The basic income (previously called social dividend and citizen's dividend) ensures all citizens or residents of the United States regularly receive an unconditional sum of money (40% of the Median Income) in addition to any income received from employment, investments and elsewhere.
Similar proposals for "capital grants provided at the age of majority" date to Thomas Paine's Agrarian Justice of 1795, there paired with asset-based egalitarianism. The phrase "social dividend" was commonly used as a synonym for basic income in the English-speaking world before 1986, after which the phrase "basic income" gained widespread currency.
Prominent advocates of the Basic Income
|Robert Reich||Dan Savage||Elon Musk|
|Erik Olin Wright||Marshall Brain||Charles Murray|
|Carole Pateman and Ann Withorn||Moshe Vardi||Bill Gross|
|Scott Santens||Jerry Taylor||Robin Chase|
|Michael Howard||Rob Nail||Michael Tanner|
|Albert Wegner||Peter Barnes||Andy Stern|
|Tim Draper||Jeremy Howard||Hugh Segal|
|Roy Bahat||Gwynne Dyer||Jim Mulvale|
|Sam Altman||Ryan Holmes||Paul VallÃ©e|
|Guy Caron||Naheed Nenshi||Don Iveson|
- Administrative efficiency
- Poverty reduction
- Basic income and growth
- Work incentives
- Right-wing views
Basic income, it is argued, is a much simpler and more transparent welfare system than the one existing in the United States today. Instead of having numerous welfare programs, the economic safety net would simply be one universal unconditional income.
Administrative efficiency (Top)
The lack of means testing or similar administration would allow for some saving on social welfare, which could be put towards the grant. The Basic Income Earth Network (BIEN) describes one of the benefits of a basic income as having a lower overall cost than that of the current means-tested social welfare benefits, and they have put forth financially viable proposals for the implementation.
Poverty reduction (Top)
Basic income is often argued for by its advocates because of its potential to reduce poverty, or even eradicate poverty.
Basic income and growth (Top)
Basic income and growth (or BIG) allows for potential economic growth: people may decide to invest in themselves to earn higher degrees and get interesting and well-paid jobs that, in turn, would trigger growth.
Supporters commonly make three very different arguments that basic income promotes freedom:
First, although most basic income supporters tend to be politically left, right-leaning supporters, at least since the 1970s, have argued that policies like basic income free welfare recipients from the paternalistic oversight of conditional welfare-state policies.
Second, Philippe Van Parijs has argued that basic income at the highest sustainable level is needed to support real freedom, or - the freedom to do whatever one "might want to do." By this, Van Parijs means that all people should be free to use the resources of the Earth and the "external assets" people make out of them to do whatever they might want to do. Money is like an access ticket to use those resources, and so to make people equally free to do what they might want to do with the external assets of the world, the government should give each individual as many such access tickets as possibleâ€”that is, the highest sustainable basic income.
Third, at least since Thomas Paine, some supporters have argued that basic income is needed to protect the power to say no, which these supporters argue is essential to an individual's status as a free person. In America today, an affluent few control the resources necessary to every individual's survival. No individual has any reasonable choice other than to do whatever this small resource-controlling group demands. Before the establishment of corporations and landlords, individuals had direct access to the resources they needed to survive. But today, resources necessary to the production of food, shelter, and clothing have been privatized in such a way that only a few citizens have gotten a share while most everyone else goes without. Therefore, the controllers of America's resources owe compensation back to every citizen, sufficient at least for every citizen to purchase the resources or goods necessary to sustain their basic needs. This redistribution must be unconditional because citizens can only consider themselves free if they are not forced to spend all their time doing the bidding of someone else simply to provide basic necessities to themselves and their families. Personal, political, and religious freedom have no value without the citizen's power to say â€“ NO. A basic income provides an economic freedom, which â€” combined with political freedom, freedom of belief, and personal freedom â€” establishes each individual's status as a free person.
Work incentives (Top)
There is also a belief among critics that if people have free and unconditional money, they will not work because people are fundamentally lazy. Less work means less tax revenue and hence less money for the state and cities to fund public projects. There are also concerns that some people will spend their basic income on alcohol and drugs.
If there is a disincentive to employment because of basic income, it is however expected that the magnitude of such a disincentive would depend on how generous the basic income were to be. Some campaigners in Switzerland have suggested a level that would only just be livable, arguing that people would want to supplement it.
Tim Worstall, a writer and blogger, has argued that traditional welfare schemes create a disincentive to work, because such schemes typically cause people to lose benefits at around the same rate that their income rises (a form of welfare trap where the marginal tax rate is 100 percent). He has asserted that this particular disincentive is not a property shared by basic income, as the rate of increase is positive at all incomes.
In one study, even when the benefits are not permanent, the hours worked by the recipients of the benefit are observed to decline by 5 percent, a decrease of two hours in a typical 40-hour work week:
While experiments have been conducted in the United States and Canada, those participating knew that their benefits were not permanent and, consequently, they were not likely to change their behavior as much or in the same manner had the Guaranteed Annual Income been ongoing. As a result, total hours worked fell by about five percent on average. The work reduction was largest for second earners in two-earner households and weakest for the main earner. The Basic Income would allow parents to focus on raising their families, a virtue often advocated by social conservatives.
Studies of the Mincome experiment in rural Dauphin, Manitoba, in the 1970s, demonstrated the only two groups who worked significantly less were new mothers and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling. Under Mincome, "the reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women."
Another study that contradicted such decline in work incentive was a pilot project implemented in 2008 and 2009 in the Namibian village of Omitara; the assessment of the project after its conclusion found that economic activity actually increased, particularly through the launch of small businesses, and reinforcement of the local market by increasing households' buying power. When citizens, who would normally live in poverty, are given a basic income, they are oftentimes inspired to use a part of that resource in an entrepreneurial venture that would provide them with greater economic security.
The affordability of a basic income proposal relies on many factors such as the costs of any public services it replaces, tax increases required, and less tangible auxiliary effects on government revenue and/or spending (for example a successful basic income scheme may reduce crime, thereby reducing required expenditure on policing and justice.)
The case for basic income affordability can be summarized this way:
Welfare substitution: Basic income would substitute to a wide range of existing social welfare programs, tax rebates, state subsidies and work activation spending. All those budgets (including administrative costs) would be reallocated to finance basic income.
Auto-financing of basic income: although basic income is paid to everyone universally, most people whose earnings are above the median income are in fact net contributors to the basic income scheme, mainly through an income tax. In practice this means that the net cost of basic income is much lower than the raw cost calculated as a sum of monthly payments to the whole population.
More fiscal redistribution: in addition to reforming and optimizing the existing tax systems, additional taxation can be implemented to fully finance a basic income scheme. Some proposals frequently mention to this effect - the need for a tax on capital, carbon tax, financial transaction tax etc. which do not currently exist in most jurisdictions.
Money creation: In addition to tax reforms, the power of central banks to create money could be used as one funding channel for basic income.
Right-wing views (Top)
Support for basic income has been expressed by several people associated with right-wing political views. While adherents of such views generally favor minimization or abolition of the public provision of welfare services, some have cited basic income as a viable strategy to reduce the amount of bureaucratic administration that is prevalent in America's state welfare systems. Others have contended that it could also act as a form of compensation for fiat currency inflation.