What the spread of universal basic-income schemes says about Americas safety net

As with all these trials, this is not universal.

Universal means we treat 'basic income' as a fundamental right, like public healthcare (in the countries that have it). This means Gates and Bezos would also get $500 as a tax break or income.

Unless we decouple this money from our own 'fairness' biases then it will never be _universal_.

There's no program akin to what is generally just called welfare in Ontario. (Technically known as "Ontario Works" which gives you an idea of the intent of the program.) The maximum amount is somewhat under 500 USD a month, and includes some things like drug insurance or maybe a transit pass. depending on municipality. Long-term recipients may get placed in various work training or work placement programs of varying quality. It's possible (and encouraged) to earn income while receiving welfare; the welfare is reduced $1 for each $2 earned. A person can be disqualified for not complying with program requirements to find work or engage in training, but it's pretty rare in practice from what I know.

The number of long-term recipients is quite low anyway. ~120,000 single adult recipients, about 40,000 for 1+ year, out of a population of 15 million. Total welfare spending by the province is about $2 billion out of a $160 billion budget. We are not particularly generous with our social programs compared to some comparably wealthy European countries, for example. But when you have absolutely no income, even that pittance seems to matter a lot.

Also isn't this:

> They are paid for by the flood of money made available by the federal government for relief schemes during the worst of the pandemic.

a misuse of funds that were supposed to be returned? (or am I misremembering the "supposed to be returned" part from something else?)

Navigating bureaucracy involves skill and willpower. A lot of schemes rely on people failing at it (public and private).

There is so much wrong with many of America's systems like health care and housing, with UBI a bandaid solution. Fix the systems first, then see if you even need UBI to begin with...

Does this mean that they can't be collecting SNAP or medicaid? or?

Speaking of those other programs (brought up in the article), I with someone could make a phone app that managed the applications and such for people who need them. Some are disabled and need assistance; some are working two jobs to make ands meet, and all of them, by definition, have troubles (transport, kids, jobs) getting to the required meetings. Almost everybody has a phone; many have no other device. Having everything assembled ahead of time, with generated forms that could be printed out at the library, could make life easier for applicants and save time (thus taxpayer money) for the people working in social services.

This would have to be a charity-supported effort, and would need ongoing maintenance.

And of course, making life easier for applicants is against state policy in some jurisdictions.

All things considered, it encouraged bad financial habits. It'll never be practical.

UBIs solve all this.

Summary

A new flat tax on all income, in addition to existing taxes.

Distributions are exactly equal to all people

Tax revenue is set aside for immediate redistribution. It never touches the general budget

Distributions are based exactly on the revenue from the tax. There is no commitment to any particular amount

Details

The tax would be a percentage of income that is the same for everybody. No brackets or exemptions. 10% might be a good place to start.

All Income must be included in the taxable amount, including payments from this program. No exceptions. It particular it would include capital gains, dividends and carried interest. ALL income from ALL sources.

The definition of ‘person’ who is eligible would require a bit of thought. At a minimum, all adult citizens should be included. Whether to include children or various types of non-citizens is debatable. In any case, anyone eligible for distribution must also pay the tax.

Tax is set aside for immediate redistribution (say, monthly). It never touches the general budget. It requires no ongoing authorization. It never gets invested in anything (definitely not government bonds) or held for any substantial length of time.

The calculations on which the payments are made might happen somewhat less frequently than the payments themselves, for example annual calculations but monthly payments. This probably makes things a bit more stable for people in the short-term.

Let’s not create a new administrative agency, let’s just use the Social Security Office. They’ve been doing a fine-enough job distributing cash to millions of Americans and have all the infrastructure in place. And this program is similar to SSI anyway.

Advantages:

The system is self-adjusting. Because there is no guaranteed payment amount and it’s based just on the amount collected from the tax, then as people work less, the payment will be lower and people at the margin will more likely choose to work, pushing the tax revenue back up. As more people work, the tax and corresponding payments go up. There will always be some free riders – but that’s a feature, not a bug. If you have enough money and don’t want to work anymore – then don’t. That’s okay. The important thing is that because this program wouldn’t be means-tested, then there is never a dis-incentive to working more if you want more money. This contrasts with something like unemployment insurance and all other means-tested government programs, which DO penalize you for working more, by reducing or eliminating your benefit.

Not subject to the whims of politicians. Because the revenue from the tax never enters the general budget or is invested in any way, there is no way for politicians to use it for their own ends, or to tie it up in political battles.

It preserves freedom and dignity. An important part of being a free person is the ability to choose for yourself. It’s something that many of us take for granted, but any program that comes with strings attached, vouchers, subsidies or earmarks is a way for politicians and bureaucrats to control what the beneficiaries do and thereby take away their freedoms, dignity and basic humanity. Distributions from this program will be made equally to all, with no strings. People have the dignity and responsibility to choose for themselves.

This is a reminder that the United States has several Welfare Cliffs - places where, if you make $X more than a certain amount, an entire benefit disappears completely; and, was previously a considerable benefit.

For all the people that talk about educational ignorance when it comes to "I make more money, so now I make less because I'm in a new tax bracket", in the US, we actually do have one of those cliffs with regards to Medicaid, etc, at around $40k / year.

And don't get me started on the "disabled people can't actually get a job because they'll lose their disability check" situation.

As a whole, this country's policies really need to update when it comes to facilitating people to get out of traps they find themselves in - because the trap is actually safer than outside the trap - they literally make more money and have a higher standard of living. A poor person making money legally should never be a punishment.