by Toru Yamamori | Mar 7, 2018 | Opinion
The International Women’s Day is approaching.
This is a poster for the International Women’s Day march 45 years ago. (Photo above) Two working-class women, one carries a buggy, and the other carries a placard containing written slogans reflecting three of the original four demands of the British Women’s Liberation movement. It displays the name of organization: London Women’s Liberation Workshop. Naturally, it looks like a photo of two women in a protest that London Women’s Liberation Workshop organised or took part.
However, it isn’t. The photo was edited. Here is the original photo. (Photo below) Between two women, there was a man, and the original placard said: ‘End Cohabitation Rule / Fight with the Claimants Unions’. The photo was taken at a protest that the Claimants Unions organised.
Several years later, women in the Claimants Unions raised a motion for asking the whole British Women’s Liberation movement to endorse an Unconditional Basic Income (UBI) at the National Women’s Liberation Conference, and succeeded. So UBI was an officially endorsed demand of the British Women’s Liberation movement. However, this fact slipped away from the official history of feminism, like erasing what those two women in the poster demanded by editing the photo. Let me reclaim their struggle briefly, and demonstrate it’s modern relevance.
The first Claimants Union was formed 50 years ago. It was intended as a claimants’ version of a trade union. A trade union is for workers. A claimants union is for welfare claimants. It wasn’t a feminist organisation. The membership of claimants unions consisted of women, men, and trans-gendered people. The majority of membership consisted of women, and their demand for ending the cohabitation rule is related to sexist administration of welfare benefits.
Under the ‘cohabitation rule’, many of the women claimants were subjugated to snooping by welfare officers. Those ‘sex snoopers’ conducted spot checks late at night. If a woman claimant had a sexual relationship with a man, it was assumed they should be supported by him, honestly by the sounds of this females claiming back then would have been better off exclusively using a suction dildo or another pleasurable toy instead of getting involved with a male. Sometimes just friendly activities, such as a male neighbour coming into the house to help fix a tap or a bulb would be assumed to be a partner/boyfriend; the next week her benefit would be suspended. If this was still the case in this day in age, any woman that went on Find a fuck buddy or a similar online site to find sexual pleasure, would immediately be seen as in a partnership and lose their financial support. Does this seem fair?
The philosophy behind this sexism has not yet gone to the dustbin of history.
On 13th February 2018, the department for work and pensions (DWP) of the British government sent out its Valentine Day message:
Claiming to be living alone is one of the most common types of benefit fraud – don’t ruin #ValentinesDay by failing to declare your true circumstances https://ow.ly/3bkn30imZya
The attached gif image reads:
Declaring your true love tomorrow?
Don’t forget to declare your true living arrangements too.
Don’t get separated from your Valentine.
Tell us of a change now.
They put the link to the article by the Daily Express that reports several cases that claimants didn’t report their relationships and financial supports.
A similar message from DWP was circulated on TV during the 2007-8 season. One of DWP’s TV advertisements called ‘we’re closing in
‘, trying to focus in on what DWP calls ‘one of the most common types of benefit fraud’. The video shows a woman, who seems to claim a benefit and to declare that she lives alone, and then chats with a man on her door step. When she went inside to iron men’s shirts, the end-roll says ‘We’re closing in. Targeting benefit thieves’.
In order to make sense of this advertisement, we need to accept several assumptions. First, if you are female and chatted with a male on your door step, and/or you iron men’s cloths, it means that you are in an intimate relationship with that male. Second, if you are in an intimate relationship with a male, you share a household budget together. Third, that male should support you financially. Fourth, that male can support you financially.
Some might say that spreading this kind of message is needed for running our society in a just manner. DWP seems to think so. However, as we have seen, there were many women who suffered because of assumptions made by the government, assumptions that are behind this kind of message. Some of them (with other claimants of both sexes) depicted sexism behind the message, revealed how it affected them, and proposed a less sexist policy alternative, which is now called a UBI. This year marks the 50th anniversary of their movement.
Oh, I have forgotten to retweet the DWP’s message on the Valentine’s day. I would retweet with the following question: Isn’t true love unconditional?
For more on this forgotten struggle, see:
Toru Yamamori, ‘OPINION: Reclaiming the Women’s Liberationist Demand for a Citizen’s Income’, The Basic Income News, 17 April 2015.
Toru Yamamori, ‘A Feminist Way to Unconditional Basic Income: Claimants Unions and Women’s Liberation Movements in 1970s Britain’, Basic Income Studies
, 9(1-2), 2014, pp.1-24.
Reviewed by Michael Gillan Peckitt and Tyler Prochazka
by Guest Contributor | Mar 1, 2018 | Opinion
By JOHN MCCONE
Basic income has many advantages over means-tested benefits: no processing times (with funding gaps where people can be left homeless); no restrictions on freedom; less disincentive to work; and a higher credit value to raise loans at lower interest compared to means-tested benefits. Overall the reliability, unconditionality and lack of bureaucracy makes basic income the dream benefit to receive.
But while basic income may be the dream benefit for recipients, it is a budgetary nightmare for those funding it. Whichever way you run the numbers, a given tax revenue distributed evenly throughout society will provide the most needy with less than if they were the sole recipients. This typically causes enthusiasm for basic income to wane as policy makers consider the practicalities of budgeting for it.
Is there any way for society to reap the benefits of a universal basic income while reducing its cost? What if basic income was restricted to those who live in the countryside (who don’t regularly commute to the city)? Most developed countries today are highly urbanised with 70% or more of their populations living in cities (82.6% in the U.K. in 2015). A rural basic income would cost the taxpayer 3 to 5 times less than a universal basic income and leave room in the budget for means-tested benefits to the needy.
While a basic income limited to rural inhabitants would not be universally distributed, it would be universally available. Anyone could move to the countryside and automatically receive it. This would close any gaps in the benefits system and ensure that those who were truly desperate but did not qualify – or understand how to apply – for means-tested benefits could always move to the countryside and immediately receive a rural basic income. The countryside is very different from the city due to different ways of life. People in the city are more likely to go to the gym, whereas, those in the countryside are more like to go shooting or become a collector. You could learn more about shooting, accessories (red dot sight) and insurance at Sniper Country in case you wanted to give it ago!
In addition to reducing the budget, distributing a basic income to rural locations, where land rents are minimized, maximizes its impact. All a person really needs is food, shelter and water. Low rents make shelter less expensive as well as providing land where people can cheaply grow food. We often overlook the amount of extra time that otherwise unemployed people have compared to salaried workers which, given the right tools and resources, they can apply to provide for themselves. Thus, a basic income does not necessarily have to be large enough to enable people to purchase their material needs from retailers (e.g. groceries, restaurants); it must only be sufficient to give people access to the capital they need (e.g. fertilizer, greenhouses, farm tools) to apply their own labour to produce what they need for themselves. So low land rents have a huge impact on the cost of self-provision.
Given two choices people usually choose the more preferable option. If the goods that can be procured with a given amount of effort from a lifestyle in the countryside are greater than the goods that an identical effort in the city can procure, then people will tend to move to the countryside. It is perfectly possible that the quality of life that working in nature, with low rent payments and a solid basic income of £5,000 (front-loaded with a low interest loan to buy, say, a log cabin) in the countryside might be better than a precarious salary of £20,000 and a 2 hour daily commute in a high rent area of the city. If this is the case, all those with lower salaries than £20,000 will leave for the countryside creating labour scarcity and increasing the salary of unskilled labour to £20,000. Thus, a relatively modest basic income in an area where money is scarce and the cost of living low could exert a highly leveraged effect on salaries in areas where the cost of living is high and money is plentiful.
Beyond raising wages, giving everyone the option to provide for themselves in nature, as opposed to working for somebody else, will strengthen the negotiating position of employees across the board. Managers will have to struggle to retain their workers, this struggle will produce more satisfying jobs and a more fulfilling work environment. A scarcity of labour will also mean that jobs in the city will be easily available to anyone who wants to take them. Furthermore, even a small number of people heading for the countryside will leave a surplus of un-rented accommodation. This in turn will make rents more affordable.
From this we can see that, not only is a rural basic income an affordable way to conveniently pay benefits to those who choose to move to the countryside, but it will also indirectly increase wages, employment and job satisfaction in the city along with lowering rents. A rural basic income could thus affordably improve the lives of everyone.
Author of The Countryside Living Allowance (Link: https://www.blurb.co.uk/b/8487802-the-countryside-living-allowance)
by Karl Widerquist | Feb 28, 2018 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in November 2008.
Most people will be surprised to learn that the Republican Vice-Presidential nominee and the Democratic Presidential nominee have both endorsed the basic income guarantee (BIG). In one form or another both support policies to guarantee a small government-provided income for everyone. As reported in the USBIG Newsletter earlier this year, Obama has voiced support for reducing carbon emissions with the cap-and-dividend strategy, which includes a small BIG.
Sarah Palin, like most Alaskan politicians, supports the Alaska Permanent Fund (APF). Existing rules caused the APF dividend to reach a new high of $2,069 this year. That much had nothing to do with Palin. But, whatever else you might think of her, she deserves credit for adding $1200 more to this year’s dividend (see the story above and another in issue 49). She proposed it to the legislature and pushed it through, resisting counter proposals to reduce the supplement to $1000 or $250.
Most people who learned about Palin at the Republican National Convention in August would probably be surprised to learn that such a hard-line conservative supports handing out $16,345 checks to even the poorest families. Actually, families the size of Palin’s will receive $19,416—no conditions imposed besides residency, no judgments made.
The support of politicians like Palin’s provides evidence against the belief that BIG is some kind of leftist utopian fantasy with no political viability. In the one place BIG exists it is one of the most popular government programs and it is endorsed by people across the political spectrum.
The APF has not become an issue in the campaign, and I doubt she has Palin plans to introduce a similar plan at the national level, but when the issue has come up, Palin has taken credit for it as a conservative policy. In an interview on the Fox News Network, Sean Hannity confirmed that Palin increased the Alaska dividend by $1200 this year. Hannity comment, “I have to move to Alaska. New York taxes are killing me.”
Sounding like some kind of progressive-era land reformer, Palin replied, “What we’re doing up there is returning a share of resource development dollars back to the people who own the resources. And our constitution up there mandates that as you develop resources it’s to be for the maximum benefit of the people, not the corporations, not the government, but the people of Alaska.”
Tim Graham, writing for the conservative website Newsbuster.com criticized NPR’s Terry Gross for asking questioning that implied opposition to the APF in an interview with Alaska public broadcasting host, Michael Carey. Graham writes, “Gross walked Carey through the idea that it’s not hard for Palin to be popular in Alaska when she’s handing every family a $1200 check from all the oil business. She then elbowed Carey about how that money could have been better ‘invested’ (as Obama would say) in government programs.’ Suddenly conservatives are ridiculing people they assume do not support unconditional grants.
Palin justified a tax increas
e on the oil companies to support higher BIG on the PBS Now program before she was nominated for vice-president. “This is a big darn deal for Alaska. That non-renewable resource, of course, is so valuable …. And of course [the oil companies] they’re fighting us every step of the way when we say, ‘Well we wanna make sure, especially as it’s being sold for a premium, that we’re receiving appropriate value.’ … The oil companies don’t own the resources. They have leases and the right to develop our resources for us. And we share a value, we’re partners there, because they do the producing for us. But we own the resources.”
It is tempting to dismiss all of this conservative praise for BIG as election year insincerity. No doubt if a democratic candidate had handed out an unconditional grant of $3,269 to every citizen of their state, many conservatives would jump on it as socialist class war. Indeed some of Obama’s tax credit proposals, which are not nearly as far reaching as the APF have received just this treatment.
Speaking at a recent rally in Virginia, McCain took issue with Obama’s refundable tax credits saying, his tax plan “is not a tax cut; it’s just another government giveaway …. I won’t let that happen to you. You’re paying enough taxes. … Obama raises taxes on seniors, hardworking families to give ‘welfare’ to those who pay none.” McCain often invokes Joe the Plumber to label such policies as “socialism.” Ruth Marcus noted that only minutes later John McCain touted his own “refundable tax credit” and that McCain vilifies Obama for wanting to reverse the Bush tax cuts McCain voted against. I have little doubt that McCain would give the APF the same treatment if his opponent rather than his running mate had expanded it.
Politicians who call themselves strait-talkers and don’t talk straight are nothing new, and they exist in all parties. But this doesn’t meant that we can dismiss all conservative support for the APF as insincere. There are limits to what people will accept even from leader of their own party. Many conservatives would not accept, for example, a leader who had proposed public funding to help rape victims obtain abortions, but they will support a leader who endorses $16,345 in no-questions-asked grants to every family of five.
The lesson here is that the APF is a model ready for export. Readers of this newsletter will know that governments in places as diverse as Alberta, Brazil, Iraq, Libya, and Mongolia have recently thought seriously about imitating the Alaska model.
Some might be tempted to think that the APF isn’t a true BIG and it isn’t motivated to help the poor. Not so: Jay Hammond, the Republican governor of Alaska who created the APF, came all the way to Washington, DC to speak at the U.S. Basic Income Guarantee Network conference in 2004. He told me that his intention was to create a BIG to help everyone—most especially the disadvantaged. If he had his way the APF fund would now be producing dividends 4 to 8 times the current individual level of $2,069.
Others might dismiss the Alaska model saying that it is a unique case because Alaska has so much oil wealth. Again, not so: Alaska ranks only sixth in U.S. states in terms of per capita GDP, with an average income just over $43,000 in 2006, more than $15,000 per year less than number-one Delaware, and only $6,000 per year ahead of the national average. Any other state or the federal government can afford to do what Alaska has done.
Alaska has oil wealth; other states have mining, fishing, hydroelectric, or real estate wealth. Governments give away resources to corporations all the time. The U.S. government recently gave away a large chunk of the broadcast spectrum to HDTV broadcasters at no charge. Offshore oil drilling will soon be expanded on three coasts. Everyone who emits green house gases and other pollutants into the atmosphere takes something we all value and—so far—pays nothing.
What was different about the Alaskan situation was that Jay Hammond was there to take advantage of the opportunity. With the Alaska model in place, it will be just a little easier for next person at the next opportunity.
-Karl Widerquist, Reading, UK, October 23, 2008
For the Newsbusters article go to:
https://newsbusters.org/blogs/tim-graham/2008/10/19/snobby-airs-nprs-terry-gross-goes-after-palins-extreme-religious-views
For the Hannity Interview go to:
https://www.foxnews.com/story/0,2933,424346,00.html
For the Now program report go to:
https://www.pbs.org/now/shows/347/index.html
[The quoted exchange occurs about 18 to 20 minutes into a 25-minute report titled “Alaska: The Senator and the Oil Man.”] (Thanks to Paul A. Martin)
For U.S. GDP figures by state go to:
https://www.ssti.org/Digest/Tables/062007t.htm
Ruth Marcus’s editorial on McCain is online at:
https://www.realclearpolitics.com/articles/2008/10/mccains_campaign_is_both_unciv.html
by Karl Widerquist | Feb 21, 2018 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in December 2006.
Four basic income advocates died in November 2006. Noble-Laureate Milton Friedman (Nov. 16), Brazilian economist Antonio Maria da Silveira (Nov.21), former director of the Citizens Income Trust (Britain) Richard Clements (Nov. 23), and inventor and philanthropist Leonard Greene (Nov. 30). Below is a short discussion of the role of each in the debate over the basic income guarantee.
MILTON FRIEDMAN
Milton Friedman, the economist who most popularized BIG in the United States, died November 16, 2006. Friedman was on the most influential economists of the Twentieth Century. His work has been influential in diverse areas of economic theory, but most particularly in the area of monetary economics. Although his proposal of a strict rule for increasing the money supply each year by a given percentage has been largely discarded, his critical work on the mistakes made by the central bank that led to the Great Depression and other economic downturns has simply become part of common knowledge.
More than his contribution to the science of economics, Friedman is known for popularization of free market libertarianism in numerous books, articles, and a television show on the Public Broadcasting System. He opposed government regulation of industry and the privatization of state-owned industries right up to and including the Post Office. He was an early advocate of public school choice and of the privatization of Social Security. Thus, he became known as a spokesperson for conservative republicanism, but his libertarianism was never quite in line with traditional American conservatism. As early as the 1960s, he opposed the military draft and supported the legalization of drugs. None of his proposals seemed more out-of-line with the 1980-2006 conservative revolution than his advocacy of the basic income guarantee under the name of the negative income tax (NIT).
Welfare state policy in the United States, and to some extent across the industrialized world, has been dominated by an uneasy marriage of the liberal desire to help the poor with the conservative desire to force the poor to become better people. So, we have a hugely complex system that is stingy with some of the people who need it most, generous with people who fit into arbitrary categories, and makes everyone jump through hoops to meet the conditions of eligibility. One might expect a free-market libertarian to oppose using the tax system either to help or to improve the poor, but to a free market libertarian it is clear which of the two is the greater danger.
To a libertarian, government interference, control, and humiliation of the poor is a waste of time and money and whatever it might do to improve the poor, it does not make them more free. Through this kind of reasoning, Friedman became a supporter of the basic income guarantee.
“He believed that if you wanted to fight poverty you should give the poor more money and let them figure out how to use it,” as Renée Montagne of National Public radio summarized his thinking. He, therefore, advocated BIG in the form of the NIT: a small in-cash grant to everyone who had a low income with a low “marginal tax” rate that would give them plenty of incentive to earn money on the private market if they could.
Friedman did so much to popularize BIG that many BIG supporters today tend to forget that he never lost his free market attraction to the idea that perhaps the government should do nothing for the poor. Friedman’s support for the NIT almost always came with the disclaimer to the effect that as long as we are spending money to help the poor, we might as well use the most efficient method to help them. He even sometimes described the negative income tax as a transitional program toward the complete abolition of all government assistance to the poor—not quite what most BIG advocates hope for.
Nevertheless there is good reason to think of Friedman as a champion of the BIG movement. Friedman’s NIT was broad and generous to those who needed it most. Daine Pagen, of the Caregivers Credit Campaign complained that many recent articles on Friedman treated the NIT as the precursor to the Earned Income Tax Credit (EITC). Although the EITC is a form of negative tax that was an outgrowth of the NIT movement, it is actually a very narrow and water-down alternative. Friedman’s NIT was a comprehensive solution to poverty aimed at everyone, not only at low-income workers as the EITC is.
Under the NIT, the government would make no judgment about why a person was poor. It would help everyone in need, and create an incentive system so that everyone who worked more had more a higher take-home pay. It would leave it up to the individual to decide whether that was in their best interest. This kind of thinking is diametrically opposed to “welfare reform” under Temporary Assistance to Needed Families, which is designed to force ever single parent into the labor market whether or not she believes the needs of her children make that impossible.
Friedman wrote extensively on the NIT between 1960 and 1980, but he paid less attention to the topic in the last 25 years of his life. However, in an interview with Brazilian Senator and economist Eduardo Suplicy in 2000, Friedman reiterated his support for BIG. When Suplicy asked what Friedman thought of basic income as an alternative to the NIT, Friedman responded, “A basic or citizen’s income is not an alternative to a negative income tax. It is simply another way to introduce a negative income tax.”
A quick web search will produce thousands of articles on Friedman. For a broad view of his career and contributions, see Samuel Brittan in the Financial Times: https://www.ft.com/cms/s/cb74eef8-7599-11db-aea1-0000779e2340.html
ANTONIO MARIA DA SILVEIRA
Antonio Maria da Silveira, professor of economics at Universidade Federal do Rio de Janeiro, died on November 21. According to his long-time friend, Eduardo Suplicy, “Antonio Maria was the first Brazilian economist who proposed the institution of a guaranteed minimum income program through a negative income tax. It was in the article Redistribuição de Renda (Redistribution of Income), published in Revista Brasileira de Economia, in April 1975.” Drawing inspiration from Economists as diverse as J. M. Keyns and F. A. Hayek, Antonio Maria argued that it would soon become feasible for the government to secure a decent living for everyone. Suplicy credits him with being a consistent voice in favor of a basic income guarantee right through the passage of a bill to gradually phase in a basic income in Brazil. Suplicy’s tribute to Antonio Maria da Silveira is in the December issue of the BIEN NewsFlash (www.basicincome.org).
RICHARD CLEMENTS
Richard Clements, former director of the Citizens Income Trust (CIT), died November 23, 2006. According to the CIT, “The Citizen’s Income Trust has been sorry to hear of the death of Richard Clements. After being editor of Tribune and running Neil Kinnock’s office, Richard was Director of the Citizen’s Income Trust from 1993 to 1996, when sadly he had to retire because of his own ill health and to look after his wife Bridget. He was a most effective Director, and we were very sorry when he had to leave. Not surprisingly, he was particularly good at raising the profile of the Citizen’s Income debate in the press.” Clements was also a campaigner against nuclear weapons and editor of the British left-wing newspaper, the Tribune. The British newspaper the Guardian article on Clements is on the web at: https://www.guardian.co.uk/obituaries/story/0,,1955580,00.html.
LEONDARD GREENE
Can you imagine a better way to make a fortune than to invent a product that saves lives? Can you imagine a better thing to do with a fortune than use to fight poverty and disease? Leonard Greene made his fortune inventing safety products for airplanes. His stall warning device (a safety feature that is now standard equipment on commercial aircraft) has saved an uncountable number of lives. After Greene was a well established business owner with dozens of patents and a multimillion-dollar business to his credit, he founded the Institute for SocioEconomic Studies, which funded research on healthcare policy and on the Basic Income Guarantee. Greene wrote two books on the Basic Income Guarantee, Free Enterprise Without Poverty
and The National Tax Rebate. Greene’s BIG idea was simple: What if they United States replaced everything it is now doing to maintain someone’s income and replaced it with a basic income in the form of a tax credit or tax rebate? Greene found that the revenue currently devoted to tax deductions, welfare policies, farm subsidies, and many other programs could be redirected to a basic income large enough to virtually eliminate poverty in the United States. His ideas have not caught on with mainstream politicians, but they have continuing appeal. His idea for redirecting all U.S. income support spending into a basic income has been virtually reinvented by Charles Murray in his latest book, In Our Hands, and the idea of BIG in the form of a tax credit is very much the idea behind the BIG bill submitted in the 109th Congress by Representative Robert Filner. He is survived by eight children. He son, Donald Greene died in United Flight 93 on September 11, 2001. Leonard Greene died November 30, 2006 at the age of 88.
EDITORIAL NOTE
When I volunteered to write the USBIG Newsletter in 2000, I did no realize how many obituaries I would have to write. It is a particularly sad duty that I have never quite gotten used to. Friedman’s death, following Herbert Simon in 2001, James Tobin in 2002, John Kenneth Galbraith early this year, marks the end of an era when the great economists who seemed to disagree on everything else, all seemed united behind the guaranteed income as the best way to reform anti-poverty policy. Friedman was first among these because of long-term efforts to popularize the idea. Although Friedman considered himself a liberal (or libertarian) who believed freedom was the overriding value that should guide policy and who believed that freedom conflicted with egalitarianism and economic equality, he had something to teach egalitarians. His logic (if you really want to help the poor, give them money and let them decide how to use it) leads me inevitably to the belief that unconditional assistance, in the form of some kind of basic income guarantee, must be the centerpiece of any truly egalitarian program. It has also made me suspicious of anyone who calls himself egalitarian but advocates conditional assistance to the poor. There can’t be egalitarianism without respect for the poor, and how can we say we respect the poor if we advocate policies designed to promote “equality but…”? For example, I support equality but only for the truly needed. I support equality but
only if they are willing to work. I support equality butnot one of them is going to get their hands on one red cent of my tax dollars if they’ve ever refused a job. I can’t help but be suspicious. I can’t help but come back that that idea, if you really care about the poor, if you really want to help them, you will give them money unconditionally, with no supervision, without asking for anything in return. Sometimes it takes a libertarian spot a true egalitarian.
-Karl Widerquist, New Orleans, LA, December 20
by Tyler Prochazka | Feb 21, 2018 | Opinion
As income inequality continues to soar in the US and around the world, progressives are in a heated debate as to what the most effective policy may be to address growing precariousness.
My recent article reflected a left-leaning criticism from Philip Harvey of Universal Basic Income (UBI) as unaffordable from a political standpoint, and counterproductive in advancing politically feasible solutions such as a job guarantee.
There has been much research done on the subject of basic income’s cost. Karl Widerquist has become a prominent voice on this subject, arguing that the net cost is the true cost that should be considered.
In reaction to my interview with Harvey, Widerquist said the arguments about UBI’s cost were misleading, and in reality UBI is far more inexpensive than simplistic calculations let on.
“If the government gives a dollar and takes a dollar from the same people at the same time, it doesn’t cost anyone anything. According to my analysis, UBI can eliminate poverty by putting $539 billion in the pockets of low-income people after they’d paid their taxes and received their UBI. The only meaningful cost of that UBI is higher-income people have to make do with $539 billion less in their pockets after they’ve paid their taxes and received their UBI,” Widerquist said.
In “Financing Basic Income: Addressing the Cost Objection,” a book edited by Richard Pereira, also argues that the actual cost of basic income is largely overstated. Pereira told me that basic income can create a surplus to lower taxation burdens elsewhere.
“The demogrant is similar, with a seemingly much larger cost upfront. I say ‘seemingly’ because as some major studies that I reference explain, the demogrant can be “calibrated” to achieve the same result/cost as the NIT,” Pereira said.
The book persuasively addresses the critics that say UBI is too expensive. Other savings noted by Pereira’s book, such as those from reduced crime and improved health due to UBI, are important in the calculation of basic income’s net surplus. However, these topics deserve a separate consideration.
One area basic income advocates need to emphasize more is this clawback of basic income. As basic income pushes up an individual’s income, it subjects a person to paying back a portion of their UBI under the current income tax system, as Pereira’s book notes. Moreover, many individuals relieved from poverty due to UBI will no longer qualify for other welfare benefits.
As such, the actual long-term tax rates needed in a world with UBI is probably substantially lower than what the gross cost would suggest, because the government will start receiving a portion of everyone’s basic income back to use for the following year’s UBI.
A benefit of the Negative Income Tax (NIT) is that the gross cost and net cost are the same, because they immediately clawback the NIT credit in one’s taxes. This tax is politically superior to UBI’s indirect clawback through other taxes. However, a monthly UBI paid upfront to all in the same amount is still desirable to NIT because it ensures that everyone receives the funds, especially in the event an individual experiences a financial emergency and does not have the time or ability to apply for assistance.
Basic income advocates can learn from the payback scheme in the Affordable Care Act and combine the UBI proposal with a phase-out in the Negative Income Tax (NIT).
A helpful analogue is the ACA’s clawback of insurance subsidies. An individual can receive healthcare subsidies based on the previous year’s income tax, but pay back some or all of the subsidy through their income tax if they make more the following year. This lowers the amount that the government has to tax for the following year to pay for new subsidies.
The basic income could be paid upfront in the same amount to each individual on a monthly basis. However, the clawback from high-income earners should be more explicit, with a NIT type phase-out based on annual income taxes for high earners.
Perhaps 50 cents could be paid back on each dollar earned above $50,000. The rest of the clawback (and net funding for low-income basic incomes) can occur in indirect ways, such as through carbon taxes or financial transaction taxes.
Having high-income earners pay back their UBI through the income tax means that other taxes will not have to be raised as significantly. It may be helpful in the political realm to with this built in clawback because it is easier to understand.
At the end of the day, a UBI is likely the most effective way to end global precariousness. It’s time to get down to the specifics of how we make a UBI above the poverty line politically possible.
“There is no benefit to working people to being under the constant threat of poverty, homelessness, and destitution, if they have refuse or find themselves unable to take orders given to them by more privileged people. We need to build an economy based on positive incentives, not threats. A generous UBI can do that. A job guarantee cannot,” Widerquist said.
by BIKN Korea | Feb 15, 2018 | Opinion
South Korea’s government included an expenditure to design potential models for a basic income experiment into the budget for 2018. It shows that government and politicians in South Korea have started to consider basic income as a significant and unavoidable policy.
Against this backdrop, BIKN held a conference under the title of “Why we need a basic income experiment: The necessity of BI and significance of a BI experiment” on Jan. 23, 2017, which was co-sponsored by the Democratization of Economy Forum of the National Assembly.
Four speakers came to propose potential basic income models for Korea and to make a critical evaluation of the experiments that have already been carried out or will soon begin in other countries or regions.
Professor Seo (Gunsan National University) said the existing social security system is based on an employment-contract relation, revealing the limitations of highlighting the qualitative change of work into “flexible” employment. We need to form new strategies to face the current situation and we constructed three possible options.
The first strategy is an expansion strategy that seeks to expand the legal nature of employees considering their actual conditions. The second is to shift the basis of social insurances from employment-based social insurances to income-based ones. Finally, we could consider the basic income strategy. Professor Seo said that the first strategy, a kind of legal approach, has two drawbacks which does not keep up with the actual changes in the economy and is subject to many blind spots. Although, such a strategy could be helpful in the short-term. The second strategy is limited because it is still based on labor-related income. So she maintained that the basic income strategy is the most effective in the “workless” future.
Professor Baek (Catholic University), stood upon the same understanding of the current situation as Professor Seo. Seo brought attention to the transition to a welfare state centered on basic income in his presentation, “Precarious Work and Basic Income for Young People.” In the first he suggested the ideal method of transition is comprised of eight stages: 1) rational adjustment of the existing social security system; 2) implementation of new categories of social assistance programs such as unemployment allowance; 3) strengthening social allowances for children, the elderly, and people with disabilities; 4) introduction of a social benefit for young people; 5) implementation of participation income; 6) expansion of the coverage of age groups in age-related categorical allowances; 7) introduction of a low-level basic income which integrates a few social allowances; 8) implementing a full basic income. For this, he maintained that the most useful and effective method is to introduce a basic income for young people first, after he highlighted the insecurity of young people in Korea (unstable employment, low wages and exclusion from social insurances).
Dr. Park (Chungnam Institute) proposed a Farmer’s Basic Income or Rural Residents’ BI in “Requirement of Farmer’s (Rural Residents) BI and Introduction Plan.” His starting point is that the income of farmer’s household has steadily decreased, and the existing subsidy has a serious drawback. In 2016, the average earning of a farmer’s household is 63.5 percent of an urban worker’s one, which has undermined the foundation of agriculture. And the subsidy is paid in proportion to the arable acreage, which causes disadvantages to petty farmers. In fact, the total size of the subsidy is too small. Dr. Park proposed the Farmer’s BI or Rural Residents’ BI to enhance the public value of agriculture and to secure the income of a farmer’s household.
Professor You (Australian National University) proposed the principles and direction that should be the basis of a BI experiment in Korea, while examining the basic income experiments or similar ones carried out across the world. He found that the experiments could be a foundation for discussing implementation of BI, even though they have limitations. He proposed that we need to make comprehensive and long-term design for a BI experiment to whatever extent possible. To produce such a design, two features would be required: close cooperation with government and a wide range of expert participation.
The South Korea government will post the program to design BI experiments to which BIKN will apply with other academics and experts. It will be an opportunity to spread the legitimation and necessity of BI widely, even if BI is not implemented in a short timeframe in Korea.
Hyosang Ahn, Executive Director of BIKN
Edited by: Tyler Prochazka
