Basic Income Is A Powerful Solution

We're born into a world where everything is owned, jobs don’t pay enough to cover the bills, and we’re told that guaranteeing a minimum standard of living is a handout. This is the design of the privileged to ensure they hold money and power while generational poverty abounds.

There is a better way.

Thomas Paine championed it in 1797. American economist Henry George proposed it in 1885 in a speech called “The Crime of Poverty.” Milton Friedman popularized a version of it in 1962. Richard Nixon explored implementing it. Martin Luther King Jr. supported it. 1,000 economists wrote to Congress, imploring them to enact it.

Great minds on both sides of the aisle have proposed versions of basic income throughout history. It isn’t partisan. It is practical.

Milton Friedman supported a Negative Income Tax, a system in which the government provides individuals with a stipend when their income falls below a certain threshold, and individuals pay tax when their income exceeds that amount.

The reason why Republican President Richard Nixon and Democratic progressives have found this idea equally promising is that it is a more effective and efficient way to ensure all citizens are guaranteed a minimum quality of life, while replacing the numerous flawed aid programs we have today.

How Would It Work

All American citizens aged 18 or older would be guaranteed $1,000 a month, for a total of $12,000 a year. For every $2 a person earns, their stipend is reduced by $1.

A citizen with no income would receive a stipend of $12,000. If they earned $6,000 in a year, they would have a stipend of $9,000 ($12,0000 - $3,000) for a total income of $15,000.

It is a system where no one ends up in a dire position with no way out, that rewards work with prosperity. Decades of test programs around the country have demonstrated the success of basic income programs. Their results are excellent and suggest that contrary to the idea that such a program would be too expensive, it may be the most cost-effective solution to many of America’s problems.

• Improves children’s lives

• Reduces crime

• Improves food and housing security

• Reduces poverty

• Increases education

• Increases employment

• Increases wages

• Improves health and medical care

We can do even better if we incorporate these ideas into Social Security, which is facing a shortfall that will cause a significant reduction in benefits within a decade if it isn’t addressed. Social Security also has an unusual design for a nation that prides itself on individual freedoms; the government dictates when we can retire. No matter how desperate our situation becomes or how much we’ve contributed to the system, we’re not allowed to collect benefits that we’ve paid for until the government deems us eligible. And they continue to push back the retirement age.

What if you want to take off the first year of your child’s life, or if you need a break after 20 years to recharge for a year before heading back to work? Why can’t you choose to reduce your work to part-time and collect a portion of your benefits without a penalty when you’re fifty-five? You’ve paid into the system. Why doesn’t it work for you?

Social Security For All

I propose a more flexible, merit-based system that can also cover major life events. The guaranteed minimum income(GMI) discussed above becomes Social Security For All(SSFA), and every adult citizen will have a Social Security multiplier.

The multiplier starts at a value of one, which guarantees an annual income of $12,000. Every year that you pay income tax, meaning you’ve earned enough money not to claim any of your GMI, you increase your multiplier by 0.1. After 10 years of paying income taxes, you would have a multiplier of two and a GMI of $24,000. After 40 years of paying income taxes, you would have a GMI of $60,000.

People with disabilities would have a higher multiplier based on their situation. Someone with a 100% disability may receive a 5x multiplier. This system can also be used for temporary life situations, such as a new parent receiving a 3x multiplier for up to a year.

If the nation is facing a teacher shortage or a military recruitment shortfall, SSFA can offer incentives to fill those positions. Those workers or military personnel could earn 0.15 instead of 0.1 on their SSFA multiplier for each year. When the shortage ends, the multiplier returns to normal, while those who earned the increased multiplier keep it, allowing the system to solve problems without creating a bloated tax regulation that ballooned federal income tax law to 75,000 pages.

What is great about SSFA, besides its efficiency, is that it guarantees that everyone has a floor that they don’t fall below, no matter what life throws at them, and that floor rises as they contribute to society. The floor is what moves, not the ceiling. If you’re earning $200,000 a year from your retirement investments, you’re not claiming the $60,000 SSFA because you don’t need it. You’re not putting more demand on a system working to keep everyone afloat. But the moment you face hardship, it is there waiting to support you.

That is why I don’t advocate for a Universal Basic Income, where everyone receives $12,000 every year, regardless of their circumstances. That is an inefficient system with a price tag that most people can’t stomach: $3.1 trillion in addition to the $6.8 trillion US budget.

The inefficiency comes from the fact that the only way to raise an additional $3 trillion is through income tax. This means that someone in the middle class would pay $12,000 more in taxes to receive a check from the government for $12,000. However, the money flowed through institutions and case handlers, all of which have a cost. By offering benefits that everyone can tap into when needed and earn a bonus for every year they don’t, we create a fair and effective system that is affordable to operate.

As for how to pay for SSFA? Take the taxes currently allocated to federal food and housing assistance programs and roll them into the Social Security payroll tax while removing the cap on payroll tax contributions.

A federal government that works for the people and reduces poverty, homelessness, and hunger is within reach. We just have to think about it a little differently than what we’re used to and have to overcome the misinformation spread about income programs. It is time to support the working class as much as we’ve supported billionaires and corporations.

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