Op-Ed; Opinion

Basic income’s experimental wave is over: Time for policies

The wave of basic income experiments in the last two years was a positive development in giving Universal Basic Income (UBI) some level of attention and political legitimacy in Western countries.

It is time to recognize the experimental wave is coming to an end.

Basic income activists in the next wave of UBI political discussions should push for policy changes in the direction of basic income. There are ongoing and completed trials testing cash transfers in countries with different stages of economic development. It makes more sense to build a foundation for policy changes as these results trickle out over the next few years rather than pushing for yet another experiment.

In Canada, the push for experiments backfired because a Conservative government canceled it before any results could be collected. I supported Ontario’s experiment and there was value in the research.

However, Ontario’s cancellation demonstrated that as activists move forward, we must recognize that experiments do not create a political constituency. In Alaska, the partial basic income policy has broad and significant support because everyone has benefited from it. Building a constituency that can be expanded and deepened is where activist energy should be placed in the next stage.

UNICEF funded experiments in India helped make basic income a real political discussion there, and now basic income inspired policies are being proposed by both of the main parties and a minimum income is set to be implemented in the state of Sikkim.

Experiments in developing countries and regions where basic income is still not well known may still be politically necessary. In Western countries, though, activist energy on more experiments rather than policy action seems ill-placed since UBI has already entered mainstream discussion in the West.

Experiments have already shown us cash transfers make people happier, healthier, and free them to pursue what they are interested in. The myths about basic income have been consistently undermined, particularly the idea that it would decrease work in any meaningful way. More experiments will keep telling us that giving people cash is generally good in most of the ways we measure positive outcomes.

How many times do we need an experiment to tell us cash transfers do not make people “lazy”?

Those who will not be convinced by the existing and upcoming experimental results will not be convinced by yet another experiment. The reaction to Finland’s experiment is evidence that unpersuadable opponents will latch onto even neutral effects on employment to prove basic income is a “failure.”

To truly put UBI to the test in America and Europe, actual policies that incorporate significant elements of basic income should be pushed. Cory Booker’s baby bonds is a start. Expanding the Earned Income Tax Credit that incorporates students and caregivers would instantly help millions. Political campaigns such as Andrew Yang’s are also important to bring the debate to a mainstream audience.

That is not to say pilot programs with the intent of expansion are not helpful. These provide valuable information to governments on how to implement basic income. Pilot programs with the primary intent of yet more research on “laziness” are the issue.

However, as the experimental wave of basic income begins to sunset, activists must look toward the next wave, which should focus on concrete policy steps that realize the spirit of basic income.

For these reasons, I see more experiments as an inefficient use of activist energy in the West. Worse, pushing experiments focused on gathering more data trades off with more useful discussions of how to bring elements of UBI to reality in the near-term.

 

About Tyler Prochazka

Tyler Prochazka has written 83 articles.

Tyler Prochazka is a PhD candidate in Asia Pacific Studies at National Chengchi University in Taiwan. He is the features editor of Basic Income News and the chairman of UBI Taiwan. Support my work with UBI Taiwan: https://www.patreon.com/typro Facebook.com/TaiwanUBI @typro

The views expressed in this Op-Ed piece are solely those of the author and do not necessarily represent the view of Basic Income News or BIEN. BIEN and Basic Income News do not endorse any particular policy, but Basic Income News welcomes discussion from all points of view in its Op-Ed section.

4 comments

  • Francis Li Goodwins

    Are you delusional or what? “How many times do we need an experiment to tell us cash transfers do not make people “lazy”?” The whole idea of “experiments” has been a fraud from the start. Just go back to the “experiments” in the ’60s and ’70s and look what happened. Its all ploy to delay, distract and subvert the idea of basic income. Why? Because a real basic income fundamentally alters the econ0mic power structure of the establishment (unless, like Andrew Yang’s plan, it is carefully constructed as a tool for the socialist/communist overlords). For many decades the establishment simply refused to publicize anything to do with guaranteed income. As soon as public interest grew to the point where it could not be ignored, the “experiments” began. Believe me, we’ve got another 50 years of “debate” about the experiments, and maybe another 50 for the next round of new experimental designs. And whose to blame for this farce? The basic income advocates. Experiments will prove nothing … they are just for delay and obstruction. Imagine if the founders of this country had held experiments to see whether a government “of, for and by the people” could work. Can you really imagine that the USA would have been founded after a successful experiment in some backwater New England town suggested a government based on individual liberty with equal justice for all was possible? Make no mistake, a real basic income program would be the greatest revolution in human history, and it won’t happen because some crafty politician sneaks it in by the back door (as Nixon tried to do with the Family Assistance Plan that passed one house of congress in the last millenium). If you want a basic income, then start thinking about the idea and its ramifications, instead of trying to win by media spin. The basic income trials are a fraud.

  • Bernard Kirkham

    Basic Income can be accepted by the Right as a less wasteful bureaucratic solution to their eternal irritant, the poor, particularly the feckless ones.

    For the Left it needs no justification other than justice, the recognition that wealth is common wealth.

    Pseudo-scientific “experiments” carried out with tiny numbers can give no useful conclusions, they only justify the existence of a few academics and chatterers.

    If BI is accepted, the battle will be around the level it is set as to whether it is redistributive or not, and to what extent. Well said, Francis Goodwins

  • Robin Harrison

    1 Arguments that the time for pilots is over are right. Some practical actions are now needed.
    2 It needs to be recognised that the many must want and vote for BI. For this to happen the idea must boiled down to the simplest possible and unambiguously favourable (to the many) one line proposition. Anything of any complexity will allow scope for reactionary forces to pick it apart and to so divide opinion that nothing ever happens. (Surely, after the last three years, all in the UK understand this as basic political reality.)
    3 Absolutely essential is the election into government of a party sympathetic to redistributive policies under a simple manifesto offer that the many simply cannot refuse and which also sweeps away virtually all the funding complications of a BI – as described in the following:

    ———————————————————————————————————————–

    How to be honest about raising employment tax revenues to fund all sorts of public goods including a basic income, and still clinch a general election.

    A Introduction:
    A1 Eliminating personal tax allowances and the equivalent disregards in respect of Employee NICs could yield well over £100 billion p.a. It is now common to look to this to fund the resurrection of the UK’s rundown health and other public services or to start funding a Citizens Basic Income (CBI). But, if a hopeful Chancellor of the Exchequer (COTE) proposed in an election manifesto to do such a thing crudely, the right-wing media would gleefully spin it as meaning that “hard working people” would lose the £2500 p.a. (twice as much and more for the higher paid) their income tax allowances are worth, plus something over £1000 more in respect of NICs, and the idea would go down like a lead balloon along with the electoral fortunes of the proposer’s party.
    A2 So, how to eliminate those allowances in a way which would: shrug off any media fulminations; be simple to get across to the electorate; be enthusiastically seized upon by the many?

    B What to do:
    B1 Gradually, over around six years (seven steps but see D7), starting very soon after the election that mandates it, reduce to zero the rates for Employee NICs (including the rate above the Upper Earnings Level) and the 20% standard rate part of income tax .
    B2 Concurrently, gradually raise the rate for Employer NICs as necessary to replace the lost revenue – and to generate whatever additional revenue COTE deems necessary.
    B3 Early on, give the job of paying the remaining 20% and 25% tax on wages above the present thresholds for higher wages (or whatever rates and thresholds COTE sets) by those higher wage earners (see D8). Let’s call this Pay It Yourself (PIY).
    B4 Concurrently with B1 and B2, gradually eliminate the Secondary Earnings Threshold so that, after the six years, employers will pay a flat-rate tax on all of all wages (and bonuses) (FRTAAW).
    B5 So that all employees get a rise in take-home pay in each of the 6 years, continue with the now usual annual increases in the minimum wage.

    C Key outcomes:
    C1 Income tax and Employee NICs currently add up to about 20% of the median wage so, combined with the minimum wage increases, the many would be guaranteed 7 increases in take-home pay of around 3% p.a. (about the current average). Some employers might wish to pay more.
    C2 Employee NICs will be eliminated for all as will income tax for all but higher earners.
    C3 The FRTAAW will produce a payroll administration system of irreducible simplicity whereby a simple app would automatically combine each payment of a wage into an employee’s bank account with the simultaneous payment of the FRTAAW to HMRC. This will produce multi-billion savings in payroll tax administration for employers and government along with many other benefits.
    C4 Businesses will be weaned off profiting from the tax-payer subsidy of low wages.
    C5 Crucially, this policy will tip the balance at an election and could quickly be introduced to give voters what they had just voted for – and leave something for the following election.

    D Brief discussion:
    D1 The reform is designed to smooth the way towards substantial increases in employment tax revenues (but see D11) so that they can be spent on improving public services – and eventually on a CBI. The overall effect will be redistributive – and unabashedly so. To frame it otherwise would be both timorous and dishonest and would also miss out on its political appeal (to the many) and risk the charge of taxation by stealth.
    D2 If all were done on a revenue neutral basis, only employers who would have awarded rises leading to lower rises in take-home pay than this proposal and those who currently pay very low or very high wages, would see increased employment costs (many would see lower costs). (But, the aim being to generate extra revenues vital to the betterment of vital public services (D1), it won’t.)
    D3 Any extra revenues must come from somewhere. While everybody will benefit from spending more on the UK’s cure-and-care and other public services, the matter of who will end up paying for it all is admittedly fuzzy. Certainly, there will be gradual increases in some prices as businesses pass on their gradually realised higher costs, particularly in the case of goods at present produced in the UK by state-subsidised cheap labour and of public services (public sector employees will get the increases in take-home pay too).
    D4 Voters will delight in that refunding their treasured health service can go hand-in-hand with their assured increases in take-home pay and the eventual elimination of their wage taxes.
    D5 At present, under PAYE, employers already find and pay the money for all take-home pay and all payroll taxes and the question of from whom the taxes are due is, even now, really only a matter of attribution and perception. Note too that “tax on all of all wages” is already gradually introduced over the wage range of £100000 to £125000 p.a. and, thus, the principle already established.
    D6 To be able to keep all of one’s wages, which will be the case for the many, is a great incentive to work. Moreover, paying no tax on one’s wages will rather defuse the resentment expressed by some that the tax/welfare system (or a CBI) takes money out of their pockets to support the idle and inept. (As an aside, a CBI system might allow the deferral of one’s CBI in return for a higher CBI in retirement – a simple and unbeatably financially efficient accompaniment to the orthodox pension system which would both ameliorate the growing pension problem and much reduce the introductory costs of a CBI).
    D7 The reform’s gradualism eases the necessary adjustments. The steps need not be annual. Quarterly steps might make for adjustments which are even easier (and less worthwhile to game).
    D8 The extra taxes on higher wages need to be paid directly by their earners (PIY) to permit the establishment of the FRTAAW. To the same end, workplace pensions and all employment tax related allowances (the Blind Person’s Allowance and the Employment Allowance for example) need to be managed separately from the payroll tax.
    D9 Business people might find any higher payroll costs less objectionable if they reflect on the cost to the state of the regulatory, social, and physical infrastructure without which business would be impossible and the £100000 or so the state has spent on the education and upbringing of each employee – and if they also reflect that they don’t think twice about the principle of paying all their other suppliers for what they get from them..
    D10 To eliminate the question of whether benefits (and a CBI) should be seen as taxable income, all benefits and the state pension (and CBI) could simply be paid net of a notional tax paid at source which, because the source is the government, would be self-cancelling.
    D11 The conventional-because-convenient raising of large amounts of revenue from the taxation of employment despite its pernicious dead-weight burden, should, one day, be replaced, at least in part, by more imaginative and constructive taxes such as a (negative dead-weight loss) land value tax or more benign dead-weight bearing “green” taxes. Until then, this is the best that can be done.
    D12 There’s no surer way to win an election while being honest about increasing employment taxes.
    ————————————

    It is notable that none of those decision-putting-off pilots included trialling a BI which:
    *In recognition that all public systems in our democracy will always evolve in response to democratic forces, was designed to evolve (or be cancelled if any political agency thought they could get away with doing so).
    *Gave, at first, a little to everybody with the intention to increase the amounts and adjust how much would be given to whom according to evolving democratic opinion. (To the poor a little can mean an awful lot.)
    *Started with the simplest possible administration of BI (say by sending everybody with a NI number £40 a month) with the intention of evolving the administrative system as time went by. (The employment tax reform discussed above, by which the relatively uncontroversial raising of the necessary £32B a year would be facilitated, is assumed.)

    It is suggested that this is how BI should be introduced – as the simplest possible first step in an ever-evolving system for the fair distribution of the wealth of the nation.

  • As much as I would like to debate policies, they look rather obvious.

    UBI is a solution for income inequality. Or, rather, we need UBI to lower the after-tax inequality to some reasonable level. Why we should target income inequality? Because if it was low, everyone would already be making tons of money. For example, the US personal income is $18 trillion annually. Distributed equally among adults, it is good for $65,000.

    How far we should lower income inequality? How about the way it was in the 1970s? It sounds reasonable. And the back of the envelope calculations suggests that $2000/month UBI should get us there.

    How it should be financed?: Well, that’s obvious — if we are lowering the income inequality, it should be financed by raising the income tax on the high-income earners. Which means that the whole thing — financing and the UBI itself can be implemented simply by adjusting the income tax brackets. And that is pretty much all there is to it — we can have it up in running in a few weeks.

    This link has all the details:
    https://link.medium.com/GjWlRyLNkX

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