More Thoughts on UBI

The main problem with Universal Basic Income proposals is that there are so many of them, and they are so completely different from one another, that the term is no longer meaningful. But the current need for governments to distribute large sums of money to mitigate the impacts of COVID does open the door to asking for more of the same kind of income support in order to address both current and future losses of employment, and to finding additional sources of revenue to pay for it.

Three questions that could be asked about any such proposal:

  • How universal is it?
  • How “basic” is it?
  • Where does the money come from?

Does “universal” mean a universal improvement (in particular being provided without clawbacks, and in addition to rather than in place of current levels of support for people with extra needs)? Does the proposed “basic” income really provide an acceptable standard of living for all, or as a sole source of income would it still leave people in grinding poverty? And does it come from some additional source of revenue, or is it just a repackaging of existing social programmes including medicare, public education, transit etc.?

To my mind what we really need would be better identified as a Universal Fair Inheritance and it should reflect the right of every person to the profits from an approximately equal share of all the world’s capital – or at least of that 99.99% of it which arises from the work and invention of previous generations. Anything short of this is just like putting bandaids on severed limbs, or on the wounds felt walking towards a constantly firing machine gun, and debating the relative merits of current proposals is like arguing about whether it’s best to apply the bandaids sideways or front-to-back across the broken ends.

So let’s get real, and always make the “unrealistic” demand! But because it’s widely considered “unrealistic”, the demand alone will not suffice. What we need to do is provide a way of meeting it.

I have two.

One is the Jacobin/Bolshevik solution. Kill all those who we find guilty of hoarding wealth (or of sympathizing with them, or of lacking commitment to the revolution, or of just looking as if they might lack such commitment, or of…..etc) and redistribute that wealth among whomever is left. It’s not impossible! It’s been done more than twice. But it is often met with resistance, and there may be other reasons for it not to be the preferred solution.

My second solution may be slower and less satisfying to those in resentful penury, but it may be easier for others to accept (especially if presented as the only alternative to the former). It doesn’t preclude a smallish further grab by way of a (progressive) tax on assets, but the main idea is to heavily tax large inheritances. How heavily? Well why not just tax them as income in the year received? And in order to avoid avoidance of the tax by way of pre-death gifts (but also just because it makes sense anyway), why not also tax gifts of any kind as income in the year they are received? Indeed why do we think it perfectly natural to tax income that is earned through honest labour more heavily than unearned income of every kind?

Q: What? You want to tax my children on their birthday toys?

A: Only if their combined value in one year exceeds the income tax exemption of a normal person.

Q: But what about the injustices that people are facing now?

A: By all means keep on asking for bandaids, but let’s include in every bandaid campaign a call for Universal Fair Inheritance  to be paid for by new truly progressive taxes not just on workers wages but also (and in fact especially) on unearned income (such as inheritances, gifts, and sinecures). We could call it the Fair Inheritance Tax – I think that’s only fitting.

Source: What’s Wrong with Yang’s UBI Proposal? « alQpr

See also: My earlier post on ‘Capital’

This entry was posted in economics, uncategorized and tagged , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *