Universal Basic Income — The Foundation of a Technically Advanced Society
Nicole Sallak Anderson
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As a supporter of UBI and as an unapologetic conservative, this article was long on redistributionist polemics and short on specifics. That’s fine, save for the fact that as written, it can’t work. Details matter.

IMO, $30K is too much. Critics of a UBI overstate their case when arguing that it would disincentivize too many people, but at $30K, too many people would simply cease to be productive. The result would be too many sitting on the wagon and too few pulling it. Taxes would be raised to compensate, productivity would drop as rent-seeking (corruption) spiked, and the system would break down.

One solution suggested by one of my critics (when I pitch a UBI to my side of the aisle) is that any UBI must be tied to a job (any job). This would be quite easy if we junked the idiotic minimum wage, thus creating millions of jobs overnight.

[Side note: The left’s reaction to suggestion of junking the minimum wage will illustrate how difficult it will be to enact a UBI that isn’t insane and unworkable. It is in the same bucket as the right’s reaction to “putting everyone on welfare.” Knee jerk ideological reactionism will kill any idea bold enough to make a difference.]

If we tied a UBI to some level of work (up to a certain age), we already have a bureaucracy (and yes, we will still need a bureaucracy to run the program) ready to start, and it is the Earned Income Tax Credit system. This is already in place. Some merging of the generally workable Soc. Sec. system and the EITC system would be optimal.

Other thoughts, in no particular order…

  1. Dreamy progressivism of zeroing out defense is all fine and good until the situation arises where a military is needed. Yes, we can reduce military spending, but not bellow a level necessary for the US to remain a superior force. (Que the John Lennon arguments from some, but “Imagine” describes Hell, not Heaven.)
  2. $15K is a better figure, indexed for inflation. If they want to increase it to $30K people can get married. Marriage is the most successful anti-poverty program in the universe, and it doesn’t cost taxpayers a dime.
  3. A UBI should be integrated with a withholding system that takes out money for health insurance (with less mandates and more autonomy), health savings accounts, and retirement savings. Allow citizens to choose from a basket of policies, plans, and accounts, and directing not less than $4K and not more than $6K from their UBI check before it gets deposited. If you are going to put everyone on welfare, forced insurance and savings (again) must be part of the deal.
  4. Clearly, one must be a citizen before receiving any UBI. I am pro-immigration, but the idea that we become a borderless state enforcing no immigration, and then showering non-citizens with cash, won’t ever fly, politically, economically, or, frankly, morally. Immigration policy should therefore reflect the benefit of becoming a citizen. If a non-citizen wants to come here to work, that’s fine with me.
  5. As you stated, ALL OTHER WELFARE MUST CEASE. Existing US programs constitute the worst Kludge of failed policies ever. Even absent a UBI, the best thing America could do right now, is to junk all but 2 of the existing programs and put all money into Medicaid and the EITC.

Taxes

Changing America’s horrible tax system is one of the reasons I became an advocate of a UBI. You have to give something to the citizens before they will support a better system, and a UBI happens to be a good idea that allows for that goal.

The taxation of income, gains, corporate income, and other taxes on production are bad ideas. We should tax consumption and transactions, and nearly nothing else.

If we are to keep an income tax, it should be something low, like 5%, and only on those earning more than $500K or more.

I did a back of the napkin calculation a few months ago, and found that you could come close to $4 Trillion (yes, trillion)/ year with three basic, low, flat taxes.

  1. A 1 cent tax on 1000 BTUs (using 2011 numbers) (2016 will clearly be higher), and leaving out some obvious complexity as to how we collect from various sources, a 1 cent tax on 1000 BTUs raises nearly $1 trillion. (this excludes renewables, which should be all the subsidy they need)
  2. A 5% Gross Receipts tax on ONLY 60% of business entity revenue yields nearly as much as America’s stupidly high corporate income tax (which subsidizes sky boxes for the rich, as well as the 3 martini lunch). The 60% figure is derived from what some call a “modified GRT,” that allows companies to pat the GRT on either; 1) revenue — Cost of goods sold, 2) revenue — labor cost 3) revenue — (40% of Revenue), which ever is the lowest tax. This is a more fair, less costly, way to extract revenue from business.
  3. A 2% tax on stock transactions (excluding bonds, BTW) yields nearly half a trillion dollars per year. The highest capital gains tax revenue has been a paltry amount just over $110 Bn. A transaction tax is a much better idea. We should cut capital gains to zero, and put in a 1 or 2% tax on each transaction. You pay once when buying, and again when selling.

This comes to nearly $4 trillion. Without a single tax on income. This is how you get buy-in from the right-of-center voter, and it would unleash capitalism to a degree never before seen.

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