When I've helped people do their income taxes, I've pointed to the total tax (Line 63 on this year's 1040) and said, "That's your price for being an American."
But what if taxes worked the other way? What if the IRS sent each of us money, just for being an American? Just for being human?
That's the idea of the guaranteed basic income. Newsweek published a useful article on the topic last month, an essay that got my crazy cousin Aaron and I wrassling about whether taxation is theft. Betsy Isaacson explains that writing every needy household a check, or even every household, could be cheaper than funding all of our current social assistance programs:
In 2012, the federal government spent $786 billion on Social Security and $94 billion on unemployment. Additionally, federal and state governments together spent $1 trillion on welfare of the food stamp variety. Adding those costs together, that's $1.88 trillion. This number shows no signs of falling—in fact, the number of people seeking social services each year is increasing, as is the rate of homelessness, and as the baby boomer generation ages, more and more will need the support of Social Security.
In switching over to a universal basic income, the books will not only stay balanced—they might even move into the black. According to the U.S. Census Bureau, there are 115,227,000 households in the U.S. Split $1.88 trillion among all these households and each one gets $16,315.62. In other words, if you turned the welfare system into a $15,000 basic income payment, you’d end up saving over $150 billion (or $1,315.62 per American household).
The basic proposal can be tweaked, of course, so that the system makes a bit more sense. Households making over $100,000 per year probably get by just fine on their own. Cut them out of the equation, and you would end up with a $20,000 basic income check for the remaining households, while still netting the government some nice savings [Betsy Isaacson, "How to Fix Poverty: Write Every Family a Basic Income Check," Newsweek, 2014.12.26].
But if you just hand people money, won't they sit around doing nothing, lose their edge, and become dependent on the government?
That's not what happened in Dauphin, Manitoba, during a trial of a basic income program in the 1970s. Dauphin is a Madison SD-sized town four and a half hours from Winnipeg, on the edge of the northern big-lake wilderness. From 1974 to 1979, the lefty-provincial government and the Canadian federal government shared costs to provide monthly checks to poor folks in Dauphin, guaranteeing them a minimum living wage. "Mincome," they called it. The program kept a thousand families above the poverty line.
Zi-Ann Lum details the program in this December 30, 2014, Huffington Post article. She finds research showing Mincome recipients stayed healthier:
In 2011, [University of Manitoba reseracher Dr. Evelyn] Forget released a paper distilling how Mincome affected people’s health using census data. She found overall hospitalization rates (for accidents, injuries, and mental health diagnoses) dropped in the group who received basic income supplements.
By giving a community’s poorest residents enough to lift their incomes above the poverty line, there was a measurable impact on the health care system [Zi-Ann Lum, "This City Eliminated Poverty, and Nearly Everyone Forgot About It," Huffington Post, 2014.12.30].
Dr. Forget (this is Canada: I'll bet it's pronounced for-ZHAY) also offers anecdotal evidence that Mincome's no-strings payments did not cause lazy dependency; they actually supported self-improvement and independence:
One woman called to say she remembered the Mincome project. In the early 1970s, she was a single mother raising two girls on welfare – then calledMothers’ Allowance. She said she had always been treated respectfully, but there was one thing case workers said that bothered her.
“She said she wanted to get some job training. They told her to go home and take care of her kids and they would take care of her,” explained Forget.
When the opportunity to transfer from Mothers’ Allowance to Mincome came along, the woman took it. With no restrictions on how she could spend the money she was given, she signed up for training and got a part-time job at the local library which eventually became a full-time career.
“So when I talked to her, she was incredibly proud of having modelled a different kind of life for her daughters,” Forget said. The retired librarian invited Forget to visit her home. Inside, she was shown pictures from her two girls’ graduations, mother beaming with pride [Lum, 2014.12.30].
Basic income wins support from some conservatives as well as liberals. Isaacson's numbers show basic income could save the government money. Lum's story shows that a basic income guaranteed by the government can lead to better health without the dependence you might expect.
Governor Dennis Daugaard proposes spending $1.1 billion on Social Services this year, another $92 million on Health, $199 million on Human Services. Suppose we took half of that money, $696 million, and simply wrote checks to every household in the state in poverty. Census says about 323,000 households, 14.1% poverty rate... that's about 45,500 households. Divide up that money—$15,300 per household for the year.
That one paragraph far oversimplifies the heavy policy lifting we'd have to do to determine what programs we could cut, what federal dollars require we keep, how we identify and track income in the recipient households... but hey! Manitoba did it in the 1970s, and they didn't have smartphones and laptops to take into the field. Anyone up for a serious statewide experiment in social welfare?