Can we afford a Basic Income?
One of the most frequently asked questions I’m asked goes something like this:
“Ok, in theory I like the idea of a Basic Income, but how are we going to pay for it?”
I’m not a government budget analyst nor do I care to pretend to be one. So I could throw out some numbers and someone else could crunch them too and show why they would or wouldn’t work.
Related Article — America’s New Political Revolution and Why We Need Basic Income to Unite Us
Basic Income could replace current welfare programs
In general money would be saved by eliminating current government welfare programs that are already in place by simply just taking that money and giving it directly to the people instead. Programs like food stamps, public housing subsidies, utility subsidies, direct payments for families in need, etc. could all be eliminated.
People who are under age 65 and currently receiving Social Security Income (SSI) disability payments could be given a choice between SSI and Basic Income but not both.
Huffington Post article by Scott Santens
But rather than try to reinvent the wheel and come up with all of this on my own, I came across a Huffington Post article by Scott Santens that already has all the best choices of funding that could happen. Keep in mind not all the choices would be necessary but you can add them up to figure out different combinations that would work. By the way Scott Santens is the person that inspired me to start writing about Basic Income. So here is the extract from the Huffington Post article by Scott Santens:
“Basic income is entirely affordable given all the current and hugely wasteful means-tested programs full of unnecessary bureaucracy that can be consolidated into it. And the cost also depends greatly on the chosen plan. A plan of $12,000 per U.S. citizen over 18, and $4,000 per citizen under 18 amounts to a revenue need of $2.98 trillion, which after all the programs that can be eliminated are rolled into it, requires an additional need of $1.5 trillion or so. So where do we come up with an additional $1.5 trillion?
• A land value tax has been estimated to be a source of revenue of about $1.7 trillion.
• A flat tax of around 40% would be sufficient. Due to the way such a tax works in combination with UBI, this would effectively be a reduction in taxes for about 80%of the population.
• A 10% value added tax (VAT) has been estimated to be a source of revenue of about $750 billion. That could be increased to reach $1.5 trillion or added to other sources of additional revenue.
• These other sources of revenue could be a carbon tax ($440 billion), a financial transaction tax ($350 billion), or taxing capital gains like ordinary income and creating new upper tax brackets ($160 billion). Did you know that for fifty years — between 1932 and 1982 — the top income tax rate averaged 82%? Our current highest rate is 39%.
• From 2008 to 2014, we created about $5 trillion out of thin air, and handed it to banks in hopes they would lend it to people. It was called quantitative easing. The result was rich people got even richer. Why not skip the banks, and just hand debt-free money directly and equally to all citizens? Potentially, a quarter of basic income could require no taxes at all.
• There is a place in the world that already pays a regular dividend to everyone living there, universally to child and adult, through a wealth fund it has created through royalty fees paid by companies for the rights to profit from its natural resources. This place is Alaska, and the “Alaska Model” could be applied anywhere as a means of granting a basic income as the social dividend from a sovereign wealth fund of resource-based revenue.
• We could even get more creative by thinking about how we go about giving away other forms of shared resources royalty-free to corporations, like the use of our public airwaves, and patents/copyrights that should have entered the public domain long ago but haven’t thanks to corporate lobbying from those like Disney to protect their profits off of creations like Mickey Mouse. Did you know the Happy Birthday song isn’t even in the public domain? Companies should pay us instead of politicians to keep things out of the public domain, and we could use this revenue as an additional means of growing a resource-based wealth fund.
Suffice to say, there exist plenty of funding options, any of which are more than sufficient, that if combined could potentially allow for a larger basic income, or a reduction or even elimination of income taxes entirely. And because we’re already spending so much money on the costs of not having a basic income, we could actually even save more money than it costs.”
Conclusion
As you can see Scott did a great deal of research and provided many different funding options. Keep in mind also in a study back in the 1970s in Dauphin, Manitoba, Canada that provided basic into to the entire town showed positive results that healthcare use ended up 8.5% less due to less hospital visits, less worksite accidents, and less mental health issues. They tied a link to income and the health of people. So there is a likely chance we may save money in others areas too such as healthcare.
To me the choice is clear to move to a Basic Income that would eliminate poverty in the US. Yes, there is a cost to do this. But there is also a huge cost not to do this. There is also a huge benefit in social capital that we would gain by implementing a Basic Income. Please join us in ushering in a Basic Income Revolution.
