316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year.
The budget that Obama just proposed is $4 trillion dollars (and that has no chance of getting implemented in full). Even if we say you can cut half of that out (Social Security, Medicare/Medicaid, etc), let's call it $2 trillion dollars.
So we need $11 trillion dollars of tax money to fund this. The total net worth of US private people is $67 trillion or so[1]. The aggregate net worth of the top 400 people in the USA is $2.3 trillion[2]. You could take all of their money, and still not even come close to paying for the program for ONE YEAR.
At that point, you start having to come down hard on the upper middle class. The top 25% owns roughly 73% of the wealth in the country, or ~$48 trillion. If you tax their NET WORTH at 25%, you could fund the program for a year.
Pretty quickly you're going to run into a situation where you're cutting a check to everyone, then collecting the money (and more) back in taxes. And in this case, it's terribly inefficient.
On a small scale, a program like this probably works well. On a large scale, it would be a disaster.
>316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year.
I'm not sure if you read the article. But the proposition in Canada was essentially a negative income tax for the lowest tax brackets. And it didn't reach nearly your $30k a year - I have no idea where you came up with that number. Current deliberation on the issue would not even consider nearly that amount.
>On a large scale, it would be a disaster.
Only if we let you make the plan. There is plenty of other serious discussions about reasonable possibilities in this space.
> The whole point of BI is to be a low-middle class income
Some advocates of BI may support that as the desired level, but few even of those who support it as a target level see it as the point.
A couple things that people generally cite as the point of BI:
(1) replacing means-tested social support programs with high bureaucratic oversight costs and perverse incentives (disincentives to outside income from means-testing) with a simpler system with lower bureaucratic oversight costs and fewer perverse incentives,
(2) increasing labor market mobility, mid-career educational opportunities, and entrepreneurial opportunities by making voluntary temporary lack of outside income less catastrophic of a cost.
(3) accommodating a transition to more automated society where market income will increasingly go to capital holders and labor will drop in value by redistributing gains that otherwise would become intensely concentrated.
People can dispute about the ideal target levels (both initial and long-term goals) for BI while supporting it, and I don't see many people seeing "low-middle class income" or $30K/yr as the point of BI, or even necessarily either the short or long-term target level. (I personally think its both too high as a near-term target and too low as a long-term target level.)
For what it's worth, the experiment in the article didn't give everyone $X directly, the benefit slowly dropped off as their own income increased.
For example, let's assume X to be $30k/year, and a drop-off rate of 50 cents on the dollar. (the experiment used an inflation-adjusted $10k/year, and 50 cent dropoff).
With these assumptions, someone who had no other income at all would get the full benefit. Someone who earned $10k/year would get $25k of benefit, someone who earned $30k/year would get $15k, and someone earning $60k+/year would not receive any benefit at all.
So, let's apply this back-of-the-envelope math.
according to http://www.census.gov/hhes/www/cpstables/032014/perinc/pinc0..., Total Work Experience, Both Sexes, All Races,
there were about 252 million persons 15 or older in the US, 218 million of which had some income reported. Of these, about 174 million with $60k/year or less.
Assuming everyone gets a benefit equal to $30k - 1/2 their income, and everyone's income is at the bottom of their respective bucket, the total cost of this program would be about $3.26 trillion.
This is not a small amount of money, but it would also replace many existing welfare programs (many of which are implemented at the state or city level, effectively transferring budget from the federal to the local)
Charles Murray threw out a number like $30k for the average family but that was based on $10k per person.[1] But let's do a very generous envelope calculation and say that all of the 109 million Americans who current receive some form of welfare assistance suddenly become eligible for $10k per year. That's $1.09 trillion in new spending. BUT -- we currently spend about $450 billion annually on welfare programs, so your net increase is only $559 billion.
And that's assuming everyone gets $10k without considering the 50% decrease in aid for each additional dollar earned. If we use the $360 billion number someone else threw out, you could actually reduce spending by $90 billion annually if BI replaced large federal/state welfare programs.
And none of that is counting the extra economic activity when people on SSDI -- which has stopped being a long-term disability program and become a stop-gap aid for the "systemically unemployable" until they can collect Social Security at 62 -- are allowed to openly perform some work at their ability level. Right now they have to keep up the charade that they are "disabled" even if their SSDI qualification is only because they lack the skills to find a job during the 10-15 years before Social Security eligibility.
If you made it $8,000, a family of 4 would still be above today's poverty line (which is still arbitrary, but it seems like a better "minimal income" than one that gives everybody approximately the current median personal income).
I think there would need to be some structure around children, what an incentive to make babies! $8k per baby per year, the Duggar family would be making $168k per year! I'd rather it be something as an adult. So the number of people 18 years or older is 242,470,820 [0]. Double the $8k to meet that poverty line as a couple. So at $16k per adult you come out to just under $3.9 trillion a year.
Edit: from the poverty data [1] you could say that only ~45 million people get the full $8k, the rest starts to taper off at the 50 cents to a dollar pace. That means this would cost considerably less. $360 billion is the minimum. The cost out would be $3.9 trillion, but those extra $8k checks would be collected at tax time. A one job two adult household, the job holder would have to pay back all the $8k, but the partner wouldn't if they didn't make any money.
Maybe. I think people mostly see children as a responsibility though, so I wonder if the problem would live up to the concern.
I wonder if you could try to measure the differences in birth rates for people receiving the EIC, comparing across numbers of children (at some income levels the first child provides ~2x the benefit as the third).
edit: Searching "EITC birth rates" shows that people have looked at it.
316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year.
The budget that Obama just proposed is $4 trillion dollars (and that has no chance of getting implemented in full). Even if we say you can cut half of that out (Social Security, Medicare/Medicaid, etc), let's call it $2 trillion dollars.
So we need $11 trillion dollars of tax money to fund this. The total net worth of US private people is $67 trillion or so[1]. The aggregate net worth of the top 400 people in the USA is $2.3 trillion[2]. You could take all of their money, and still not even come close to paying for the program for ONE YEAR.
At that point, you start having to come down hard on the upper middle class. The top 25% owns roughly 73% of the wealth in the country, or ~$48 trillion. If you tax their NET WORTH at 25%, you could fund the program for a year.
Pretty quickly you're going to run into a situation where you're cutting a check to everyone, then collecting the money (and more) back in taxes. And in this case, it's terribly inefficient.
On a small scale, a program like this probably works well. On a large scale, it would be a disaster.
[1] http://en.wikipedia.org/wiki/Financial_position_of_the_Unite... [2] http://www.forbes.com/forbes-400/