’d work their tails off in one way or another to provide for their families, realize their potential, make a contribution. But they wouldn’t take a meaningless job that paid crap, didn’t offer regular hours, and disrespected their labor with horrible working conditions. They wouldn’t have to. Now that would be radical.

mjoy.org

 

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