Promoting freedom, innovation, and growth

Connect with IPI

Receive news, research, and updates

June 6, 2016

The Swiss Said No To A Guaranteed Income - Conservatives Should Too

  Rare

The Swiss on Sunday defeated a proposal to provide every adult a guaranteed monthly income of 2,500 Swiss francs ($2,555), and 625 Swiss francs for every child.

The vote wasn’t even close: only 23 percent of the voters supported the proposal.

But while a guaranteed basic income may be dead in Switzerland, at least for now, Finland is considering a pilot program that would provide 10,000 working-age adults with about 550 Euros a month for two years, beginning in 2017, according to Reuters.

And the idea might be coming to the U.S. soon.

No one should be surprised that Democratic presidential candidate Bernie Sanders supports the idea, but some on the conservative side are also backing it as well.

Tim Worstall, a Forbes contributor and fellow at the London-based Adam Smith Institute, points out that none other than Charles Murray has written favorably about a guaranteed basic income in his book In Our Hands. And Worstall himself seems favorably disposed.

Liberals see a guaranteed income as a way of achieving their goal of putting everyone on the government dole. Conservative supporters, strangely, see it as a way of decreasing the size of government. Stay with me here…

Conservatives correctly point out that the modern welfare state is staggeringly bloated, fraud-prone, and inefficient. There are multiple, overlapping programs, and almost every one of them is the target of scams.

So, these conservatives reason, end the panoply of programs and give everyone a guaranteed income—Murray decides on $10,000 for every adult.

The idea would have a little more resonance if it were means-tested so that only lower-income families received it. And even more if recipients were required to do some kind of work to receive the benefits. But including both of those requirements turns the idea into “workfare” and keeps at least some of the welfare-state infrastructure intact.

But why should middle- and upper-income families pay more in taxes—since they are the ones whose taxes would fund the program—only to get part of it back in the form of guaranteed income? Proponents say there wouldn’t be the need for new taxes because the program could be essentially funded with money currently spent on the welfare state.

But why would any conservative think that liberals would be satisfied if a guaranteed income plan replaced all the current welfare programs? Liberals would immediately begin to agitate for new initiatives, claiming that the basic income wasn’t enough and left too many people vulnerable.

And they would likely get those programs passed, so we’d have both a guaranteed income AND the welfare state.

It’s true that the U.S. welfare system must be reformed, and providing cash benefits—what economist Milton Friedman called a Negative Income Tax—as opposed to a range of overlapping welfare programs is the right way to go. But those benefits should be temporary, means-tested, and provided only if the beneficiaries work.

The Swiss rejected a guaranteed basic income, and the U.S.—and especially conservatives—should do so too.


 

  • TaxBytes-New

Copyright Institute for Policy Innovation 2017. All Rights Reserved Privacy Policy Contact IPI.

e-resources e-resources