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A basic income (also called basic income guarantee, unconditional basic income, universal basic income or citizen’s income) is a proposed system of social security in which citizens or residents of a country regularly receive a sum of money unconditionally from the government. This is distinct from guaranteed minimum income, which may be conditional upon participation in the labor force or other means testing. A basic income of any amount less than the social minimum is sometimes referred to as a 'partial basic income'.
Basic income and traditional welfare systems both share goals of achieving some level of economic equity. Guaranteed income typically operates by 'topping up' deficient wages - which itself typically relies on the assumption of some level of participation in the labour force - whereas basic income is paid to all irrespective of income or other eligibility criteria.
Some speculate that misunderstanding basic income and guaranteed income as essentially similar concepts may be an intentional misunderstanding, defensively positing that if basic income can be misunderstood as something with major flaws, then it can be forever avoided.
The Basic Income Earth Network (BIEN) describes one of the benefits of a basic income as having a lower overall cost than that of the current means-tested social welfare benefits., and they have put forth proposals for implementation they claim to be financially viable.
One critical view of Basic Income theorizes that it would have a negative effect on work incentive and labor supply. Even when the benefits are not permanent, the hours worked—by the recipients of the benefit—are observed to decline by 5%, a decrease of 2 hours in a typical 40 hour work week, in one study:
While experiments have been conducted in the United States and Canada, those participating knew that their benefits were not permanent and, consequently, they were not likely to change their behaviour as much or in the same manner had the GAI been ongoing. As a result, total hours worked fell by about five percent on average. The work reduction was largest for second earners in two-earner households and weakest for the main earner. Further, the negative work effect was higher the more generous the benefit level.
However, in studies of the Mincome experiment in rural Manitoba, the only two groups who worked less in a significant way were new mothers, and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling. Under Mincome, "the reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women."
Another study that contradicted such decline in work incentive was the Namibian pilot project implemented in 2008 and 2009 in the Omitara village; the assessment of the project after its conclusion found that economic activity actually increased, particularly through the launch of small businesses, and reinforcement of the local market by increasing households' buying power.
A frequent objection to basic income is the lack of reciprocity due to the unconditionality of basic income.
The U.S. has an earned income tax credit for low-income taxpayers. In 2006 a bill written by members of the advocacy organization USBIG to transform the credit into a partial basic income was introduced in the US Congress but did not pass.
The U.S. State of Alaska has a system which provides each citizen with a share of the state's oil revenues, although this amount, $878.00 for the whole of 2012, is far from enough to live on. The Alaska basic income is subject to income tax on the federal level. That way the "basic income" works like a negative income tax but with a "prebate" instead of a "rebate" (as far as state finances are concerned).
Negative income tax is a form of guaranteed/minimum income, and not basic income. In a negative income tax system, people earning a certain income level would owe no taxes; those earning more than that would pay a proportion of their income above that level; and those below that level would receive a payment of a proportion of their shortfall, which is the amount their income falls below that level. Thus, those who earn less than the poverty line would be provided with a supplement, but still end up below the poverty line.
|This section requires expansion. (July 2013)|
From January 2008 to December 2009, a pilot project with a basic income grant was implemented in the Namibian village of Omitara (or Otjivero-Omitara) by the Namibian Basic Income Grant Coalition. It was mainly funded by a German Protestant church, by individual contributions of German and Namibian citizens and by contributions of the German Ministry for Cooperation. The amount paid out per head was N$ 100 (around US$ 12).
Six months after the launch, the project has been found to significantly reduce child malnutrition and increase school attendance. It was also found to increase the community's income significantly above the actual amount from the grants as it allowed citizens to partake in more productive economic activities. The project team states that this increase in economic activity contradicts critics' claims that a basic income would lead to laziness and dependency.
After the conclusion of the pilot project phase, a monthly bridging-allowance of N$ 80 (around US$ 10) to all who participated in the pilot was paid regularly until March 2012. One of the conclusions of the project was that, even with the restriction that only residents of the village for over a year since the pilot's start could benefit from the grant, there was a significant migration towards Otjivero-Omitara, despite the fact that the migrants wouldn't receive the grant. The project concluded that this phenomenon reveals the need to introduce such basic income systems as a universal national grant, in order to avoid migration to particular regions, towns or households. Another finding of the project was that after the introduction of the pilot, overall crime rates fell by 42%, and specifically stock theft fell by 43% and other theft by nearly 20%.
The above-mentioned conclusions about the effects of the project in Omitara have been derived from two empirical studies conducted by the Basic Income Grant Coalition: one study that covers the first 6 months of the project and a second study about the first 12 months of the project. No further empirical studies or project assessments have been published.
There is no public access to the project database. In a Namibian daily, the project representatives confirmed the lack of public access to their data and justified it.
The design of the project and the conduct of the empirical studies have been criticized by some authors for intransparent procedure and inappropriate methods.
The Government of the Republic of Namibia has repeatedly argued against the introduction of a Basic Income Grant and has not changed its mind during and after the pilot project.
In May 2012, the community leader of Otjivero-Omitara, Ernst Gariseb, told a journalist of a Namibian newspaper: "Since two decades we are sitting here without work, development and perspectives." The journalist concluded: "Despite the support of the BIG there is not any development to be seen in Otjivero."
In 2011, Iran implemented a basic income grant in order to compensate risen prices of basic goods such as petrol and food. A first assessment of the experiences in Iran is provided by H. Talabani (2011).
An independent and privately funded pilot project is currently in place in Brazil. It provides R$30 monthly which is 4.4% of the minimum salary in 2013 (as defined by the federal government) and is not enough to meet basic needs.
|It has been suggested that Basic income in India be merged into this section. (Discuss) Proposed since August 2013.|
Two basic income pilot projects have been underway in India since January 2011. According to the first communication of the pilot projects, positive results have been found. Villages spent more on food and healthcare, children's school performance improved in 68 percent of families, time spent in school nearly tripled, personal savings tripled, and new business startups doubled.
In many countries, there are politicians, academists, philosophers advocating for a basic income. Several of the following advocates have actually proposed a negative income tax, which is means tested, rather than a basic income. Despite their differences in administration and effect, the two proposals are usually conflated.
One of the world's outspoken advocates of a basic income system is the Belgian philosopher and political economist Philippe van Parijs. Other advocates include Gunnar Adler-Karlsson (Sweden), Götz Werner (Germany), Saar Boerlage (Netherlands), Herwig Büchele (Austria), fr:Yoland Bresson, André Gorz (France), Michael Hardt and Antonio Negri, Charles Murray (USA), Keith Rankin and Gareth Morgan (New Zealand), es:Daniel Raventós (Spain), Osmo Soininvaara (Finland), Guy Standing (UK), Eduardo Suplicy (Brazil) and Walter van Trier (Belgium).
Many socialists have advocated a form of basic income or a social dividend as a means for distributing the economic profits of publicly owned and state-owned enterprises. These include economists Oskar Lange, Abba Lerner, John Roemer, James Yunker and James Meade.
In his final book Full employment regained? James Meade states that a return to full employment can be achieved only if, among other things, workers offer their services at a low enough price, that the required wage for unskilled labour would be too low to generate a socially desirable distribution of income, and that therefore a citizen's income would be necessary. James Meade advocated for a social dividend scheme funded on the returns of publicly owned productive assets.
Basic income has been promoted by people associated with political views that are generally opposed to the public provision of welfare services, such as libertarianism, economic liberalism, and anarcho-capitalism. These people support basic income as a strategy to reduce the amount of bureaucratic administration that is prevalent in many contemporary welfare systems, as well as acting as a form of compensation for fiat currency inflation. Notable libertarian-capitalist proponents of basic income include Milton Friedman (in the form of negative income tax), Robert Anton Wilson, Gary Johnson (In the form of the fair tax "prebate") and Charles Murray.
It is clear, however, that Friedrich Hayek did not advocate that any modern nation act to implement a minimum income. This was a concept that he attributed to his "Great Society," which was his Utopian liberal society, in the classical sense. Hayek emphasized a minimum income in the far future, and stated clearly that no wealthy countries such as the United States should guarantee any income not available to all around the world, as it would attract mass immigration and overwhelm the procedure:
Many of the people mentioned above have united in the Basic Income Earth Network, which recognizes numerous national advocacy groups. Here is a breakdown of all partisans of basic income, listed by region or country.
Geolibertarians seek to synthesize propertarian libertarianism and a geoist (or Georgist) philosophy of land as commonly and equally owned by all people, citing the classical distinction between unimproved land and private property. The rental value of land is produced by the labors of the community and, as such, rightly belongs to the community at large and not solely to the landholder. A land value tax (LVT) is levied as an annual fee for exclusive access to a section of earth, which is collected and redistributed to the community either through public goods, such as public security or a court system, or in the form of a basic guaranteed income called a citizen's dividend. Geolibertarians view the LVT as a single tax to replace all other methods of taxation, which are deemed unjust violations of the non-aggression principle.
In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.
In the 1972 presidential campaign, Senator George McGovern called for a 'demogrant' that was very similar to a basic income. In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income (ISBN 978-0-394-46354-4) in which he advocated for the Basic Income and discussed Richard Nixon's GAI proposal.
Mike Gravel, a former US congressman and presidential candidate, advocates a tax rebate paid in a monthly check from the government to all citizens as part of a transition away from income taxes and toward a pre-bated national sales tax (the FairTax).
Richard Parncutt argues that income tax is effectively progressive when basic income is combined with flat income tax. The combination would simplify the tax-welfare system.
Ben Wallace argues, in The Common Purpose Manifesto, that a shared base income, incorporating an unconditional basic income with a flat 50% tax rate, is necessary to correct the inevitable income inequalities that arise in free and open markets.
In Oregon, Tax and Conversation is a member-owned organization working to end all tax exceptions via a ballot measure (the initiative process requires 50% of voters plus 1 person to vote yes for it to become law) for 2014. 66% of all dollars from current tax expenditures go to only 20 out of every 100 people with the most money (paid tax on income after exceptions is regressive), and that money would instead be paid unconditionally: each full-year taxfiler will get $700 each month. The total expenditure amount would be slightly less than the current expenditure amount of $24 billion each year, because core government services will get more funding.
The Green Party of the United States 2010 platform advocated for "a universal basic income (sometimes called a guaranteed income, negative income tax, citizen's income, or citizen dividend). This would go to every adult regardless of health, employment, or marital status, in order to minimize government bureaucracy and intrusiveness into people's lives."
|This section is incomplete. (January 2013)|
The Basic Income Earth Network, first called "Basic income European Network" (BIEN) until 2004, was the first international organization trying to promote basic income internationally. It gathered essentially a group of researchers and economists working on the topic. BIEN recognizes numerous national advocacy groups, and coordinates international communication through its newsletter and a biannual congress.
Following a number of meetings in different cities in Europe (Vienna 2005, Basel 2007, Berlin 2008, Herzogenrath 2009, and Vienna 2011), several organizations such as the German Round-table for basic income have decided to work together for promoting basic income at the European level. In Vienna (2011) they agreed on the preparation of a European Citizens' Initiative.
On 14 January 2013, the European citizens' initiative registration was accepted by the EU commission, thus triggering a 12 months aiming at collecting more than one million signatures in the European Union.
Historically in Belgium, the most active group promoting basic income is the movement Vivant and the philosopher Philippe Van Parijs - who founded the Basic Income European network (BIEN) in 1987. A Belgian basic income network affiliated to the BIEN was founded in 2012 in Brussels
The first bigger discussion on universal basic income in the Czech Republic was iniciated by philosophers and social scientists cz:Marek Hrubec and Martin Brabec. Later, they published with Philippe Van Parijs a book "Všeobecný základní příjem. Právo na lenost, nebo na přežití?" ("Universal Basic Income. Right to Laziness, or Right to Survival?"). In 2013, activists and social scientists joined the European Citizens' Iniciative for Unconditional Basic Income, and have created a campaign to support unconditional basic income. In the Czech Republic, unconditional basic income is supported by many individuals, NGOs (Alternativa zdola, ProAlt, Levá perspektiva, for example), and political parties. It in the program of the Green Party, the Communist Party, the Pirate Party, and the Party of Democratic Socialism. It is supported also by many Social Democrats.
In France, the first prominent defender of basic income is Yoland Bresson. In 1985, he founded the "Association pour l'Instauration d'un revenu d'existence" with Henri Guitton (fr) for promoting basic income in France, and co-founded the BIEN the year after. Another prominent advocate of basic income is the philosopher André Gorz, who finally endorsed the idea after having been an opponent for years.
On the political side, the Christian democrat Christine Boutin, the former prime-minister Dominique de Villepin, are the most well-known politicians claiming for basic income, along with some MPs like Karima Delli, Jean Desessard and Yves Cochet.
The very influential think tank fr:Centre des Jeunes Dirigeants (CJD) ("Young policymakers trust") also call for a basic income of 400 euros per citizen. The CJD's and Christine Boutin's basic income proposals are based on Marc de Basquiat financing model, which demonstrates a way of financing a basic income of 400 euros for every adult and 200 per child, while other advocates such as Baptiste Mylondo and Jacques Marseille promote a "high enough" basic income, around 750 euros. However, unlike Mylondo and Marseille, De Basquiat's model doesn't reduce any pension, housing or unemployment benefits.
In 2012 a group of citizens launched a transpartisan network in an attempt to join forces for raising awareness about basic income in France. This network aim at participating to the European citizens initiative that is set to be launched in 2013.
One of the most prominent proponents of basic income in Germany is Götz Werner, the former CEO of the store brand DM Drogeriemarkt, and one of the richest men in Germany. He also teaches economics at the Karlsruhe Institute of Technology.
The generalization of workfare policies known as "Hartz reforms" have encouraged a broader movement for basic income in Germany.
In 2008, a petition launched by Susanne Wiest was supported by more than 52,973 citizens, thus offering the German activist a hearing at the Bundestag, which helped to enlarge the public debate on the idea.
The German Pirate Party has officially endorsed basic income since 2011. Inside the Christian Democratic Union, Dieter Althaus proposes a basic income model. A group led by Katja Kipping also promotes basic income inside the leftist party Die Linke. In addition, inside the Social Democratic Party of Germany, the Rhein-Erft-group favors basic income since 2010. Within The Greens there are also a large number of advocates.
Though the idea of basic income is not well known in Greece, several economists have worked on the topic. In 2010, the liberal party Drasi supported a proposal for a basic pension scheme, aiming at simplifying the hundreds of pension schemes in a country being hurt by the debt crisis and pressured by the troika to balance its public budget. Manos Matsaganis and Chrysa Leventi co-authored a study that demonstrate the feasibility of such a proposal.
Other heterodox proposals suggest that a Greek exit from the eurozone could be an opportunity to implement a "monetary dividend" for every Greek citizen as a way to manage the financial collapse of the country.
The issue of the basic income gained prominence on the political agenda in Netherlands between the mid-1970s and mid-1990s but it has disappeared from the political agenda over the last fifteen years.
Since 2001, the es:Red Renta Básica is the national network affiliated to the BIEN. It gathers researchers and activists for basic income. From 2011 to 2012, the 15-M Movement also contributed a lot in spreading the idea among the Spanish society.
The association BIEN-Switzerland (affiliated to the Basic Income Earth Network) promotes basic income in the francophone part of Switzerland. In the German-speaking part of Switzerland a group called "de:Initiative Grundeinkommen" is very active in promoting basic income.
In 2008, Daniel Häni and Enno Schmidt produced The Basic income, a cultural impulse, a movie that explains and praises the idea of a basic income. With more than 400,000 views, the movie went viral and contributed a lot in spreading the idea among French and German speaking countries.
In September 2013, the initiative achieved the collection of about 126,000 signatures and handed them over to the government on October 4 thereby triggering a nationwide popular referendum, which would be the first of its kind on this issue, anywhere in the world. The trade union de:Syna brought its support for this initiative.
"The Citizen's Income Trust promotes debate on the desirability and feasibility of a Citizen's Income by publishing a newsletter and other publications, maintaining a library of resources, and responding to requests for information."
Co-founder of the Basic Income Earth Network, the professor Guy Standing is a famous advocate of the unconditional basic income. In his book The Precariat - the new dangerous class, he blames globalization for having plunged more and more people into the precariat, which he analyses as a new emerging social class. He concludes on the necessity for "governments to provide basic security as a right" - through a basic income.
Basic income - called Feltétel Nélküli Alapjövedelem (FNA) in Hungarian (unconditional basic income) is supported by the FNA Group, which held its first active-team-meeting was in Hungary/Budaörs, May 31. 2011. Basic income is also endorsed by the Hungarian pirate party.
Affordability of a basic income proposal is a function of the social/government services it replaces, any tax increases, and the less tangible positive effects on spending and tax receipts associated with wealth redistribution towards the poor, and any social savings as a result of less crime, or fewer incarcerable offenses.
Specific, though informal, measurements were made by Pascal J. for Canada. A 2004 taxable basic income benefit of $7800 per adult could be afforded without any tax increases by replacing welfare, unemployment, and core Old age services. (Canada has supplemental poverty old age programs and pension system). The number excludes any intangible benefits of tax revenue increases due to higher spending and lower personal savings, and any expenditure savings on criminal enforcement.
To estimate affordability of basic income in the US, the starting point of 265M adult citizens and $6.3 Trillion in estimated federal, state, and local government spending means that replacing all US government spending can provide nearly $25k per citizen in basic income. Several people have used the simplicity of a flat tax to demonstrate affordability. Someone has even hosted a UBI calculator.
Naturalfinance.net estimates that by cutting the $1.85T spent on social security and welfare in the US, $9905 can be given to each adult American citizen as a taxable basic income benefit From the same paper, it is noted that basic income can also be funded through monetary policy. Instead of printing money for direct bank funding, money is printed to give directly to citizens who then spend it in the economy and fund banks indirectly through deposits. Monetary policy has never been used in this manner, but the paper claims there is no underlying economic reason it cannot be used as a partial or full basis for funding basic income.
Several sources of funding have been proposed for hypothetical socialist (public or common ownership of the means of production) economic systems:
Many different sources of funding have been suggested for a guaranteed minimum income for non-socialist economic structures:
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