Is the momentum continuing behind this idea? Walter Einenkel @ The Daily Kos reports that New Zealand may be moving towards UBI:
New Zealand’s Labour Party is considering the concept of a basic “citizen’s wage.” Andrew Little, leader of the Labour Party, confirmed this as the result of the potential for higher unemployment in in the coming months and years. “Citizen’s income” is also known as Universal Basic Income (UBI). The idea is that everyone gets a basic amount of money to live off of, like a wage, and benefit systems are gotten rid of.
In October 2015 Keith Rankin contributed this observation from the inside of the movement:
With a UBI, taxes are simple, high by neoliberal standards, and everybody (subject only to age and residency criteria) claims an equal share of that public revenue as a basic income. While a UBI should never be understood as the only form of publicly-sourced cash income (some ‘needs-based’ transfers will always be necessary) – and is a dividend rather than a ‘hand-out’ – for a substantial majority of the resident adult population, it would be their only publicly-sourced income.
A UBI on its own is not a cure for poverty. Rather, it’s a public-property-rights-based payment that incidentally serves as a hand-up rather than as a handout. Of particular importance is the additional bargaining power it gives to the relatively poor. It tides-over people during spells without income – like ‘strike pay’ once did – enabling them to hold out for fair private-sector wages; and it reduces pressure on self-employed people who might otherwise under-tender to get work. Of equal importance is the way it addresses the low-income poverty trap that accompanies all forms of targeted redistribution. The GMI accentuates the low-income trap. The UBI eliminates it.
I have some difficulty buying the use of the term ‘dividend’ in this context, as dividends usually refer to the profits spun off from a business back to the shareholders, although occasionally a dividend is funded buying borrowing money against the prediction of future profits – which sounds like a little nutty to me. Back to the point, mixing private sector terminology, even as merely analogies, worries me as it tends to let private sector practices to leak, perhaps inappropriately, into the public (government) sector. See here for that discussion. Keith concludes with the obligatory claim of Paradise.
On its own a universal tax-benefit regime cannot end poverty. Rather it creates a power-balance; and a dynamic that confers dignity and puts an end to poverty traps. It enables people to say ‘no’ to exploitation, and ‘yes’ to private initiatives that contribute to social and economic wellbeing; to initiatives that, among other things, raise productivity and thereby raise the future level of universal basic income payable.
Sounds good to me. Keith has an additional, more recent piece in the Evening Report here. Geoff Simmons at Gareth’s World has a list of the ten categories of people in New Zealand who would benefit from this scheme. The big winners are #5 on his list:
The working poor would be the biggest winners under an unconditional basic income. They wouldn’t lose their unconditional income as they work more, so the working poor would be better off than they are now, and definitely better off than people who chose not to work.
For low-wage earning couples currently receiving Working for Families, most would still receive more money if both adults received an unconditional basic income. More importantly, they wouldn’t lose this income as they earned more, so they have a stronger incentive to work harder and smarter than they do now.
The rich? Not so much.
A behavior which I’ve read about and observed via news reports, but have never personally observed, is fanatical efforts to avoid taxes. I’m not referring to tax evasion, which by definition is illegal, but efforts that may border on illegality, and are sometimes in quite bad taste. The efforts imply a certain crass materialism on the part of the tax(not)payer, a desire not to contribute to the communal good, although the actor would not agree. If of a libertarian bent, the counter-claim would involve the considerable amount already contributed to society through the implied productivity which generated the income in the first place, or, if of an older generation, the endemic corruption of government, and associated waste of funds; another popular claim is the alleged immorality of the government. An example might be the notorious, late Marc Rich, who escaped the United States just prior to the filing of charges (by Rudy Giuliani), and never returned, despite an ill-advised Presidential pardon from Bill Clinton.
So how would this behavior change if UBI were implemented in the United States? Assuming a more or less standard definition, the government stipend would be tax free. A flat tax of 33% might be enough to fund government operations, assuming all welfare was abolished and military spending was finally brought under control. One has to wonder if Social Security would disappear as well.
So my point would be that there would be some obsessive (but trivial) calculations of when one transits from benefiting (paying less tax) from the government stipend to paying for the lazy bums (as the unfortunate would no doubt be characterized) would be performed, and no doubt many folks, indifferent to the many benefits government brings, would gnash their teeth as they inadvertently helped the less fortunate begin to escape the traps they are so often within. Such is our fascination, even idolatry, this country has to do with personal wealth.
I look forward to hearing how New Zealand does with this new notion. The law unintended consequences is always fun, but, to grab one more item from Mr. Simmons’ list of benefiting people …
In fact, some young entrepreneurs believe an unconditional basic income would be one of the most business friendly policies around. It would provide some secure income as entrepreneurs during the all-important start up phase.
If you want to sell UBI in the United States, a form of that paragraph is the place to start. Right next to money in the idolatry list is the phrase free enterprise.
