Universal basic income isn’t unrealistic
While many may say that universal basic income is completely unrealistic to do in this country, it’s completely possible. UBI should be taken seriously as an option to decrease economic insecurity.
The price tag for a universal basic income of one thousand dollars a month per adult is estimated to be a hefty 3.1 trillion dollars a year. Leaving many to worry that the policy may simply be infeasible even if the program would theoretically yield major benefits.
Fortunately, this isn’t necessarily the case. There are many ways the federal government could raise a couple trillion dollars of surplus revenue a year without having to ax major targeted programs like Social Security and Medicaid or wrecking the economy with excessively burdensome taxes.
In fact, a large chunk of the program could be funded by ceasing expenditures that have no right to exist in the first place.
Starting with the income tax, which, in its current form, is absolutely full of deductions and credits that are completely unjustifiable. Take the mortgage interest rate deduction, for instance. Costing a whopping 70 billion dollars a year, this tax provision does nothing but redistribute money to the already well off.
There are some credits and deductions that actually have a good purpose like the Earned Income Tax Credit and the American Opportunity Tax Credit, both of which aim to help low income citizens. While these credits are defensible in the current economic paradigm, they would no longer be necessary if a UBI was in place.
Similarly, many current social expenditures would become redundant with the implementation of a UBI. SNAP, housing vouchers and TANF all exist for those who are at an income below or near the poverty line.
A sizable UBI paired with either an expanded child tax credit or some form of basic child stipend would decrease the amount of people falling below the national poverty line. Thus, the spending on tax credit programs would drastically fall even if they weren’t outright eliminated since less people would need them.
The U.S. government could also save billions annually by eliminating the massive subsidies it currently gives to the environmentally destructive oil and gas companies and monopolistic wealthy agribusiness.
At a local level UBI, would make an immense number of state and local welfare programs and charity efforts. Of course, the money usually going to these programs could be reallocated to other good causes for the general public and other needed areas.
Finally, to cover the rest of the cost of UBI, the U.S. could join 160 other countries and implement a value added tax.
A broad-based VAT, which taxes businesses, raised to Northern European levels would raise trillions of dollars yearly, and if paired with an additional carbon tax, which would have the added benefit of reducing carbon emissions, would easily be able to finance UBI and more.
In recent years, UBI has emerged only to be shut down by people claiming it’s completely impossible. In reality, it is possible.
Ultimately the question shouldn’t be whether it is possible to finance universal basic income or not; it certainly is. UBI should be taken seriously as an option when debating how to reduce economic insecurity, poverty and inequality.
Micah Erfan is an economics freshman who can be reached at [email protected]