“A Guaranteed Basic Income for All”. WNYC, 2016
Universal Basic Dividend
Dr. Trost prefers to refer to universal basic income as a universal basic dividend. This universal basic dividend by definition would be a direct cash payment that goes to all citizens regardless of merit or needs to provide for basic needs such as food, shelter, and/or clothing. He proposes that the government caps spending at 9% of the gross domestic product. When speaking about universal income with Bob Lawson from the school of business in Dallas, he objected on the basis of the nanny state and the income effect. He also claimed that it is not politically feasible. Dr. Trost plans on starting this process by pre-drafting a constitutional amendment proposing this universal dividend and finding three red and three blue states to pre-approve this amendment. This proposal involves sixteen percent of gross domestic product going to the universal dividend, a twenty-five percent flat tax, a one hundred and fifty percent retirement age premium, which would provide nine thousand dollars a year to each citizen, thirty-six hundred thousand dollars for a family of four, and forty-six thousand dollars for an elderly couple. This would dramatically shift the tax burden up, which I agree is a good idea in theory.
Benefits
I agree with the point made that a huge benefit of a universal basic dividend would be increased individual freedom. Especially after the pandemic, everyone's sympathy for those who are struggling financially has grown as many of us have experienced it ourselves. This proposal would provide immense freedoms like money to single mothers/fathers for daycare while working or money to those struggling too much physically or mentally to be able to carry out a career for a certain time period. Victims of domestic violence would have more opportunities to leave their situation because of the grip financial control has on them. It would also help employees in times of economic shock. Many jobs are unstable with frequent downsizing resulting from technological improvements and economic changes. This dividend would promote entrepreneurship. The government would no longer have to support certain industries or companies. With this as well as the possibility of the dividend being used to support startup costs for a new company, citizens could be self-employed while also stimulating the economy. These aspects are not currently supported by traditional benefits from programs. A universal dividend would provide some cushion for these workers automatically without the need for stimulus checks etc. All of these aspects in general would improve mental and physical health with money for access to better nutrition, sanitary environments, and reduced stress and depression rates.
Undone Incentives
However, if this tax burden is shifted up the incentive to make more money or work harder is lessened. This argument against universal basic income as a disincentive to work is a valid concern of mine. This disincentive comes with a mentality of entitlement. If the government is supplying income to those who need it along with those who may not, citizens will start to feel like they not only rely on the government but that they unconditionally deserve and are owed this assistance. Dr. Trost claims that if this plan was enacted in replacement of existing welfare programs it will be more affordable. However, I'm not sure if I can agree with this statement. I think that any plan starts out realistic and affordable, but as time goes on the narrative will keep increasing if it does start out successful. With this incentive from new success, the proposal will be pushed further and further until it is unattainable. I don’t think a UBD can be this easily accessible nationwide without other issues arising. Although this strategy would provide individual freedoms, citizens would come to rely on the government more. This increased governmental role in day-to-day life is what I believe we should be moving away from. Dr. Trost makes the claim that people would spend the money based on their own priorities regardless of whether the money was earned or given. I completely agree, but the question is whether the majority of impoverished people would have the priorities that would benefit the nation overall or if this dividend would be like placing a band-aid over a bullet hole. All in all, a universal dividend does not address the true causes of poverty rates in our nation. Poverty is caused by poor education, alcoholism and addiction, abuse, and/or health issues. Many of these deep roots are generational, not situational, and cannot be corrected by the simplicity of money alone.