Space Forum / Astronomy / July 2008

I propose the basic income, also known as the guaranteed minimum
income
or negative income tax, for modern civilised society. This entails
that
every person would receive a fixed payment from the government, which
is
enough to maintain oneself without working. I further maintain that
this
is only practical with a system of true national health care, as, for
one, persons with significant medical expenses could not rely on the
basic income otherwise.

How should it work?

I will refer only to the USA in the rest of this essay, though it
applies
to every comparable nation. The basic income would be paid out by the
federal government to everyone, and would replace all current welfare
and
redistribution programs (federal, state, and local) with possibly a
few
minor exceptions. Similarly the universal health care that accompanies
it
would replace all current provisions for health care; as these
combined
form about half of all government spending, their obsolescence would
free
a considerable amount of money.

The benefit could be paid based on individuals or based on households.
In
my mind, only payment based on individuals would be acceptable.
First,
there is the rampant fraud likely to arise if done the other way;
this
already exists with current welfare programs, and would be much worse
if
applied to the entire population. Second (and related), the costs of
managing the program would be much lower for an individual income as
the
means to count every person exactly once already exist. It may be
objected that this provides an incentive for persons to live in fewer
households, but this is no different from the situation now: in both
cases, one financially benefits from living with other persons as the
fixed costs do not scale with number of persons. Although I do not
like
that it is an issue of housing availability and not money per se.

Persons in prison or another involuntary institution should be
excluded,
but should begin to receive it again immediately upon their release.

The amount of the benefit

It is necessary to propose a monetary amount for the benefit. I say
$1,500 per month, plus $200 for each dependent child. This benefit
would
for obvious reasons have to be limited to citizens, or perhaps
citizens
and legal permanent residents.

My benefit of $200 per child seems low. However, I realise that to
avoid
encouraging high fertility, the amount must be less than the minimum
reasonable cost of raising a child. Also, as it may be assumed that
persons relying on the basic income are not working, it is unnecessary
to
account for regular child care; likewise, as health care will be free
I
do not need to include that, either.

Another issue is that I do not vary the amount with place of
residence,
while everyone knows that some places have a significantly higher cost
of
living than others. I answer that the reason such places do have such
a
high cost of living is the high demand to live there, and that
varying
the basic income by place of residence will only drive that demand
higher, thus further increasing the cost. The only way to partially
equalise these differences is to encourage more housing developement
in
high-cost areas, bringing the price of housing down there.

The amount would of course be automatically indexed to the cost of
living.

Paying for it

Concrete proposals for a basic income usually include a flat income
tax
(hence the term negative income tax - the benefit can be thought of as
a
flat tax minus the benefit amount). I concur. With a flat tax, it
makes
no difference if it is figured by individuals or married couples, so
I
will do it by individuals to match the benefit. My tax would have no
exceptions, and go from 30% up to 70%, with most ordinary people in
the
30% bracket and the very rich in the 70%. This would apply only to
earned
income (wages, salaries, and other compensation for work performed).
Investment income would be capped at 30% to avoid disadvantaging
investing, and punishing people for living on investment income.

Likewise, the corporate income tax, though it can not be made exactly
flat, would be made far more so, at 30 or 40%, greatly increasing
revenue; this is only restoring it to where it was in the 1950s.

Considering the amount of the benefit named above, the federal
government's revenue would have to approximately double to pay it.
The
taxes above would go a long way toward that, and others could make up
the
difference. The most important figure is the proportion of total GDP;
my
benefit would be approximately 38% of current GDP, which is not out
of
bounds for goverment revenue.

The basic law of the basic income

The basic income would surely decrease the amount of work performed.
Many
people would choose to not work at all, or to work only part-time,
rather
than a conventional job. Hence we may be certain that the average
income
would fall. This should not be a large effect, as soon employers
would
adjust to the new conditions, but it will exist. If the average
income
falls, while the worst-off become better off, it can only be by
decreasing the income of the rich. Indeed this will occur, by means
of
the taxes I propose, as well as the fact that businesses will have
less
to spend on salaries.

Automation

Though the essential argument does not depend on it, many thinkers
have
proposed that the basic income is essential to implement because of
automation. This may be.

I have a different argument, though: that the possibility of
automating
many jobs will dramatically reduce the impact of the basic income of
national production. As the effective cost of unskilled labor rises,
the
incentive to automate jobs that have not been automated increases.
For
example, I just observed, when making a doctor's appointment, that
that
could be entirely automated given what it now entails - of course, in
this particular case, a national health-care system would allow it to
be
done easily.

The basic income also reduces the impact of further automation on the
economy, as workers that lose their jobs face no risk of starving and
can
take ample time to train for a new career if desired. And as I know
that
most jobs can be largely automated, I would not be surprised if, say,
30-50 years after implementing a basic income less than 20% of adults
were working a normal job, calculated as full-time equivalents.

Therefore, this plan allows us to choose, individually, whether to
take
productivity increases as more leisure or more money. This is another
way
in which the basic income increases freedom.

Is it a form of communism?

If we consider the goal of communism to provide everyone a decent
living,
then we can say the basic income has the same goal. But nonetheless,
it
does not have the deficiencies of Marxist government.

First, it does not give any more power to the government. To the
contrary, government will have less power if anything.

Second, it does not try to abolish money. It is true that the world
once
ran without money, but the trend throughout history has been to put
more
and more on a money basis. It is today impossible to live even a
short
time without money in some form. The basic income accepts this.

Third, it has no ideological component beyond the basic idea. I'm
sure
everyone knows that governments having an ideological basis become
tyrannical because of their need to suppress dissent. This includes,
of
course, all historical communist governments.

Its effect on crime and criminals

I do not know for certain what impact it will have upon crime.
However, I
surmise that crime will be reduced overall. As no one would feel the
need
to turn to crime for a living, it would become a less attractive
option.
This applies especially to men getting out of prison, who now often
feel
unable to get reasonable work again and therefore want to go back to
the
criminal world.

Some crimes, of course, are unrelated to money, but I can not believe
there would be any substantial rise in their incidence. I am somewhat
concerned that the law would create more 'idle hands', but know that
reducing the overall level of crime would allow us to focus more on
eliminating the criminal subcultures that remain.

An end to wage-slavery

But all this is surpassed, of course, by the most pointed reason for
the
basic income; namely, to reduce the disparity of power between
employer
and employee. No longer would the boss be able to rely on employees'
willingness to do anything to avoid termination, for no one would have
to
fear his life reaching a crisis due to job loss. It is true that the
rich
would nonetheless have a significant reduction in income, but they
tend
to be treated better by their employers anyway, and also likely have
savings sufficient to make temporary loss of work less traumatic (As
well, many weathly couples have two incomes; I will not cite that as
a
primary reasons because I am focusing only on individuals in this
paper.)

Ironically, this scourge, created by this existence of money, will be
ended by money.

Andrew Usher