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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, April 12, 2018

Fleischer Presents The Architecture Of A Basic Income Today At Duke

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents The Architecture of a Basic Income (with Daniel Hemel (Chicago)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

The notion of a universal basic income (“UBI”) has captivated academics, entrepreneurs, policymakers, and ordinary citizens in recent months. Pilot studies of a UBI are underway across the globe, including in Canada, Finland, Italy, Kenya, and Uganda. Here in the United States, the city of Stockton, California, has partnered with a nonprofit organization to give checks of $500 a month—no strings attached—to several dozen families. And prominent voices from across the ideological spectrum have taken up the UBI idea as well: libertarian Charles Murray, Facebook co-founder and Obama campaign strategist Chris Hughes, and former labor leader Andy Stern all have offered proposals for nationwide programs that resemble a UBI.

To be sure, even the most optimistic advocates for a UBI will acknowledge that nationwide implementation lies years—if not decades—ahead. And accordingly, one might argue that hashing out the nitty-gritty programmatic specifications of a UBI puts the cart before the horse. But as we seek to show below, these design details in many cases are the horse. What might seem like technical aspects of a UBI (e.g., whether it is paid monthly or annually; whether an individual’s future stream of UBI payments can be posted as collateral for a loan; and whether a spouse’s income is factored into the calculation of a phaseout) turn out to be essential elements that affect whether a future UBI will live up to the high expectations that supporters have set.

This Article seeks to advance the conversation among academics and policymakers about UBI implementation. Our prior work has focused on the philosophical foundations of a basic income; here, we build up from those foundations to identify the practical building blocks of a large-scale cash transfer program. After canvassing the considerations relevant to the design of a UBI, we arrive at a set of specific recommendations for policymakers. Among these:

    1. A comprehensive basic income should cover children, nonelderly adults, and senior citizens not receiving benefits under Social Security’s Old-Age and Survivors Insurance program, and should extend to all citizens and lawful permanent residents;
    2. The cost of a UBI should be offset by the elimination of existing cash and near-cash transfer programs as well as a flat surtax on gross or adjusted gross income or some variation thereof;
    3. Payments should be made via direct deposit on a monthly basis;
    4. Adult UBI recipients should have a limited ability to use future payments as collateral for short- and medium-term loans;
    5. The Social Security Administration is the agency best equipped to administer payments, with the Internal Revenue Service administering the offsetting surtax; and
    6. Marriage penalties, cliff-like asset tests, and geographic differences in payment amounts all should be avoided.

Importantly, the building blocks of a UBI do not necessarily determine its outward face. By this, we mean that economically identical programs can be described in very different ways without altering any of the essential features. For example, a basic income for all individuals funded by an additional income tax can—without any substantive change—be recast as a “negative income tax” that only provides benefits to individuals or households below a certain income threshold. To be sure, packaging matters to the public perception of a UBI, and we consider reasons why some characterizations of the program may prove more popular than others. A key contribution of this Article is to sort the building blocks of a UBI out from the cosmetic components, thereby clarifying which elements of a UBI shape implementation and which ones affect only the outward appearance.

https://taxprof.typepad.com/taxprof_blog/2018/04/fleischer-presents-the-architecture-of-a-basic-income-today-at-duke.html

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