How an American Basic Income Might Work
One of the biggest advantages of a basic income scheme is that it would actually be fairly easily to implement. No new bureaucracy or social services mechanisms would be needed to set one up.
Here in the United States the Social Security Administration (SSA); which already distributes payments to 61 million Americans each month, would handle the chore. The existing financial services infrastructure of bank accounts, digital wallets, electronic funds transfer etc. would be more than adequate to move all that money.
Here is my plan for a Basic Income for every American
Each month the SSA would send a cash payment to people who meet the following criteria:
- Are a citizen; or legal resident, of the United States.
- Are residing within the borders of the United States on a permanent basis.
- Are not incarcerated for a felony (convicts’ basic income would either be paid to prison authorities or dispersed to victims as compensation).
- Are at least 18 years of age.
- Meet the income requirements (see below)
- Employment status will not affect basic income eligibility. Only income will affect eligibility.
How Basic Income Would Work
All persons that made less than $20,000 a year (this will be adjusted for inflation in the future) will receive a basic income of $1,000 a month.
The income level would be determined by the person’s tax return. To be eligible for the basic income, the person would have to file a tax return with the IRS.
The monthly basic income payment will be reduced by $50 for each $1,000 the recipient made over the base amount of $20,000. A person that made $21,000 a year would receive $50 a month. A person that made $30,000 a year would receive $500 a month, somebody who made $40,000 a year would receive nothing.
The basic income would be determined on an individual basis and not affected by marital status. That means a married woman that did not work would receive the basic income regardless of her husband’s income. This would please conservatives because it may encourage stay at home moms.
It would be illegal to garnish or levy the basic income for purposes of tax collection, student loan repayment, alimony or any sort of debt collection. The only garnishment of basic income allowed would be for convicted serving prison sentences. Then that money would only be used for prison operations or victim compensation.
How Basic Income would be paid
Recipients would have a number of choices for basic income payout. These would include:
- Direct funds transfer to a bank account.
- Direct funds transfer to the digital wallet of their choice.
- A Visa, American Express, Discover or MasterCard debit card offered by the government.
- If they wished they could have a paper check sent to a legal mailing address. Note this would be discouraged and phased out at some point for security reasons.
- In the case of persons who have been found incapable of administering their affairs by a court such as the mentally disabled; or elderly persons with dementia, funds would be distributed to a legal guardian. Note: this would help such people by providing a means of financing for facilities for their care.
One advantage to this system is that it would get people involved in the banking system. An interesting adjunct to this system might be the creation of postal savings accounts. These might also be offered through retailers such as Walmart and Kroger as well as the post office.
Little or No Infrastructure Required
A major advantage to this system is that it would take advantage of the infrastructure that is already in place.
The program would be administered by SSA, which already exists. The money would be dispersed through the existing banking and payments processing system. Why create a new system when Visa and MasterCard have done all the work?
Persons could apply online or simply by filing a tax return. That is a chore that can easily be handled by H&R Block, Jackson Hewitt, local charities, churches, local social services agencies or any other entity.
My take is that most Americans would be smart enough to apply or find somebody to help them. The possibility of getting an extra $1,000 a month would be a strong incentive.
A major advantage to this system is that it could easily take advantage of all the existing community based resources. That includes family members, churches, charities, helpful people in the neighborhood, friends, unions, small businesspeople and local governments instead of a new bureaucracy.
Where would the Money Come From?
There are a number of potential sources of revenue for a national basic income out there. One with a lot of potential is the Republicans’ border adjustment tax which might generate $1 trillion why not use that money to fund all or part of basic income.
The border adjustment tax is basically a tariff collected on imports. Since many people blame imports for unemployment and income inequality this might be fair. It would ensure that the money goes to those who need it – unemployed workers.
Other sources of revenue might be a carbon tax, some sort of flat tax on high incomes perhaps 10% to 30% on incomes over $1 million, oil and mineral royalties fees, export taxes, progressive income tax or the Value Added Tax. Simply restoring the levels of taxation America had in the 1960s or 1970s might raise enough money.
Revitalizing Rural America with Basic Income
One of the biggest benefits of basic income would be to address the problems of rural poverty and the hollowing out of small town America. The real problem facing communities such as Beattyville, Kentucky, (America’s poorest white town) is a lack of cash.
The current population of Beattyville is around 1,700; and most of them make less than $20,000 a year, according to The Guardian. The national basic income I proposed might pump an additional $1.7 million into Beattyville’s economy each month.
Once such a program was implemented the people of Beattyville would not have to wait for new jobs that might never appear. Nor would they be dependent on industries like coal which might never come back.
A basic income would allow many families to stay in their hometowns. It would also get cash circulating and serve as a real stimulus. The people would spend that money at the grocery store, the hardware, Walmart, whatever which would create jobs. Some would also order more stuff from Amazon or Jet.com which would create more positions as UPS drivers and more work at fulfillment centers. There might also be more sales tax for financing things like schools and roads.
There are towns like Beattyville all over this country and we need to help them. The best way to achieve that is to give the people on Main Street the money they need in the form of basic income.