Friday, December 20, 2013

Basic income for everyone

A simple idea for eliminating poverty is garnering attention recently: The government would mail everyone over the age of 21 a check each month, thus providing them with a guaranteed basic income. Everyone is free to do what they like with it.

A minimum income would allow for the elimination of all benefits. Workers should have greater leverage to demand higher wages and better working conditions from their employer thanks to the increased income security. Families might afford one parent to take time off to raise their kids. Eliminating the numerous welfare programs would also lead to efficiency gains as adults would not have to waste time filling out paperwork or visiting numerous offices.

Switzerland will soon vote to give each working age adult a basic income of $2,800 per month. Supporters of the initiative unloaded a dump truck of eight million coins, one for every Swiss citizen, after they successfully gained 125,000 signatures and triggered the referendum. Other countries have experimented with basic income in small areas, but none has done so throughout an entire country as Switzerland is considering. If the referendum passes, economists will certainly watch intently to see its effects.

Even Hugh Segal, an old school Conservative, likes this concept. The only thing he would do differently is administer it via the income tax system. The less money you make, the less tax you have to pay and at the poverty line, going below it means the tax man owes you.

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