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Scott Santens: There is no policy proposal more progressive than Andrew Yang’s Freedom Dividend

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With an article on medium, Scott Santens, long time Universal Basic Income (UBI) advocate, has explored in depth Andrew Yang’s proposal of a Freedom Dividend (FD).

The Freedom Dividend, one of the pillars of Andre Yang’s campaign for the democratic nomination for the 2020 American presidential election, is a $1,000 UBI for every American. Santen’s article discusses in detail the implications the proposal would have if introduced, and defends it against claims that it would end up increasing inequality or destroying the safety net. In Santen’s words, “The freedom dividend would be the single most progressive policy advance ever signed into law in America history”.

In order to clarify how and why the Freedom Dividend would work as a progressive measure to enhance freedom and as an instrument against poverty and inequality, Santens provides answers to two questions regarding its design:

1) Why to provide people with a choice between existing programs and the Freedom Dividend and not let people keep everything?

People would need to voluntarily opt out from some assistance programs, based on low income, whilst other contribution-based programs would continue to exist on top of the FD (health care remaining a separated issue, not connected with the FD).  Santens’ article points out that this is done in order to maximize unconditionality and the incentive to work by avoiding welfare traps.

2) Wouldn’t the funding of the FD through a 10% value added tax –as proposed by Andrew Yang- make it a regressive measure, thus disproportionately disadvantaging the poor?

Even though a tax on consumption is usually considered regressive, as those with lower incomes tend to spend more of it in consumption when compared with those having higher incomes, the VAT-UBI design ends up making it a progressive instrument. That is, those on the lower part of the distribution would end up receiving more than what they lose because of the VAT, which would be rebated by the FD. Santens quotes a distributional analysis by The UBI Center, that concludes “that the bottom 10% (of the income distribution) would see their disposable incomes increased by almost 120% while the top 10% would see their disposable incomes reduced by 4%.”

Moreover, Santens says, the FD would  strongly reduce poverty with “74% fewer households would have disposable incomes that fall under the federal poverty line” and impact heavily on inequality, causing a drop of 15% in the American Gini index.

UBI would fill the holes in the existing safety net, a “welfare mess” that leaves many people behind, and which design is far too complex, inhumane and not efficient, as Santens explores in depth in his article.

“Is it progressive to not support the greatest reduction of poverty and inequality — and greatest increase in freedom and dignity — ever proposed in American history, because you insist upon preserving paternalistically neoliberal conditionality?”

More information at:

Santens, Scott, “There is No Policy Proposal More Progressive than Andrew Yang’s Freedom Dividend”, Medium, July 22th, 2019.

About Daniele Fabbri

Daniele Fabbri has written 21 articles.

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.

3 comments

  • gespil

    The fact is that Yang’s fake UBI is consumption-based UBI, which means you have to spend around $120k per years in order to receive your $12K raised from the 10% VAT tax on your consumption.

    Yang blames the “robots” but he taxes consumption instead of taxing the ownership of those “robots” LOL
    Yang’s UBI is so very fake.

    The sources for his fake UBI are:
    1) Consumption (VAT tax, carbon tax, etc. )
    2) The current welfare system
    3) The hope that the economy will grow.

    It is laughable if anyone with a bit of brain would take Yang’s fake UBI seriosly… unless one is Wealthy.

    To raise the funds for UBI Yang wants to tax the “beer” I pour out of my bottle instead of the beer I have in the bottle.
    The difference is , under Yang’s fake UBI if I do not drink a lot of beer you die from thirst.

    The real UBI is always based on taxing ownership of Wealth (i.e. the beer in my bottle).

    • j3lack

      1) VAT is production based not consumption based.

      2) Does some of the tax trickle down to consumers? Yes but with the freedom dividend you’d have to be a reckless spender for it to wash away the benefits of your dividend.

      3) The sources of his UBI are yes the VAT, savings from people opting out of cash-like welfare, and growth in the economy but also a financial transaction tax, carbon tax, and cost savings on our over burdened institutions. you can disagree with it but by making it a balance budget proposal he will only need a slight majority to get it passed into law.

      4) Insulting the intelligence of people you disagree with hardly counts as a valid argument.

      5) Maybe you should drink a little less, saves money and improves your physical and mental health.

  • Yang’s freedom dividend is a good reform. If he would pair it with my 50% Discount/Rebate policy at the point of retail sale the two monetary policies would become the monetary paradigm change we’re all seeking and needing.

    https://www.amazon.com/dp/B07PLNJLRN/ref=sr_1_1?keywords=wisdomics-Gracenomics&qid=1552358772&s=books&sr=1-1-catcorr

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