> "Well you can realize that taking care of those people is not going to be free."
Virtually every discussion of basic income on the internet these days avoids doing even the most basic arithmetic. So I'll give a very oversimplified set of calculations below. The details can be nitpicked ad nauseum, but this is essentially Feynman-style estimation, so please see the forest and not just the trees.
First, some facts:
According to the BLS, the lowest quintile of Americans spent $12,955 on goods and services in 2014 [1].
The US adult population in 2014 is about 242.5 million people [2].
So if we wanted to provide a guaranteed unconditional income equal to the average yearly expenditures of the bottom quintile of Americans, the cost would total about 3.14 trillion dollars.
Total U.S. tax revenue in 2014 was 3.2 trillion dollars [3].
So a basic income program that merely provides poverty-level income for all Americans is going to cost all of our current federal tax revenue, and we are already running a federal defecit.
This is plainly not feasible without vastly increasing tax revenue.
You could argue that state and local revenue could pick up the slack, but states and municipalities are generally under severe budgetary pressures as well and have even less power to raise additional revenue. Even if all tax revenue in the US from any source is considered accessible for a basic income program, that pile of money is only about $6 trillion, so a poverty-level basic income program is going to consume half of all tax revenue collected from any source in the US.
All of this is an optimistic calculation. It doesn't account for the contraction of the economy (and thus tax revenue) that would occur due to people ceasing part time work or other low paying jobs. Or the increasing amount of federal revenue directed to servicing our national debt [4], which will make any basic income system increasingly unaffordable in the future (absent corresponding economic growth). You could alleviate some of that economic contraction by taxing the basic income itself (possibly conditionally, based on economic circumstances), but then you are providing a post-tax basic income that doesn't even meet the poverty level.
The fact is that the demographics of the United States simply prohibit any meaningful basic income system from working at the present time. It simply won't work without increasing tax revenues to levels that will destroy the economy. And this is ignoring the political obstacles that would have to be overcome (such as placing most of the additional tax burden on the 1%).
Our existing welfare systems, inefficient and bloated as they are, at least attempt to target those who are most at need. If you try to make a basic income system that essentially replaces existing welfare programs by taxing most of the basic income back from people who exceed certain economic threshholds, you are doing little more than inefficiently adjusting tax brackets.
It's a nice dream, but somebody has to pay for it and right now nobody can.
I have often heard people make the back of the envelope argument you are making. I'm unconvinced.
Everyone I've heard seriously propose a basic income has coupled it with a progressive increase in federal income tax, so that individuals earning above $50k or so would receive no increase in their BI+earned income-federal income tax.
So the actual ratio of basic income provision to federal income tax would be much lower than 1:1. 1:2 seems more reasonable.
Then, the expectation is we would significantly reduce spending on distortionary and expensive bureaucracy like food stamps, welfare, minimum wage, school lunches, and housing subsidies.
I imagine overall people in high income brackets would pay higher income taxes to the extent that we wanted to balance the budget.
We can also do things like spend less on bombs ($500B less IMO), end all corporate subsidies (either tax reduction or cost shifting like agriculture subsidies) . Additionally we will save a fortune from how we presently treat poverty symptomatically. Someone in jail costs upto $168K a year, homeless people cost a fortune to the healthcare system[1]
The list goes on and on. Its cheaper to do BI than it is to do what we're already doing. It doesnt cost $3T _more_ it costs less than what we _already_ spend.
Yeah but there is one thing that people doing quick mathematics ignore when they pronounce Basic Income unworkable. And that is that it will absolutely have to work in some manner. That's why I am working to mentally adapt myself to it and get ready to support it. Because it is coming one way or the other.
You are not going to put 50% of people of work, and you're not going to consign a hundred million people to a worsening standard of living even as those with capital get to live like gods. Its not happening. Period. End of. So however it gets done, the fruits of automation will be shared in some way with the majority who do not own factories or the factories will be smashed. We can bandy about numbers all day, and talk about levels of taxation that will "destroy the economy" but at the end of the day the bottom line is that we will be taking care of those who can't work, and that is probably going to end up including you. So you should probably start thinking about how we can make that happen in the least disruptive way possible, and what you can do to make it happen.
> "Yeah but there is one thing that people doing quick mathematics ignore when they pronounce Basic Income unworkable. And that is that it will absolutely have to work in some manner."
This is known as the head-in-the-sand approach and it is obviously nonsense.
Basic income is one proposed solution to the increasing automation of work and population growth. It's achieved such a cultlike status in some circles that those within them forget it's not the only possible solution.
And, truthfully, there is no guarantee that a solution will even be found. If one is, it may not be a "solution" in the usual sense. Here are some other possible resolutions to increasing wealth concentration combined with population growth:
1. State redistribution of wealth via tax and other changes
2. A shift of wealth from industries that automate things to those that produce valuable things or services which cannot be automated (i.e. as automation becomes increasingly cheap, competition in industries which rely on it results in those becoming commodity industries)
3. Society chooses to tolerate an increased number of homeless and poor people and their suffering rather than make changes to its tax or legal structure.
4. Artificial population control. A world with decreasing job opportunities can be sustained as long as population decreases in proportion.
5. Revolution
And there are other options, some completely unseen.
> "You are not going to put 50% of people of work, and you're not going to consign a hundred million people to a worsening standard of living even as those with capital get to live like gods."
The exact numbers may not be as dire as 50%, but historically plutocracy has been the norm and not the exception. Plenty of egalitarian societies (for varying definitions of "egalitarian") have sprung up and died off, but plutocracy as a system exhibits long term stability due to the nature of wealth and inheritance. Whatever its moral deficiencies, plutocracy is simply a consequence of the fact that wealth naturally tends towards concentration rather than dispersal.
The real problem with basic income is that the inspiration for the system not only relies on an unproven assumption about the future, but one that has no historical precedent: the destruction of job opportunities for most people without a corresponding increase in new opportunities. The former has happened over and over throughout history but it has always been followed by the latter.
What we've seen over the past century has been a steady automation of mundane tasks displacing menial labor and an increase in the number of people in "creative" professions. Until strong AI comes along, and in particular a strong AI that enjoys making art, there will always be a need for human beings to serve in the latter category of jobs.
A bigger economic problem, and one which actually does deserve serious thought and consideration, is how to make the economics of a creative economy work. The old feudal style model of publishers lording over their effectively serf-like artists (while the latter churned out content whose profits were largely eaten by the former) plainly doesn't work.
The bottom line is that changes are coming, and while those changes can't be stopped it is hubris to claim that one and only one never-tried-before solution will solve a never-occurred-before economic problem. The reason you never see faithful proponents of basic income discuss it in terms of hard numbers is because doing so makes it obvious that other solutions will have to be considered. The mainstream proposals for basic income are an economic religion complete with all the hallmarks of religion: an unfalsifiable dogma ("in the future, robots will take all the jobs"), guilt and fear as a means of control and persuasion, and an apocalptic narrative. But they are most definitely not economic science.
Contrary to the frequent assertions that it has never been tried it has actually been tried about five times in North America alone, several of the studies were in the US. One very thoroughly documented one Canada is described on Wikipedia: http://en.wikipedia.org/wiki/Mincome
Virtually every discussion of basic income on the internet these days avoids doing even the most basic arithmetic. So I'll give a very oversimplified set of calculations below. The details can be nitpicked ad nauseum, but this is essentially Feynman-style estimation, so please see the forest and not just the trees.
First, some facts:
According to the BLS, the lowest quintile of Americans spent $12,955 on goods and services in 2014 [1].
The US adult population in 2014 is about 242.5 million people [2].
So if we wanted to provide a guaranteed unconditional income equal to the average yearly expenditures of the bottom quintile of Americans, the cost would total about 3.14 trillion dollars.
Total U.S. tax revenue in 2014 was 3.2 trillion dollars [3].
So a basic income program that merely provides poverty-level income for all Americans is going to cost all of our current federal tax revenue, and we are already running a federal defecit.
This is plainly not feasible without vastly increasing tax revenue.
You could argue that state and local revenue could pick up the slack, but states and municipalities are generally under severe budgetary pressures as well and have even less power to raise additional revenue. Even if all tax revenue in the US from any source is considered accessible for a basic income program, that pile of money is only about $6 trillion, so a poverty-level basic income program is going to consume half of all tax revenue collected from any source in the US.
All of this is an optimistic calculation. It doesn't account for the contraction of the economy (and thus tax revenue) that would occur due to people ceasing part time work or other low paying jobs. Or the increasing amount of federal revenue directed to servicing our national debt [4], which will make any basic income system increasingly unaffordable in the future (absent corresponding economic growth). You could alleviate some of that economic contraction by taxing the basic income itself (possibly conditionally, based on economic circumstances), but then you are providing a post-tax basic income that doesn't even meet the poverty level.
The fact is that the demographics of the United States simply prohibit any meaningful basic income system from working at the present time. It simply won't work without increasing tax revenues to levels that will destroy the economy. And this is ignoring the political obstacles that would have to be overcome (such as placing most of the additional tax burden on the 1%).
Our existing welfare systems, inefficient and bloated as they are, at least attempt to target those who are most at need. If you try to make a basic income system that essentially replaces existing welfare programs by taxing most of the basic income back from people who exceed certain economic threshholds, you are doing little more than inefficiently adjusting tax brackets.
It's a nice dream, but somebody has to pay for it and right now nobody can.
[1] ftp://ftp.bls.gov/pub/special.requests/ce/standard/2008/quintile.txt
[2] http://datacenter.kidscount.org/data/tables/99-total-populat...
[3] http://www.usgovernmentrevenue.com/fed_revenue_2014US
[4] http://si.wsj.net/public/resources/images/BN-GT738_ristid_G_...