Society & Politics

The Basic Income: Something both conservatives and progressives should agree is a good idea.

The Basic Income: Something both conservatives and progressives should agree is a good idea.


Finland recently made the news by deciding to give each of its citizens about $875 a week of income. Every week, every year, untaxed. Now, the normal reaction by almost everyone is: "WTH? How can they afford that?". Well, the truth is the "Basic Income" is not only affordable but cheaper for taxpayers than the welfare systems all developed countries have right now, and it will cure poverty once and for all. Here's how it works using the good old USA as an example.


Basic Income: How it works and why it's better than welfare.


So the idea of basic income is to scrap all welfare systems and only pay each citizen (at a certain age and above of course) a guaranteed income every single month. Everyone is payed simply by existing, no work required, and every single citizen is payed the exact same. It's equality at its finest and is the most humane way to breed a society, especially with the ongoing threat of automation stealing many jobs from workers in the next few decades. So, why is it better than the welfare systems we have now? Simple, it will actually cure poverty and will cost less to the taxpayers. So let's use the USA for example (bold added for emphasis on numbers or key points).


I'm using the National Debt Clock for my math here. The US government takes in about $3.3 trillion dollars in tax revenue per year, and spends about $3.7 trillion per year. Yes, we're in a deficit right now, and it's about $441 billion per year. The national debt is also $18.8 trillion and continues to rise...we'll get to that problem in a moment.


Some of the biggest expenditures of the US government are the military, social security, and medicare/medicaid. Here's the expenditure of each:



  • Military: $584 billion per year

  • Medicare/Medicaid: $1 trillion per year

  • Social Security: $888 billion per year

  • Income Security: $303 billion per year


For those of you who don't know, Medicare is single-payer health insurance for those 65 or older and Mecaid is the same but for any citizen facing terrible circumstances. Social Security is social insurance program for disabled/retired citizens, and Income security is supplemental income, income credits, unemployment compensation, food stamps, etc.


So, we spend about $2.775 trillion per year on all of the things I listed above. Look, we can't keep spending at a deficit and budget cuts will have to be made somewhere. Disregarding military spending, social welfare adds up to about $2.191 trillion per year. That's a lot and we still have 161 million US citizens out of 322 million receiving benefits. That is literally half of the population on some sort of social welfare and still 44 million or a seventh of the population is in poverty. Obviously our current social welfare program isn't working right.


So what if we implement a Basic Income now and cut out the social welfare? Here's how we'll do it, each US citizen over the age of 21 gets $850 per month or $10,200 per year. The US population 21 or over is about 75%. So, 241.5 million US citizens receiving a basic income would add up to $2.415 trillion per year, with no more social welfare. This new system would only cost $224 billion more per year and would help simplify everything. Now, for those of you keeping track, this doesn't sound good, we're still spending more money! However, there exists a way to reduce government spending too: Reduce military costs.


Subtracting the social welfare out of current total US government spending and adding in the Basic income, total US government spending would be $3.924 trillion per year. A little more expensive, but we're assuming we'll spend the same we do on our military now. Heads up: There is no logical reason we need to spend $583 billion dollars on our military every year. We could cut that down to only $150 billion per year and still have the world's most powerful military. No, we don't need all of those overseas bases. No, we don't need to find another Middle Eastern country to invade every several years. We could wipe out ISIS with airstrikes with only $100 billion per year and never enter that region of the world again. So, let's go ahead and do that. Let's only spend $100 billion per year on our military. Guess what total government spending with the Basic Income is now? $3.491 trillion. Well that almost balanced the budget, but if we want to have a surplus (to pay of that national debt) we'll have to raise taxes on everyone...except with a basic income we can raise a tax revenue without raising taxes on workers, in fact it'd do the opposite because we'd have more taxpayers.


How the Basic Income influences the working sphere:


First off, many people think that with a Basic Income people would either quit their jobs and/or have no motivation to work. This is completely untrue, however, because a Basic Income is not a living income. It isn't even a working income. Someone who works full-time, 40 hours a week, at a minimum wage job of $7.25 an hour will actually earn much more than the Basic Income, about $15,080 per year. Many people already are screaming that the current minimum wage is too little and needs to be raised, which would have terrible consequences as I've already explained. If you spend just $20 a day on food, which is pretty much scraps, you'd spend about $600 of that $850 on food per month, and again that's just living off of almost nothing. I doubt you'll be able to find anywhere that rents for $250 a month with that left over Basic Income. So you'd have to work unless you're cool with being homeless. The good news is if you, like many others would, find at least a minimum wage job and work full time you'd be out of poverty. Poverty in the US is classified as $25,000 a year income or lower. A basic income + working a full-time minimum wage job would make you earn $25,280 per year! There would be no more poverty in the US for those that work! This means there would be no need for a higher minimum wage since the current wage would thus be a living wage, and more people would have a drive to work because they could actually see a positive future ahead of them if they do. Now even a minimum wage job is enough to get by comfortably, so those refusing to take a minimum wage job because it wouldn't help will. Since this income is limited to those only 21 and above, kids fresh out of high school aren't going to deny college or work waiting on the Basic Income to take care of them. Those who want to work a job that would be more passionate for them now can, since any wage gap created by that more satisfying job will be made up for by basic income. After all, the economy does better when everyone is more productive, and productivity is easy doing something you love.


This isn't the only effect, however. With a revised tax system and very few employed workers in poverty, there can now be many more taxpayers. There's about 149.4 million workers in the US, and all of them will receive a basic income. With less in poverty, more Americans will file and pay an income tax. There are only about 119.4 million who officially pay income taxes. Raising that number means more taxpayers and more revenue overall since the extra Basic Income knocked some into a higher tax bracket. Since there are now more tax payers, and more workers that will pay more payroll taxes, our total tax revenue has increased. Not only that but people with more money consume more, so sales and excise taxes will also increase. This consumption also means better business and thus corporate tax revenue will also increase. This extra consumption also will grow the economy even more, creating more jobs and wealth overall. We would not only have enough to pay our government expenditures but now have a surplus to pay the national debt, and could probably even lower tax rates for everyone overall since there are many more taxpayers and more revenue coming in. Those who payed, say, $10.000 or more of their incomes in taxes (a single person making at least $40k per year at a tax rate of 25%) now just either covered their differences with the Basic Income or simply "owe" $10,000 less in taxes. The Federal income tax rate of 25% covers any income from $37.5k-$91k, so many US workers are going to see all or some of their income taxes "returned" to them.


Either way, the basic income would cause greater tax revenue at the same or lesser rates than we currently have. It's an equal and easier redistribution for wealth that benefits everyone and harms none, it also simplifies the whole welfare program by completely getting rid of it. It's a program that both Republicans, Democrats, and everyone else can and should stand by because of whole logical and better it is.


Thank you for reading and post any questions & comments below.

The Basic Income: Something both conservatives and progressives should agree is a good idea.
Post Opinion