Guarantee all Americans an income

The author of the following article makes some interesting points:

Against the Negative Income Tax

There were four large NIT experiments conducted in the U.S. between 1968 and 1980. These tested a wide variety of program variants among the urban and rural poor, in better and worse macroeconomic periods, and in geographies from New Jersey to Seattle. There was, and is, a lot of scholarly debate about many of the experimental results, and their potential application to policymaking. But there are two consistent findings across this body of experiments.
First, the tested NIT programs reduce number of hours worked versus the existing welfare system.

Second, the tested levels of progressivity of implicit tax rates did not get around this problem by encouraging work...

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But what about the argument that there is an important benefit — namely, the elimination of the welfare bureaucracy and the dog’s breakfast of “food stamps, public housing, Medicaid, cash welfare, and a myriad of community development programs” that according to Sorman’s article accounts for $522 billion of annual federal spending?

... there is nothing inherent about an NIT that will prevent Congress from creating thousands of pages of special rules, exemptions, tax expenditures and so on, that are collectively just as convoluted as the current welfare system. After all, “tax each person a given fraction of income” is a pretty simple idea too, but look at the 2011 federal income tax code.

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...a huge portion of the costs of the list of programs Sorman provides is health care. Suppose we gave every adult in America an annual grant of $10,000, and some person who did not buy health insurance with it got sick with an acute, easily treatable condition. Would we really bar them from any urgent medical care and just say “Tough luck, but it’s time to die”? Even if you think this would be a desirable public policy, it’s not plausible that the existence of an NIT would somehow change the political calculus enough to make it substantially more of a reality than it is today.

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Inevitably, and justifiably, the taxpayers who will have to work more overtime, take shorter vacations, and eat out less in order to come up with the taxes to pay for an NIT or any other welfare system, will demand some degree of accountability from the recipients; which will, in turn, require monitoring, enforcement, adjudication, and the other manifestations of a welfare bureaucracy.

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The NIT is a fascinating and useful thought experiment, but it’s not a practical public policy.

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Regarding the article originally posted, I had a good chuckle over the author's use of the Alaska Permanent Fund as some sort of shining example of the success of a guaranteed minimum income...as if a dividend payment tied to oil revenues and stock market performance is equivalent to an income payment tied to taxes that are taken out of my pocket. "Joint ownership" my derrière.

Would $900 per person give you "the freedom to elect to work less"? At its high water mark of roughly $2,000 per person, would you have had "the freedom to elect to work less"?

And as you'll note, the Alaska dividend floats year-to-year based on fund performance. Would a true guaranteed minimum income payment financed by taxes work the same way? I doubt it.

Alaska Dividend Blog

On October 3, 2013, most Alaskans received their yearly dividend check—Alaska’s small, nearly unconditional, and nearly universal basic income. This year the dividend was $900, up slightly from last year’s dividend of $878, but still far below the level dividends reached at the height of the stock market bubble in 2008. Now that the fund that finances the dividend has recovered from the financial crisis of 2008-2009, dividends are like to rise over the next few years. However, the long-term future of the dividend is in danger from falling oil revenues.

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Every U.S. citizen who meets Alaska’s residency requirement (and fills out forms verifying their residency) receives a yearly dividend from the state government. A dividend of $900 per person, therefore, amounts to $4,500 for a family of five. The dividend is financed by the Alaska Permanent Fund, a sovereign wealth fund created out of state oil revenues in 1976. Since then, each year a small fraction of Alaska’s oil revenues have been deposited into the fund, which as grown to $48.5 billion as of December 1, 2013. The fund began paying dividends in 1982. Nearly 600,000 Alaskans received the 2013 dividend.

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Guaranteed incomes are pretty much in place now.

All parents of children with incomes below appx $40K are pretty much guaranteed income now. It's called earned income credit (under the right conditions could be as much as $6K. Incomes around $15K get the most). All Parents with children under age 17 get $1K per child (Within certain income parameters).

I see indignant opposition spread across the board's spectrum, which is interesting. Flat taxers might be uncomfortable knowing that this is essentially a rehash of Milton Friedman's negative income tax, the single safety net provided for poverty in normal Flat Tax schemes.

Here's a link to an article on Rome's progressive governmental growth which highlights the corn dole a bit, which is my favorite straw man to present when opposing long-term entitlement programs. It's from the CATO Institute, so statists are forewarned...

crimsonaudio said:

On the scale of ideologies, communism occupies the far left side, so it makes sense that some overlaps exists with liberal ideals. Much like fascism is generally placed on the far-right of the scale.

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Which is odd because both ideologies severely limit the freedom of individuals in favor of state control. That's just how badly skewed present day political thought has become. A two dimensional graph or a left-right graph with anarchy on one end and communism, fascism, and autocracy on the opposite end would be much more accurate. The party most often associated with fascism was a national socialist (NAZI) party. In practice, Stalin's rule was much the same but at its core was not a nationalist movement. And although the rhetorical language differed greatly between the two, the end result was the same and state actions were universally justified as being for the "good of the state/people".
Needless to say, I strongly disagree that fascism and communism occupy opposite ends of the spectrum. And although communism purports to give control to the common man this never actually occurred in practice and even if it had the state (in that case the working class) would still control the economy and severely limit individual freedom. Any scale which puts those ideologies on opposite ends is terribly flawed.

BamainBoston said:

Well, a guaranteed income wouldn't happen without a major reform. That's what it would look like. I didn't realize we were talking about what could get through Congress ever.

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FIFY

BamainBoston said:

Honestly, it's not a crazy idea. You eliminate all forms of welfare, social security, and replace it with a refundable tax credit. So if you work for a living, you are basically getting a much bigger base deduction. If you lose your job or whatever, instead of getting unemployment or welfare or disability, you fall back on your minimum income. The distortion effects are much less than you get from a lot of other social programs. It's an intriguing idea, one that has been supported by some on the right.

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BiB, the next time you are formulating strategy with other power brokers in the Republican party and ya'll are trying to figure out why some of your lifelong republicans have started voting libertarian, take a look at this post and your view in the vaccination thread. That is the answer for many of us.

BamainBoston said:

I mean, if you're leaving the party when someone brings up an alternative view on a message board, then yeah, I guess we're just going to have to wave you goodbye.

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Didn't mean to offend you; I was actually trying to be helpful. And don't really appreciate the snarky comeback. Just pointing out that so many of the republican candidates act so similar to their democratic counterparts that to it seems to us our voice isn't being represented. I believe that is why the tea party was so popular. Many of us don't won't a watered down version of the democrat to vote for, we want a stark contrast. This guaranteed income thing, no matter how you spin it, is socialist in nature.

BamainBoston said:

Well, a guaranteed income wouldn't happen without a major reform. That's what it would look like. I didn't realize we were talking about what could get through Congress today.

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It's not just about what can get through Congress today. Assuming we were able to replace all forms of welfare with a guaranteed minimum income system, I think it's wishful thinking to believe that future Congresses will not restore elements of the eliminated welfare state. Unfortunate circumstances and so-called "societal injustices" will continue to exist even with a guaranteed mimimum income system, and as a result, we can reasonably expect that politicians will create new handouts to address these injustices and buy votes in the process. About the only way we could be successful in replacing the current welfare state with a guaranteed minimum income system is through the amendment process, and as we've seen, even that's not a foolproof method of limiting future Congresses/governments.

Why does no one think this could pass? It doesn't seem like that tough of a sell.

G-VilleTider said:

Didn't mean to offend you; I was actually trying to be helpful. And don't really appreciate the snarky comeback. Just pointing out that so many of the republican candidates act so similar to their democratic counterparts that to it seems to us our voice isn't being represented. I believe that is why the tea party was so popular. Many of us don't won't a watered down version of the democrat to vote for, we want a stark contrast. This guaranteed income thing, no matter how you spin it, is socialist in nature.

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Agreed. Why does the Republican party think it necessary to follow in the footsteps of the democrats? We Conservatives are sick an tired of this and we wish that those in office would stop as well.
It's not that we Conservatives are leaving the party. It's that the party is leaving us. It's made a hard turn to the left, but we're not going with it.

BamainBoston said:

...
To do 10,000 per adult would cost you 2.4 trillion a year.

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*shudders*

BamainBoston said:

Welfare already costs over a trillion, and you can throw in another 200 billion for SSDI. The standard deduction for taxpayers is currently around $6,000 per individual. And that 2.4 trillion includes payments to the elderly, so if you assume part of this would come out of Social Security, you wouldn't spend more money each year than we do now. Take out the elderly all together, and you are down to around 1.75 trillion a year.

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I understand what you are saying.

It goes back to an earlier statement you made that I agree with. If we do something like this even if they by some miracle were able to agree to do away with everything else, it will just get added back later. Every term we will get the same pandering language as raising minimum wage, it will never be enough. In effect we will be adding ANOTHER 2.4 trillion a year entitlement program. I am not the most jaded person concerning our government and our systems, but this is one place I just do not have any trust.

I, LIBtard in Chief, think that program is far too expensive 2.4 trillion to give every adult ten thou. Nope. I will counsel Barack against it. I'll wait till he gets off the phone with Vladimir.

BamainBoston said:

Does this mean I can count on you to support entitlement reform, since entitlement programs cost 2.5 trillion in 2013?

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I support reform But probably in a different manner than you do.

While it is literally true that mandatory spending exceeds $2 trillion, that figure is grossly misleading, because it ignores program-specific revenues. Social Security and Medicare are social-insurance schemes that are primarily funded by payroll taxes. Lots of money passes through those programs, but the net impact on the federal budget is relatively small (less than $200 billion last year).
According to the Congressional Budget Office, Social Security expenditures were $768 billion and Medicare expenditures were $551 billion in 2012. (The Social Security Administration reports spending of $786 billion; I cannot resolve that discrepancy.) However, excluding the effects of the payroll tax holiday, Social Security was overfunded. Revenue from the FICA payroll tax, interest on the Social Security Trust Fund, and taxation of benefits totaled $840 billion. Medicare ran a deficit, but spending of $551 billion was offset by total receipts of $334 billion, including payroll taxes and premiums paid by participants. On a net basis, the Social Security and Medicare combined deficit was well under $200 billion.

seebell said:

I support reform But probably in a different manner than you do.

While it is literally true that mandatory spending exceeds $2 trillion, that figure is grossly misleading, because it ignores program-specific revenues. Social Security and Medicare are social-insurance schemes that are primarily funded by payroll taxes. Lots of money passes through those programs, but the net impact on the federal budget is relatively small (less than $200 billion last year).
According to the Congressional Budget Office, Social Security expenditures were $768 billion and Medicare expenditures were $551 billion in 2012. (The Social Security Administration reports spending of $786 billion; I cannot resolve that discrepancy.) However, excluding the effects of the payroll tax holiday, Social Security was overfunded. Revenue from the FICA payroll tax, interest on the Social Security Trust Fund, and taxation of benefits totaled $840 billion. Medicare ran a deficit, but spending of $551 billion was offset by total receipts of $334 billion, including payroll taxes and premiums paid by participants. On a net basis, the Social Security and Medicare combined deficit was well under $200 billion.

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What tax funds the expenditure makes little difference to me. One may try to separate the pots, but the Federal government doesn't seem to be able to keep their hands out of them. IOUs abound. I think that is another reason Alabama's grossly problematic constitution is hanging on. Nobody trusts the government to keep their hands out of a pot of money set aside for something else.

jps1983 said:

If all other social welfare programs are disbanded and de-funded, I'd consider this idea. If people get a small cash payment, they're responsible for their own well being.

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Only way I'd be on board with it. In fact, I think this might be better than the current system.