Basic Income Guarantee

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1 Basic Income Guarantee

2 Exploring the Basic Income Guarantee Basic income is one of the most innovative, powerful, straightforward, and controversial proposals for addressing poverty and growing inequalities. A Basic Income Guarantee (BIG) is designed to be an unconditional, government-ensured guarantee that all citizens will have enough income to meet their basic needs. The concept of basic, or guaranteed, income is a form of social provision and this series examines the arguments for and against it from an interdisciplinary perspective with a special focus on the economic and social factors. By systematically connecting abstract philosophical debates over competing principles of BIG to the empirical analysis of concrete policy proposals, this series contributes to the fields of economics, politics, social policy, and philosophy and establishes a theoretical framework for interdisciplinary research. It will bring together international and national scholars and activists to provide a comparative look at the main efforts to date to pass unconditional BIG legislation across regions of the globe and will identify commonalities and differences across countries drawing lessons for advancing social policies in general and BIG policies in particular. Series Editors: Karl Widerquist is a visiting associate professor of Philosophy at Georgetown University-Qatar. James Bryan is an associate professor of Economics at Manhattanville College. Michael A. Lewis is an associate professor at Hunter College School of Social Work. Basic Income Reconsidered Simon Birnbaum Alaska s Permanent Fund Dividend Edited By Karl Widerquist and Michael W. Howard Basic Income Guarantee Allan Sheahen

3 Basic Income Guarantee Your Right to Economic Security Allan Sheahe n

4 BASIC INCOME GUARANTEE Copyright Allan Sheahen, S o f t c o v e r r e p r i n t o f t h e h a r d c o v e r 1 s t e d i t i o n All rights reserved. First published in 2012 by PALGRAVE MACMILLAN in the United States a division of St. Martin s Press LLC, 175 Fifth Avenue, New York, NY Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number , of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. I S B N I S B N ( e B o o k ) D O I / Library of Congress Cataloging-in-Publication Data Sheahen, Allan. Basic income guarantee : your right to economic security / by Allan Sheahen. pages cm. (Exploring the basic income guarantee series) ISBN (hardback) 1. Guaranteed annual income United States. 2. Public welfare United States. 3. Economic security United States. I. Title. HC110.I5S dc A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: July

5 Previous Publications Guaranteed Income: The Right to Economic Security (1983)

6 A Basic Income Guarantee (BIG) is a government program to ensure every citizen s basic economic security. All Americans would receive, without means test or work requirement, an income sufficient for food, shelter, and basic necessities. Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing, medical care, and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age, or other lack of livelihood in circumstances beyond his control. Article 25 of the Universal Declaration of Human Rights of the United Nations

7 Contents List of Tables Preface Acknowledgments Prologue ix xi xiii xv 1 Introduction: It s Time to Think BIG 1 2 So What s the BIG Idea? 3 3 Why Did We Lose the War on Poverty? 7 4 Did You Know? 13 5 Why Are Jobs Not the Answer? 19 6 Why Is There So Much Inequality in the United States? 31 7 How Do Other Countries Handle Economic Security? 49 8 Why Should the United States Adopt a Basic Income Guarantee? 55 9 Is a Basic Income Guarantee Moral? Why Should I Work to Support Welfare Chiselers? Why Not Guarantee Everyone a Job? Why Not Try Other Programs? Can the United States Afford a Basic Income Guarantee? Will a Basic Income Guarantee Work? Has the Basic Income Guarantee Ever Been Tested? What about the Work Ethic? What Will Life Be Like under a Basic Income Guarantee? 117

8 viii CONTENTS 18 Will a Basic Income Guarantee Threaten Democracy? How Is a Basic Income Guarantee Administered? What s Happening with BIG around the World? Can America Be Convinced? Realistically, What Are the Chances for a BIG in the United States? 147 Appendix A The Cost of a Basic Income Guarantee 153 Appendix B Current Social Welfare Programs 161 Appendix C A Brief History of a Basic Income Guarantee 171 Appendix D Alternate Forms of a Basic Income Guarantee 179 Appendix E Resources 181 Appendix F Suggested Reading 183 Notes 185 Index 193

9 Tables 2.1 How Does BIG Work? Earnings, Wages, Tax Rates 6.2 Federal Revenue vs. Income Tax Rates 7.1 Percent of GDP Spent on Social Programs by Advanced Nations 7.2 Tax Revenues as a percent of GDP by Advanced Nations 13.1 Annual Cost of BIG 13.2 BIG Savings 13.3 How Does BIG Work? 13.4 U.S. Government Revenues and Expenses Current and Projected under a BIG Plan Appendix Table 1 List of Tax Expenditures 153 Appendix Table 2 List of Welfare Programs

10 Preface What This Book Is Everyone should understand the great issues of our time. But, of course, nobody does. It s not that we don t have the time or the interest. It s that the issues are too confusing. Too complex. We get it piecemeal in the paper, on TV, over the Internet. We can never make much sense out of it. Congress and the President aren t much different. Except that they have to make the decisions. Often on sketchy, incomplete facts. Or on overwhelming, contradictory data that no one person can possibly grasp. Wouldn t it be nice to get the whole picture of an issue in one compact form? Something we could spend an hour or two on, and really understand? Well, this book does just that. It s about one of those big issues the Basic Income Guarantee. Sometimes it s called the Negative Income Tax or the Guaranteed Income. It s a plan that says that everyone has the right to live; that you and your family have the right to economic security. The plan would provide every American with a minimum level of income enough for food, shelter, and basic necessities. This book is written in plain, simple English in easy to follow question-and-answer form. The book takes an affirmative position on the topic. But it raises all the objections of the other side. It asks the toughest questions. And answers them. If the answers make sense to you, you ll probably support the idea. If the questions make more sense, you won t. Simple. If both the questions and answers bore you to death, then maybe there s no way to understand complex issues.

11 xii PREFACE There are 146 questions and answers in the book. In 22 chapters. The book sort of flows from one question to the next. But one section may interest you more than others. Dip into it someplace. If you don t at least get a spark of excitement over what this plan could do for you and for our country, then throw the book away. It s not for you. If the book becomes popular, it may surprise a lot of people who think Americans aren t ready to read anything more serious than the sports pages. Then there ll be other books, by other people, on other issues.

12 Acknowledgments No one has a monopoly on ideas, and this book is an attempt to bring together, in one compact form, ideas conceived and expressed by many others over a long period of time on the subject of a Basic Income Guarantee. I would like to acknowledge the writings of Robert Theobald, Philip Wogaman, Erich Fromm, Daniel Moynihan, Milton Friedman, Theresa Funiciello, Michael Murray, Steven Shafarman, Karl Widerquist, Philippe Van Parijs, Guy Standing, and Leonard Greene. I also must thank the following members of the USBIG Committee for their constant encouragement and dedication to BIG: Michael Lewis, Michael Howard, Almaz Zelleke, Eri Noguchi, Dan O Sullivan, Stanley Aronowitz, Steve Shafarman, and Karl Widerquist. In addition, I acknowledge the founders and leaders of the worldwide BIG movement for more than 15 years: Guy Standing, Philippe Van Parijs, Eduardo Suplicy, Sean Healy, and Ingrid Van Niekirk, among many others. I also wish to thank Theresa Funiciello and Andrea Spica for their personal encouragement and support. Thanks also to Steven Strick and Andrea Spica for helping with the technical aspects of producing the manuscript, and to Rachel Nishan for compiling a very detailed index. Needless to say, this book would not have happened without Palgrave Macmillan asking me to update and rewrite my original 1983 book. Thanks are owed to my editorial assistant, Leila Campoli, to the Palgrave Macmillan production team for designing the cover, and to the anonymous reviewer who made dozens of positive suggestions.

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14 Prologue Today, we take for granted rights that took decades of hard fighting to obtain: the right to free speech; the right to religious freedom; the right to vote; the right to free public education. Most advanced nations even provide the right to free health care. But what about the right to economic security? To a basic income guarantee? Is it a pipe dream? Is it politically possible? Is it right? The idea is not new. It s as old as history itself. The Bible, the French Constitution, the United Nations, and dozens of commissions, scholars, and economists support the concept of a basic income guarantee. Basic Income Guarantee: Your Right to Economic Security argues that there is a moral obligation to provide every man, woman, and child with a decent level of living. Your right to be your right to simple existence is not something for others to grant or withhold as an economic carrot, or to give as a gift. It is a universal right. Some call it Social Security for everyone. In plain, simple English, Sheahen answers the toughest questions about an issue that would revolutionize the American way of life. Is the threat of starvation needed to make people work? Or does everyone have a moral right to eat, whether they work or not? The American Dream is not: I ve got mine; you get yours. We re all in this together. We can end poverty, close the wealth gap, and provide economic security to everyone by giving all citizens a modest, yet unconditional, income.

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