With the COVID-19 pandemic, there have been calls to establish a universal basic income (UBI).
See, for example, this article by Guy Standing in The Economist:
Andrew Yang also made it a centerpiece of his campaign for the Democratic nomination.
Here is my reaction:
1. I am in favor of a guaranteed minimum income, as it is applied in some European countries (France, Germany, and more recently, Spain).
2. This income should be given to those who earn less than the minimum income (which, in turn, should be less than the minimum wage - let’s say 70 % of the minimum wage). It should not be given “to all individuals, regardless of income”, as the article proposes.
3. I am more favorable to an “earned income credit” as applied in the United States, that provides an extra-income to low-income workers. This is better, as it creates incentives for working.
4. I am not in favor of increasing capital taxation (beyond reverting the Trump tax cuts).
5. I am in favor of a wealth tax (or equity tax), levied especially on those with a net worth above $1 million (excluding their residence). Though some decry the wealth tax as distorting, in fact it is applied in several “capitalist” countries (such as Norway, Switzerland, Netherlands and Spain). Many other countries, including the United States, have the “property tax”, focused on real estate, and which does NOT exclude the residence or properties below a certain threshold.
6. A wealth tax would compensate those workers who have lost their jobs due to automation (in many cases, increasing the wealth of the billionaires, such as Amazon’s Bezos).
7, Even though I would benefit, I am not in favor of continuing to hand out "stimulus checks" to most of the population. It is much more important to extend the additional unemployment benefit, which should replace most of the pre-pandemic income.
8. Developing countries, such as Ecuador, cannot afford to provide a generous minimum guaranteed income (although Ecuador currently does provide a cash transfer of $60 to most low-income families). I would propose eliminating the fossil fuel subsidies altogether (they have been substantially reduced by the Correa and Moreno governments), and, in its place, increasing the cash transfer (Bono de Desarrollo Humano) and guaranteed minimum pension (even for those who did not contribute to the social security system).
9. A carbon tax (a tax on greenhouse gas emissions) would be the best source to fund a minimum guaranteed income.
Here is an article by Paul Buchheit making a similar argument:
Photo: Yuri Keegstra/Flickr/cc
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