Friday, November 15, 2013

guaranteed minimum income

Hey, maybe it's more politically feasible than I'd hoped! Switzerland is considering a minimum income program!

The major, supremely disappointing thing about that article is the lack of any mention (in fact, an implication to the contrary) of implicit marginal tax rates. It's not that hard to talk about without economics jargon that it can conscionably be omitted from a new york times article on the topic.

The reason I like the idea of a guaranteed income (for everyone, no matter how rich or poor) as the social safety net is exactly because* it solves the problem of the perverse incentives to not work harder, not maintain financial stable relationships, not take care to only have children you can afford to take care of, etc, introduced by the patchwork of welfare programs that currently exist. Poor Americans have less incentive to work harder than anyone else, because the more money they make the fewer benefits they get from the government. Talk about a backasswards approach to the social safety net. A guaranteed income for everyone doesn't introduce the same perverse incentives.

(Unfortunately it seems like the Alberta experiment was still based on income, so it's not actually a guaranteed income policy at all. I hope to god that Switzerland tries it out and does it right.)

*at least, economically speaking. Morally speaking I also strongly prefer welfare policies that don't inadvertently punish responsibility... and of course, those two reasons are intimately related.

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