How Universal Basic Income (UBI) in America would Work - Liberal Resistance

How Universal Basic Income (UBI) in America would Work

In order to help put a floor on poverty in this country I believe use of a universal basic income would be one of the most effective tools.   It would be one of the only ways to help offset the increasing wealth gap and help ensure that everyone can afford life’s necessities.  

As many Americans could already tell you any bump in the road could cause you to derail in our current economic situation.  As time progresses I think what is going to happen is people won’t even need to experience bumps in the road to experience a financial hard time. It will simply be a function of living in an area with not enough jobs or opportunities for people seeking jobs. 

Here are some numbers I would suggest.  $600/person/month 18 years old+ and $300/child/month (maximum 2 per family).  That would mean a 4 person family would receive a payment a $1,800 monthly payment to help cover basic expenses.  That would be a yearly amount equal to $21,600.  Now assuming each parent works a full-time job at the federal minimum wage of $7.25/hr.  They would both earn $15,080/year in wages.

That would give an average family of 4 with two parents working full-time jobs at the federal minimum wage the following yearly pre-tax budget:

UBI                          $21,600

Full time wage      $15,080

Full time wage      $15,080

$51,760 yearly gross (pre-tax)

A single parent with one child working at federal minimum wage full time job would look like this:

UBI                          $10,800

Full time wage      $15,080

$25,880 yearly gross (pre-tax)

A single individual with no children working a full time federal minimum wage would look like this:

UBI                          $7,200

Full time wage      $15,080

$22,280 yearly gross (pre-tax)

While the single parent might be in a zero tax bracket.  The single person might in a very low tax bracket 10% or $2,228 federal tax.  The family of 4 even if they paid a 15% federal tax they would then contribute back $7,764 in taxes.   Any amount contributed back could help cover the cost of universal health care insurance for those same people.  What I am describing above is a scenario for the lowest wage earners in our society.  Obviously other people will still make a higher wage than minimum wage.  They should also pay more taxes under a true progressive tax structure.

As I would envision this plan.  Certain programs like SNAP (food stamps) and many housing subsidies could be eliminated as well as food and housing would fall under the most basic of expenses. 

Under my plan I would leave social security/disability alone or exactly as is.  People have paid into this program for decades and I feel it is the governments obligation to fulfill what they promised.   This money is still very much needed as most people no longer have any sort of pension.  This will also help ensure that anyone disabled or of older age has enough money to live on.  In the situations below I am assuming an average payout of $1000/month for Social Security (SS) or Social Security Disability Insurance (SSDI).

 

Two individuals on SS or SSDI yearly:

UBI                          $14,400

SS/SSDI                 $24,000

$38,400 yearly gross (pre-tax)

 

Even at a low 15% federal tax rate $5,760 could be contributed back to help cover their Medicare or future Universal Health Coverage.  

 

One individual on SS or SSDI yearly:

UBI                          $7,200

SS/SSDI                 $12,000

$19,200 yearly gross (pre-tax)

Even at a low 10% federal tax rate $1,920 could be contributed back in federal taxes to help cover their Medicare or future Universal Health Coverage expenses. 

 So you might ask how do I plan on paying for this?  The answer is quite simple.  Through higher corporate tax rates, progressice taxes on the wealthy, and through death taxes.  The corporations can’t have it all their way every single time.   Right now they don’t want to ever pay higher wages (or even a living wage) and currently don’t have to pay a meaningful corporate tax rate either.  With our labor force only being able to work only so many hours a day and only able to live for so long, it is time that labor gets treated fairly.

Remember, corporations theoretically can live on forever and can effectively have unlimited time by purchasing other people’s time and can comfortably live in a small cabinet or box.

A death tax doesn’t take any resources away from someone or their spouse while they are alive.  When they pass and no longer need anything financially a percentage is then paid to help pay for the society they financially benefited by living in.  People could avoid the death tax by spending their wealth and that also allowing someone else to earn that money as well.  A death tax will help keep money circulating and help keep people from wanting to only hoard money.  They can still hoard money if they like, but when they die a death tax will be paid. 

 

Hopefully some of our new lawmakers will be interested in this idea or something similar to it.  I can’t tell you the exact corporate tax rate or death tax rate that would need to happen to make this happen.  Only someone who has access to all the country’s financial data at an office like the Congressional Budget Office could probably back out those tax rates.  Those preliminary numbers may be necessary to help write a new bill.  Then as that same bill progresses the CBO could then further scrutinize it to make sure no budget effects were overlooked.

As a side note I would like to point out this may help some people more easily access higher education.  Some basic income coming in monthly while studying for higher education would open up doors for a lot of people.

by Chris Madsen