This past presidential cycle, libertarian presidential candidate Gary Johnson suggested to BI News that he was “open” to the universal basic income. Johnson’s 2012 running mate Judge Jim Gray recently laid out a proposal for broad reform and simplification of the tax code, as well as providing a guaranteed annual stipend of $15,000. The stipend would be gradually taxed away by 50 cents for each dollar. Those making $30,000 and above would not receive the stipend.
Gray said that his policy would effectively address poverty and is consistent with “liberty” and “compassion.” At the same time, it would remove the poverty traps that people in poverty face.
“Unlike today’s welfare and social security systems, this system always has incentives to work and earn the extra dollar,” Gray said.
The full interview can be found below.
What inspired this idea for the monthly stipend?
I don’t recall specifically. But I have always believed that institutions should regularly be revisited with an eye toward increasing their social incentives. Our tax system is terribly complex and in many ways harmful. If it could be reformed and simplified, that would be a wonderful occasion to address all welfare issues and, along the way, address our homeless problems as well.
Where would the funding come from to pay for the $15,000 stipend?
Abolish all other welfare programs, and all the bureaucracies that go along with them. That should leave plenty of money to support this stipend.
Would there be any targeted programs that would remain, or would they be entirely replaced with the stipend system? For example, medical programs, or programs for the disabled.
The stipend would have to be weighted to address people with truly special needs. In addition, I would also employ a voucher system to facilitate people purchasing health insurance of the private market, based upon a sliding scale for need.
Can you explain the relationship between your proposal and expanding liberty?
Welfare systems are extremely intrusive, and in many ways inequitable. This system would be implemented voluntarily, which is consistent with Liberty, and would be far less judgmental and intrusive – all of which is fully consistent with Liberty.
You said we should have this safety net because “that is who we are.” What did you mean by that?
I believe we Americans are compassionate people. If given a choice to provide for those in need, Americans would choose to assist – as long as they believed this was a workable system, and everyone understood this is not an “entitlement,” but simply compassionate.
How will the private sector respond to this stipend program? What new opportunities or businesses may arise that are not possible now?
Really good questions! I believe the private sector will fully support it, for reasons provided above. And this system would also provide opportunities for people to become involved in the arts, public volunteerism and experimentation with other business opportunities, because it would provide them a back-up safety net to hedge against failure.
Do you think the $15k would encourage laziness? How would people respond to not being forced to work?
We will always have incentives to laziness. But, unlike today’s welfare and social security systems, this system always has incentives to work and earn the extra dollar. Our present systems punish working because recipients lose more money by working than they gain. And it also encourages attempts to “game the system.”
Update 3/27: Clarified the stipend will be taxed away up to $30,000.