Universal Basic Income will Accelerate Innovation by Reducing Our Fear of Failure
Scott Santens

Scott, there is one big problem with UBI: it won’t work. A little-known but extremely powerful law of economics prevents it from ever working: the Henry George Theorem, which states, in effect, that the entire benefit of all desirable publicly and charitably provided services and infrastructure, including transfers like UBI, that are not wasted through incompetence or stolen through corruption, is taken by landowners in the form of higher land rents. You can see this happening everywhere in society, if you just open your eyes to it. Better “free” public education? Nope, you’ll just have to pay higher rents to landowners for access to it. Free Medicare and Medicaid? Nope. You have to pay landowners full market value for access to the hospitals, clinics, etc. That’s one reason land values are often astronomical within about a half-hour’s drive of the nearest hospital, but fall off a cliff when you get farther out than that. Welfare, or UBI? Nope. You’ll just have to pay landowners full market value for access to the stores and services where you can spend that money.

Anything you try to give people, including UBI, landowners will just take from them in higher rents. The ONLY POSSIBLE SOLUTION to this problem is to require landowners to repay in taxes what they are taking from the community in land rent — think of it as repayment of the subsidy to location owners. It has been known for over 200 years that this way of funding public expenditures — often called land value taxation or LVT — is the fairest and most economically efficient possible tax, because it simply recovers the publicly created value that is otherwise given away to the landowner in return for nothing. And best of all, it naturally lends itself to a far better method of ensuring everyone has the security of a place to sleep and access to economic opportunity: a universal individual exemption, for both tenants and landholders, similar to the universal individual income tax exemption that applies to both income recipients and their dependents.