[LINK] "Basic income—a radical idea for eliminating poverty"

[rfmcdonald]

The Dragon's Tales linked to Atif Kukaswadia's Phys.org blog post introducing readers to the idea of a basic income, or a guaranteed minimum income.

I imagine most of my readers have never heard of Dauphin, Manitoba. A small, farming community in Canada, Dauphin is a town that was part of an experiment back in the 1970s. The "mincome" project was launched in 1974, and offered everyone a minimum income. Unfortunately, the project was shut down in 1979 with a change in the government, and so the effects weren't long term enough. The purpose of the mincome project was to see what would happen if a "top up" was offered to everyone. Dr. Evelyn Forget has been studying records from those years, and following up on people to see how it impacted their life. Would people stop working? Would there be higher rates of employment? How would people respond?

But lets start from the top. What is a minimum income? Currently, there are two main models for a minimum income – the universal basic income (UBI), and the negative income tax (NIT). They're similar, but also slightly different in how they're implemented. A negative income tax basically gives you money to top you up to a certain among, after which point you start getting taxed. However, this has problems, such as how often would your income be evaluated? If it was only annually, then someone could be unemployed for a year or more before they receive their minimum income payments. More frequently would be better, but would also be more challenging to implement. The other alternative is a universal basic income, which gives every adult a monthly cheque regardless of income. At the end of the year, this would be included in taxable income. This is also problematic: primarily because of the high costs up front, plus the optics of giving everyone a cheque, including those who do not need it (Huffington Post).

One of the first questions people have when I mention a minimum income is what's to stop people from working. Well, the current model of welfare doesn't incentivize work – once you earn over a certain threshold, you are no longer eligible. So there's a hard cut off before which point there's no reason to work. Under a minimum income model, you are not penalized for working more, and instead the supplement is taxed at a certain rate (often suggested to be 50% for every dollar you earn), up until a certain amount. So there's always an incentive to work[.]