heron61: (Emphasis and strong feeling)
heron61 ([personal profile] heron61) wrote2017-02-22 06:24 pm

Musings On Basic Income

There are a number of excellent arguments against basic income including this one from the UK, and there's the simple fact that if you want a solid social safety net, paying everyone, including the majority of the society who don't need it isn't necessarily the most efficient or effective method. I thought a lot about basic income a couple of years ago, and after considering these arguments decided it might not be the best course of action. However recently considered one counter-argument that (to me at least) makes all of these objections irrelevant – resentment.

The politics of bitter, hate-filled resentment is much of the reason the US and the UK are both now having considerable problems, and much of Western Europe may be headed in the same direction. It's more difficult for me to talk about anywhere else, but in the US at least, the data is clear, the rise of President Puppet wasn't due to economic deprivation, it was due to the fact that white bigots felt that other people (immigrants, people of color, urbanites, and in fact anyone who isn't a white bigot) were doing better than before (despite that fact that many of them still weren't doing as well as the white bigots), while the white bigots were mostly doing about the same, and they (the white bigots) were both jealous and afraid they'd lose out. This resentment (fueled by President Puppet and his white supremacist traveling show) motivated them to get out and vote. Until we manage to improve humanity in some global way (better education is a good start, and breaking any sort of moral link between money and human worth would be an equally good one), these sorts of resentment will continue to exist. As a result, it's far too easy for people who aren't benefiting from social safety net programs to vote to cut them. Also, one of the continuing problems with all social welfare programs is that the ultra-rich (who mostly loathe paying taxes) spend money on propaganda campaigns aimed at fueling working class resentment against social safety net programs for people poorer than them, using the time-honored tactic of "How about you and them fight".

Basic income utterly defangs all that. Sure, many 1%ers and 0.1%ers who would need to pay notably higher taxes to make this work care more about the taxes they lose than the $10,000/year they gain, but in addition to vastly helping out someone who makes $5-10,000 year, an extra $10,000 is going to be pretty noticeably to someone who makes $40,000 year. As a result, any vote to decrease basic income is a vote to get less money yourself, and that's simply something that most people aren't willing to do. Thus, I've again changed my mind and am strongly for the idea of basic income.

[personal profile] alephnul 2017-02-23 09:53 am (UTC)(link)
I played around with a federal tax revenue estimator recently, and what I found was that a $10k basic income could be balanced by raising the tax rate to around 50% across the board (above $20k), with a higher rate at $250k and higher still at $1 million. The $10k basic income balanced out with the tax increase at about $80k (so below $80k, everyone had more money than currently, and above about $140k, everyone had noticeably less money than currently). The estimator didn't allow tax rates above 75%, but taxing the 0.1% that last 25% more wouldn't raise that much more income. So a $10k UBI is (just barely) doable, and it certainly would make a huge improvement in the lives of poor and working class people in the US. My estimate was based on leaving all existing social welfare programs in place, as the work supplement of the EITC would help bring working poor people even further out of poverty and medicaid is obviously not replaced by $10k in cash for people who actually need medicaid. Arguably, you could replace food stamps and some other benefits with a tiny increase in the UBI, but targeted food security programs would still be a good thing for people at marginal incomes, even with an extra $10k.

However, I'm unconvinced it would solve the resentment problem. A large part of the resentment class seems to be the $50-100k range, and they would either benefit only a little from the UBI or would be harmed by the necessary new taxes. Even if they weren't harmed by it, their aspirational income class of $150-$250k (the "once my business really gets going..." range) would definitely be noticeably harmed by the UBI taxes, so their fantasies of being better off would be being crushed so that 'those people' could laze about living it up on free money. That would be easy bait for resentment propaganda!

[identity profile] mindstalk.livejournal.com 2017-02-24 01:13 am (UTC)(link)
I'm skeptical of the macro effects of full basic income, and I also think the resentment argument undercuts BI. Voters are reluctant to pay for public servants doing useful work, let alone the "deserving" poor; I don't see them voting to pay able people to not work at all.

An "extra" $10,000 per person is redistributing 20% of US GDP. That's a lot, and will take high taxes, and someone making $40,000 almost certainly won't be getting $10,000 after clawback, and might even be negative (relative to no BI and lower taxes.)

[identity profile] xuenay.livejournal.com 2017-02-26 02:12 pm (UTC)(link)
People keep talking about how much it would cost to pay everyone a basic income's worth of extra, but in the basic income proposals that I've seen, it doesn't work that way. Rather, taxes are adjusted so that if you earn so much that you wouldn't qualify for social security benefits in the pre-BI system, there's a bit of extra tax that effectively taxes your added income away. (Of course, to avoid welfare traps, the tax increases gradually rather than suddenly, so as to ensure that working always remains profitable.) As a result, the basic income scheme becomes approximately cost neutral.
Edited 2017-02-26 14:13 (UTC)