Wednesday, January 1, 2014

My New Year's Resolution: Push for a Univeral Minimum Income

Every time I look at the key issues of our time here in the U.S., I come away with the same conclusion: We can solve a lot of America's problems with a guaranteed income for every citizen, legal resident, and/or family unit.

I want to stress that the minimum income is the centerpiece of a basket of reforms, all working together. So let's list what I've got in mind:
  1. A minimum income, something along the lines of 140% of the poverty level, currently $16,086 for a single adult. The level would track the federal guidelines for members per family.
  2. An expansion of Social Security benefits, paid for by eliminating caps on the FICA deductions. The initial levels of benefits would rise, along with COLAs that better track the inflation that seniors experience.
  3. Expand Medicare, over time, until all U.S. citizens and legal residents are covered. This would be paid for through cost savings and an increase in the monthly Medicare tax withholding. Employees will be able to afford this higher Medicare tax level because of rising wages due to the elimination of work-based health-insurance costs.
  4. Eliminate all now-unnecessary local, state, and federal welfare programs, such as food stamps, SCHIP, WIC, Medicaid, the earned-income tax credit, healthcare tax credits, and so forth. All subsidies and welfare of any kind can be eliminated because a minimum income makes them redundant. For example, all community health clinics would need less local, state, and federal aid -- if any at all -- because they would be folded into and paid for by the Medicare system. The bureaucratic efficiencies of such an approach would be impressive, with impressive cost reductions.
  5. Make the federal income tax system more progressive, going back to, at minimum, Clinton-, even Reagan-Era levels.
  6. Increase fossil-fuel taxes, keeping them at point-of-sale collection so they're a bigger hit for inefficient vehicles, heating systems, or poorly insulated homes. Make low-carbon-footprint individuals, households, and businesses eligible for tax credits.
Peg the levels of these initiatives to the level of income equality: the higher the inequality, the higher the minimum income levels and the higher the marginal income-tax rates are on high earners. The goal is to raise the portion of productivity gains that labor receives versus what capital receives, since most of the wealth generated by productivity gains went to the wealthy over the last few decades. It's a fair source of revenue for offering a minimum income. Labor should have benefited from higher productivity through higher wages. Fact is, labor simply didn't. The wealthy kept it for themselves, causing the rising income inequality.

There you have it. The key objection would be that recipients would be lazy, finding no reason to better their circumstances because they no longer found themselves in abject destitution. To this I say hogwash. The vast majority of those existing just above the poverty level would want to better themselves for obvious reasons. They'd want to pursue higher levels of happiness and contentment, and they'd do this through traditional methods, such as more and better education and training.

Studies have borne this out. Also, a healthy society is a more productive society. the link has been demonstrated time and again. Poverty causes stress, disease, and lower IQs, leading to lower school performance and achievement. Again, studies have shown this.

The worst-case scenario? A modest number of goldbrickers would take the minimum income, embrace a subsistence-level lifestyle, and stay at home eating Burger King, drinking Coke, and watching "Family Feud" and "Judge Judy." Those goldbrickers would still be active consumers and modest taxpayers.

How many of you, offered the opportunity to rise above such a life, would pass on that opportunity? Damn few. Besides, there are a similar number of people accepting that life under our current system, and they're a constant drain on our taxpayer dollars. What would you like to do, make their lives even more miserable in order to save a few dollars, in order to motivate them? How do you think that would end up? More people living on the street, more people coming into our ERs, more people turning to petty property crimes.

From what I understand about the velocity of money, this flattening of the income-inequality curve could lead to a more robust economy. Also, since there's no reason to believe that productivity gains will completely disappear, there's no reason to believe that income inequality and structural unemployment would be reduced without action. We'll need to do it sooner or later. Why not now?

Can the wealthiest country in the world, at the point of its highest per capita wealth in history, justify not sharing its wealth more equally and constructively?

I believe it can't and shouldn't.

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