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I don't understand your problem with a basic income guarantee. You say that it is unhelpful, but it is a very clear description of the mechanics of redistributi
by ppereira 13y ago
I don't understand your problem with a basic income guarantee. You say that it is unhelpful, but it is a very clear description of the mechanics of redistribution. It is much easier to explain a "basic income" to my mother than a "negative income tax" -- and yes she understands that anything provided by the government must be paid for by taxation.
The unconditional aspect of a basic income allows individuals to accumulate capital. Many welfare systems require recipients to sell their cars, property, and maintain bank accounts at a near zero balance. They also clawback employment earnings at punitive tax rates of 50-100% (often higher than the top-marginal rate). Since welfare is often very low, those supplementing their income are often driven to working under-the-table for cash. This creates a welfare trap that keeps poor people poor.
Means checking requires an expensive bureaucracy, is paternalistic, and I think unnecessary.
If you read the research results for the Canadian and US experiments you will find that people want to work, even with a basic income. The slight negative incentives that were discovered can be attributable to two basic factors:
1. some women chose to stay home to care for children or elderly family members -- this has an obvious societal benefit, and
2. if the experiment is conducted in a non-saturation site (i.e. one fraction of the population gets a basic income while the other does not) then there will be an economic distortion affecting low income workers. Employers are driven to employ those without a basic income, who are more desperate for work. The same would happen if you tried to enforce a minimum wage on half the population. Employers would hire those without a minimum wage.
If you are looking for the real problems with the basic income, it is easy to find. The cost to raise everyone above the poverty line is _very_ high. One would have to consider the size of the family unit receiving funds and adjust for economies of scale. Nevertheless, it could be done. By contrast, a basic income at the rate of many existing welfare systems would be very affordable and would result in many collateral savings such as reduced health care and administration costs.
Also, despite the cost of a basic income, it has the support of many Nobel-prize winning economists because it increases utility. I have not yet seen a model for optimal income taxation that does not point to a negative tax / basic income. See, for example, textbooks on public economics or the classic paper by Mirrlees,
http://www.econ.yale.edu/~dirkb/teach/pdf/mirrlees/1971%20optimal%20taxation.pdf http://www.econ.yale.edu/~dirkb/teach/pdf/mirrlees/1971%20op...
- mc-lovin 13y agoWhile you make some interesting arguments for a basic income guarantee, I think your post would be better as a top level comment. You don't seem to have addressed anything I wrote past the first two paragraphs (which were a kind of introduction). E.g. I explained precisely what I meant by the concept being "unhelpful".