Switzerland is debating a program to pay every citizen:
Charles Murphy, an American conservative, has expressed support for the idea, and even wrote a book about it.
Obviously, it’d be expensive. Though, there’d be some savings attached as well. It’d replace social programs for the poor: WIC, HUD, etc.
Good idea or bad?
Also, what would you do, with an extra $10,000 a year?
Seems kind of pointless. On the one hand, you’re sending a bunch of checks to people that don’t need it (and since the money ultimately comes out of their taxes, for many it’s basically just a complicated way of implementing a standard tax deductions).
On the other hand, Murry’s scheme, since it only goes to adults, is probably not really going to be able to actually replace HUD, WIC and medicaid for single parents with children (the Swiss scheme makes more sense, since it seems children get their own checks).
How would we pay for it? Not saying it’s impossible, but I’d like ot know what the tradeoffs are.
I’m also not convinced that denying it to ex-cons would be a good idea (if that’s his proposal-I can’t quite tell). My preference would be that, once someone has served a prison sentenc,e we do everything we can to get them reintegrated into society. Singling out the folks with poorest impulse control for specific poverty doesn’t seem like wise public policy to me.
It sounds like an inferior version of the negative income tax (which I do support) to me. As Simplicio noted, what’s the point in taxing the wealthy, then cutting them a check for $10,000? Just tax them less, or have the program be limited to those under a certain income, like an NIT. NITs with a subsidy rate also ameliorate the disincentive to work, because (with a rate of 50%) for every dollar in additional wage income a person earned, they’d only be losing 50 cents of NIT payment.
Perhaps he meant denying it to people who were actually in jail, and not ex-cons.
Denying it to folks in jail seems fine. And if I understand the idea of a negative income tax, I do like that idea better. I figure we do far too little wealth redistribution in our country, out of a mistaken notion that private property is the default, natural way of apportioning material goods.
We do a lot of it, but it’s via an inefficient, dog’s-breakfast collage of state and federal programs (Social Security/SSI/SSDI, Medicare, Medicaid, SNAP, TANF, Section 8, WIC, Head Start, FSEOC, the ACA, etc, etc), which means actually taking advantage of the redistribution entails jumping through all sorts of hoops and dealing with multiple bureaucracies and aid workers, which the people in need of these benefits aren’t always equipped to do. An NIT removes this burden, and avoids the problem of people being disincentized to work (or work more) when it can mean losing benefits (another flaw of having so many programs, they have different income levels and such for qualification).
An NIT, with a 50% subsidy rate, and adjustable based on local cost-of-living and family size, would solve a lot of problems.
Do people still put money into Social Security pensions?
Would this policy necessitate stricter requirements for citizenship?
I like the idea. I’m sure there are downsides, but it seems like it would be better than the system we have now.
So, my back of the envelop calculation would be 317,000,000 Americans, less kids under 21 (I don’t have a good figure on this, but maybe around 30%)…that’s around 220,000,000 Americans…less those in jail (again, no idea, but probably only a few million at most so shouldn’t make that much a difference)…say 215,000,000 Americans who would get $10,000 a year. Or around $2,150,000,000,000…touch more than $2 trillion a year then, unless I dropped a decimal point somewhere. The current US budget for 2013 seems to be a bit under $4 trillion, so this would at more than 50% to it. I suppose there would be some savings if we cut out all of those other programs, but doesn’t seem like a very good idea on the face of it to me.
If I am in arrears on my child support, do I still get my $10,000? How about if I want to declare bankruptcy? Can I be forced to use it to pay off my student loans? How about other bad debts, or legal judgments against me? Does it work like the [del]penalty[/del] tax under Obamacare, where they withhold your tax refund if you don’t buy health insurance?
Actually, this is partially a moot point, since my taxes are going to go up enough to eat away a non-trivial amount of $10K a year. Or else we can pretend that it will all come out of someone else’s pocket, and start spending the money.
But it won’t be easy to keep pretending.
Regards,
Shodan
Isn’t this just a backwards way of lowering taxes and making the tax rate less progressive?
Unless we also pretend we really would be getting rid of all those other programs (fat chance IMHO) then it’s not going to be lowering taxes any way you look at it. We’d be adding trillions to the annual budget, and that money has to come from somewhere. Guess where?
21 with a pulse - that’s about 220M plus minus a few. Multiply by $10K - that’s $2.2T. US federal budget is $3.5T. So - unless the “some savings” are quite substantial (they aren’t), your scheme would necessitate increasing US budget by 60% or so.
See discussion on this exact plan here A proposed "welfare" scheme (from another thread) - Great Debates - Straight Dope Message Board
I’m pretty sure in Murry’s case, it is (and that that’s the point). On net, you’d end up taking money away from programs that serve poor families with children, and using it to send checks to the middle and upper class (effectively, a 10k tax rebate).
In the Swiss case, where people get checks for their children, and the program isn’t meant to replace all support for the poor, I think the appeal is that instead of a fairly complex, intrusive system of welfare programs to help the poor, basically just cutting everyone a check is more efficient. There’s much less need for overhead to monitor whose using what program, and there’s a lot of reason to believe that people know how to spend money to help themselves in their own lives better then gov’t mandates do.
I can see the appeal of that system, but I think you’d end up having to carve out so many exceptions and caveats, that in the end, you’d end up with something more or less like you started with.
For example: people whose only income is a 10k check every year are unlikely to try and spend that money on health insurance, and instead just take their chances and hope if they get sick hospitals will have to treat them anyways. Of course, both Switzarland and the US mandate people buy health insurance, so this isn’t a problem. But since we mandate they buy health insurance, people aren’t really free to spend their check as they’d choose. I think in the real world, Switzarland will end up with a lot of that sort of thing, obviating the original point behind the program.
I’m fairly new here but surely Basic Income Guarantees have been debated before, haven’t they? The idea makes a lot of heads explode, both on the left (deprives the gubmint of much of its social engineering power) and on the right (for obvious reasons), but there are advocates as well. I know a fellow on another message board who is going to cream himself when I send him the link about Switzerland.
Actually, am on the right and it doesn’t make my head 'splode. Is I said on the other thread - I like the idea in principle (as long as it gets rid of all other welfare programs of course), but it just doesn’t compute, financially. Costs too much, even after eliminating all other welfare.
I’d be in the class of people whose taxes were raised to pay for the scheme. I think the basic idea is sound, though. In general, to the extent that I support any kind of wealth redistribution, I support schemes that have minimal qualifications to entry. And to the extent that qualifications are necessary, I support concentrating them into a minimal number of areas (i.e, just the tax code).
So I like this idea, depending on the implementation, because I think it’s better to have a single no-qualification social support program and tweak the tax rate to account for it, as compared to having many social programs with complicated qualifications as well as a complicated tax structure. The current setup just has too many weird incentives for not working past a certain point, and all of that is due to the sharp cutoffs that so many programs have.
Obviously, taxes will go up for most people to pay for the program. It would have to be revenue-neutral to have a chance at succeeding. My worry, even if it were implemented, is that it wouldn’t be long before someone thought the system needed patching for some reason or another, and that sooner or later we’d just end up back at square one with a massive mishmash of programs.
nevermind, beaten to the math
I really like the idea of getting rid of unnecessary labor in the form of oversight, but I also worry that the program is too expensive. The economy would actually increase because many of the laid off employees would be able to work at other, more productive jobs. And if they can’t, they could just go on the dole and we’d be none the worse for wear.
I also like the lack of disincentives to work harder, but I also think that some people, but not all, would conversely be willing or able to get by on just $10K without working. With that not being a moral judgement but an economic one because the people who decide to do this would have a drag on the economy. I, for instance, would almost be tempted to just quit and live on my savings plus the $10k. The deciding factor would be that the government would most likely have to reduce social security payments in order to afford this.
I think a good number of people would decide not to work. But that doesn’t necessarily mean they’d veg out in front of television sets and become burdens on society. I could see a lot of people taking a stab at small businesses or creative endeavors (art). Other people may devote themselves to volunteer work or go to school. And maybe wages would go up to compensate for the reduced demand for jobs.
You’d still have a market for consumer goods. People are still going to want the latest gadget or doodad, and $10,000 isn’t enough to support someone’s “gimme” habit. And there will still be enough class anxiety to motivate people to avoid being at the bottom. It’s just that the bottom is a trashy apartment building instead of an alley.
Putting aside the cost, for second, I’m not sure it’d be much of a disincentive to work. It’d be, at best, just scraping by. Most people want more than that. And some of the people who quit working might go onto do other things, that don’t pay anything. Music, or art, start-ups companies, writing projects, or going back to school. In any case, there are millions of people looking for jobs, so even if some people quit working, or stopped looking, there would still plenty of people out there to take up the slack.
As I understand it, many of the social programs out there are a expensive to maintain as the benefits they provide, if not more so. On the face of it, that seems inefficient. And some people who do qualify, or would qualify for them don’t participate, for whatever reason. They don’t know they exist, or don’t know how to qualify, or get caught in some sort of bureaucratic catch-22.
So I guess I’d support what Monstro and Human Action said.
As far as paying for it, some kind of combination of reducing military spending, ending involvement in foreign wars, eliminating other social programs, higher taxes on the the rich, increasing deficits, and perhaps excluding those who’re already getting Social Security might do the trick.
We’ve spent trillions invading and ocupying other people’s people’s countries without breaking the bank. This would pay much greater dividends, I think, and would probably improve the economy, as well.