Reducing Inequality: Merit Goods vs. Income Grants: Replies
Butler, Sean
BARBARA BERGMANN makes a good case for the priority of certain "merit goods" over cash grants—a position I think most basic income supporters would agree with— but her argument breaks down when...
...1: Work disincentive will eat into BI revenues...
...The flaw in her calculations is that she simply tacks on the cost of a basic income to the existing social expenditures of the Swedish state for both merit goods and cash grants...
...Objection No...
...2: Women will leave the labor market...
...Yet no one is seriously proposing that a basic income simply be added to unemployment or welfare benefits...
...A more sophisticated analysis of the tax data could produce a graduated tax that would reduce the rate for the lower and middle class...
...She assumes that these cash grants would remain undiminished under a basic income regime...
...Many of the societal effects of such a radical change as the introduction of a basic income are difficult to predict...
...3: Women, blacks, and immigrants will be stigmatized...
...BARBARA BERGMANN makes a good case for the priority of certain "merit goods" over cash grants—a position I think most basic income supporters would agree with— but her argument breaks down when she attempts to prove, through the example of Sweden, that merit goods and a basic income are mutually exclusive...
...4: Parents will lose control of their teenagers...
...Objection No...
...That's why I agree with Bergmann that a basic income should be phased in gradually...
...Then the greater economic freedom inherent in a BI could be compatible with greater gender freedom...
...This model I use for costing a basic income is in fact the same one used by my fellow Canadians S. Lerner, C.M.A...
...All the more reason, then, to put additional resources toward overcoming the real problem: that women are forced into domestic roles by societal pressure...
...I agree that this is a concern...
...Objection No...
...If we really are headed into a brave new world of worker obsolescence, we need to find another way of funding a BI (perhaps by taxing the use of common resources...
...Taking data from the 1999-2000 fiscal year, they determined that, out of total federal spending of $153.7 billion, $36.9 billion went as transfer payments to individuals...
...This might be too rosy a picture, but Bergmann paints a disingenuously bleak financial picture when costing a basic income...
...The provision of at least this level of merit goods is compatible with a basic income...
...Throughout all this, the many merit goods provided by Stockholm remain untouched...
...Clark, and W R. Needham in their book Basic Income: Economic Security for All Canadians, which I cited in my article...
...It is hoped that the universality of a BI will reduce the stigmatization experienced by people receiving means-tested benefits...
...That would still leave 4 percent of GDP for the state to augment the basic income of anyone in "special circumstances," and the 32 percent of GDP from earned income (and therefore work incentives) would remain unchanged...
...Because many basic income supporters justify a BI by arguing that jobs are becoming a thing of the past, it makes little sense to rely on employment taxes to pay for it...
...72 DISSENT / Winter 2006...
...To be sure, additional grants would still be needed by, for instance, parents or the disabled...
...Say, for argument's sake, that the full 15 percent of GDP needed to fund a basic income could be withdrawn from this 19 percent...
...On the contrary, many cash benefits could be replaced by a basic income...
...Most BI proposals, while paying households an income for each child, wouldn't give children control over the money until they reached some recognized age of maturity, such as twenty-one or slightly older...
...But much of the 19 percent of gross domestic product that Bergmann says flows from government to household consumption could likely be replaced by a basic income...
...DISSENT / Winter 2006 71 Such an intentionally simplistic model misses many details, but makes it clear that a basic income is still affordable to a country like Canada, which does not have as developed a welfare state as Sweden, but which nevertheless provides universal health care, decent assistance to post-secondary students, paid parental leave, and other merit goods...
...Because of space limitations, I'll limit my answers to Bergmann's other objections to a basic income grant: Objection No...
...Many feminists, such as Cindy L'Hirondell, Almaz Zelleke, Jililynn Stevens, and Carole Pateman, have written on why a BI would be good for women, but I agree with Bergmann that this could be an issue...
...My only major disagreement with her is about the time to begin that phasing in—I believe that it is now...
...Assuming that this nearly $37 billion is wholly replaced by a basic income that costs $198.6 billion, new federal spending would equal $315.4 billion, which could be paid for by a flat tax of 41 percent on personal income.* *Some people have misunderstood the authors' intention and assumed they were advocating a flat tax, when their proposal was merely hypothetical and for the purpose of furthering discussion...
Vol. 53 • January 2006 • No. 1
