Universal Basic Income
When economists or entrepreneurs use their jargon, some people may get confused on what idea is trying to conveyed. By breaking down the words one can see that a Universal Basic Income(UBI) is a direct cash payment that is meant to provide the basic needs for all citizens. Nobody can enforce what a person spends their UBI money on, but the intention is to support the welfare of impoverished people either in combination with other welfare programs or on it's own.
From a presentation given to the Free Enterprise Society at Oklahoma State University, Dr. Trost proposed a program would replace other social initiatives. His claim is that it would be supported by libertarians, conservatives, progressives, and communists, but not socialists. This is one of the toughest parts of policy making - getting people to agree with you. Below I will explain each point of view and how they could find common ground under this type of plan, however I first must reveal the details of the plan itself.
The Plan
Similar to how the Alaskan Permanent Fund pays out a sum to Alaskan residents from the revenue of oil, this plan would pay out to American citizens from our GDP revenue. To be clear, this plan only pertains to US citizens. We would be under a flat tax of 25% where 16% goes to the UBI fund and 9% funds the federal government. People, even those below the age of 18, will be given $9,000 annually. By looking at the math, a person would essentially "tax neutral" if they make $36,000 a year because they would pay the same amount of tax as they would be receiving from UBI. A household of 4 would get $36,000. Retirement age individuals would be given a 150% premium which equates to $46,000 for an elderly couple. The intent is to shift the tax burden upward and stimulate new business.
Libertarianism
Liberty is a core principle of this ideology along with desires to maximize autonomy and political freedom. They often emphasize free and voluntary association, freedom of choice, and individualism.
I can definitely see how a UBI would promote freedom of association and choice because this program would increase mobility between states. With increase in mobility follows an increase in competition, and this is one of the basic principles upon which entrepreneurship flourishes.
Conservatism
Conservatives typically prioritizes American traditions, republicanism, and limited federal government. They preserve traditional social institutions like religion, parliamentary government, and property rights. This plan is based upon the premise of limiting the federal government, so some conservatives would support this. I believe it is tough to get republicans on board to support plans of redistribution of wealth even though replacing our current social welfare would attract many voters.
Progressivism
Progressives want to represent the interest of ordinary people through political change and support of government action and this plan would support the "average" American more than any other social class. As mentioned by Dr. Trost, it is difficult to put this into motion because the federal government would not want to willing give up it's power. He suggests getting the individual states on board and to threaten a constitutional convention.
Communism
A definition of communism is wanting socioeconomic order structured on the idea of common ownership over the means of production and elimination of social classes, money, and government. Although there is not a complete elimination of the entities mentioned, this plan makes strides for each of them.
Socialism
Socialism seeks government ownership and control over means of production. It confuses me how Trost can suggest that the plan will incorporate communist ideals without socialism because communism is an end goal which is achieved through socialist programs.
Economic Evaluation
“Our freedom can be measured by the number of things we can walk away from” - Vernon Howard
This quote has a unique perspective. From research on Howard, I would call him a proponent of self-improvement but also a minimalist at heart. The way I would tweak his statement is that freedom can be measured by the things we can walk from, but also what we can to. This separates the idea of inherent freedom from opportune freedom. In regards to the Universal Basic Income, if there is an increase in opportunity, there is consequently an increase in freedom. Freedom is a universal attractant for everyone regardless of location, background, or beliefs.
Argument points
A few reasons why people disagree with UBI's are that it reinforce entitlement mentality, we cannot afford it, it creates a feeling of government dependence, it lessens incentive to work and eliminates work as a character-development activity among many others.
Many of these statements I find to be quite ridiculous. For example, a program like this would not decrease the incentive to work. A program will not change the mindset of workers, it will only respond the actions they take economically. Those that think the USA cannot afford it must not be aware that we are currently spending on other sectors like welfare, health care, or pensions to name a few.
Benefits
Areas where American society would be benefited are an increase of individual freedom, no more need to protect certain industries via obstructionist regulations/free trade agreements, more mobility, and more opportunities to create new business or earn a wage as a low skill worker. To some groups, the limit put upon the government is a great benefit, but the way in which it is accomplish is quite significant. The government is constitutionally limited in it's expansion of spending because the spending is dependent on economic growth. Theoretically, this could help thwart the impact of economic downturn while still realizing the affect of economic growth.
Summary
There are a few “non-negotiables” in regards to this plan for it to best accomplish it's goal. It is to be enacted by constitutional amendment. The UBI payments tied to a set percentage of the previous year's GDP (16%) and it is NOT geographically adjusted. A flat tax of all income will be set at 25% with no other federal taxing authority in action. All other welfare programs, personal and corporate, will be terminated. There will be no minimum wage restrictions. Lastly, there will be no pre-spending of the UBI money.
I believe that the specifications of this plan would result in more success than other plans that have been suggested. One recent UBI idea proposed by Andrew Yang was much less stringent and possibly more expensive. I like how Trost made correlations to different ideologies and how they would support his proposition. Yang, on the other hand, called his policy non-partisan and non-ideological. Building a basis for support is often the difference in the fruition or failure of things like this. In many ways, it is difficult to get people on board with a new fiscal policy, but with the increase in mobility, the possibility for economic growth, and the lessening of the poverty gap there is plausibility for the implementation of this in our lifetime.
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