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For and Against a Basic Income There are several arguments which have been put forward to support the case for a basic income varying from the philosophical (a BI enhances real freedom; redistributes income and wealth; creates social solidarity) to the fairly technocratic (a BI reduces means-testing and increases take up). Meanwhile two main arguments have been put forward against the introduction of BI schemes: that its unconditional nature discourages work or active citizenship; and that a BI scheme would be prohibitively expensive. Summarised below are a selection of the arguments which have been put forward.
A full basic income - paid at a level sufficient for survival - brings with it an enhanced level of freedom. It breaks the chains between freedom of choice, income, and paid employment. It gives people the option not to work, but instead to explore their vocation to paint, to surf or to do nothing. It is this enhancement of freedom which appeals to liberals and libertarians (Samuel Brittan is an example of a liberal economist who has long espoused some form of basic income). This argument has been put forward most forcefully by Phillippe Van Parijs in his book "Real Freedom for All".
This point goes unsaid remarkably often: all advocates of Basic Income schemes are aiming at the redistribution of income and wealth. Where they differ from other egalitarians is on the means of doing so. They believe that redistribution mechanisms which target resources solely on the poor reduce social solidarity by breaking the link between taxation and the welfare state for the rich. Furthermore they worry that targeted schemes brings problem of low take up and and work disincentives through means testing.
Means tests are necessary if policymakers wish to redistribute income and to target limited resources on the most needy. However, the combination of 'tapers' (where benefit income is progressively removed as income rises) and income taxation can mean that many people face high effective marginal tax rates. I.e. for every extra dollar, pound or euro someone earns the State takes away 60, 70, 80 per cent of it. This creates a disincentive to earn more - the poverty trap. And where benefits are linked to being out of work means testing can create a disincentive to find a job - the unemployment trap. Both Social Insurance and Basic Income schemes avoid many of the pitfalls of means testing.
Basic Income is paid unconditionally to all - whether the person works hard, surfs all day, or volunteers in local community groups. It is this notion of 'something for nothing' which many opponents of BI schemes most object to. Along with 'rights' to a BI should come the obligations of citizenship - to work, pay taxes and contribute to the common good. These arguments are reviewed by Amy Wax in "Something for Nothing: Liberal Justice and Welfare Work Requirements". One answer that has been proposed is a modified form of BI called Participation Income.
The main argument - and probably the main reason why a Basic income has never yet seriously been attempted - against BI is that its cost would be prohibitively high. Costings undertaken in Ireland for example found that a tax rate of around 50% was required to finance their chosen Basic Income scheme (which provided £74.80 Irish punt, 2001 prices - or about 37% of average disposable income per adult). A scheme which provided 48% of average income would require a tax rate of around 60%.
Also see links to Basic Income European Network Papers: Barbara Bergmann, "A Swedish-Style Welfare State or Basic Income?", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Sweden Samuel Brittan, "In Praise of Free Lunches", Time Literary Supplement, 2001 UK Tim Callan, Cathal O'Donoghue, Holly Sutherland and Moira Wilson, "Comparative Analysis of Basic Income Proposals: UK and Ireland", The Microsimulation Unit Discussion Paper MU/RM/31, 1999 Ireland and UK Tim Callan, Brian Nolan, John Walsh, James McBride and Richard Nestor, "Basic Income in Ireland: A Study for the Working Group on Basic Income", ESRI / Department of the Taoiseach Working Group on Basic Income Report, Ireland Dynamic Effects of Basic Income - Phase 2 of a Study for the Working Group on Basic Income, Department of the Taoiseach Working Group on Basic Income Report Ireland Overview of Study on Basic Income Department of the Taoiseach Working Group on Basic Income Report Ireland Report for the Working Group on Basic Income - Charles Clark , Department of the Taoiseach Working Group on Basic Income Report Ireland Irv Garfinkel, Chien-Chung Huang, and Wendy Naidich, "The Effects of a Basic Income Guarantee on Poverty and Income Distribution", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Alanna Hartzok, "The Alaska Permanent Fund: A Model of Resource Rents for Public Investment and Citizen Dividends", Earth Rights US Patrick Honohan, "A Radical Reform of Social Welfare and Income Tax Evaluated", Administration Vol. 35 No. 1, 1987 Ireland Michael Lewis, "Perhaps There Can be Too Much Freedom", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Carole Pateman, "Democratizing Citizenship: Some Advantages To Basic Income", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Sheila Shaver and Peter Saunders, "Two Papers on Citizenship And Basic Income", SPRC Discussion Paper 55, 1995 Australia Guy Standing, "CI, COAG and COG: A comment on a Debate", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Phillipe Van Parijs, "Basic Income", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Pascale Vielle and Jean-Michel Bonvin, "Activation Policies: A Capabilities Perspective", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Allan Warrack and Russell R. Keddie, "Alberta Heritage Fund vs. Alaska Permanent Fund: A Comparative Analysis", APFC US Amy Wax, "Something for Nothing: Liberal Justice and Welfare Work Requirements", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 Karl Widerquist, "The Stakeholder Account System: A proposal for a hybrid of Basic Income and Stakeholder Grants for Britain and the United States", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002 UK and US Erik Olin Wright, "Basic Income, Stakeholder Grants, and Class Analysis", Working Paper for the Havens Center Rethinking Redistribution Conference, 2002
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