There have been proposals to replace welfare, perhaps Social Security, both Retirement and Disability with a Basic Income that would be provided to all adult American citizens along with repeal of the minimum wage. The idea is that every adult citizen would receive a basic monthly check from the federal government that would equal over a year the federal poverty level, currently $11,490. Or divided into monthly checks, $957.50. This would replace all other welfare and entitlement programs where people are given a check by “Uncle Sam”. As there are roughly 150 million adult citizens, that would mean a yearly expenditure of over $1.7 trillion dollars. Which is actually pretty close to our total welfare and Social Security expenditures along with things like the EITC. Of course the real problem is how do we finance such a program? The easiest way would be a 2% automated financial transaction tax placed on all financial transactions by Americans. However a financial transaction tax does affect the level of financial transactions to some degree. Certain financial transactions might no longer take place because it is no longer profitable to do them. The effect is minor at low percentages, but increases with the level of the tax placed upon financial transactions. The effect is one of diminishing returns. Selling a stock to gain a few percentage points wouldn’t make sense if the actual profit from the act didn’t gain you anything. This is something we need to consider when we are considering using an automated financial transaction tax to replace all other taxes. On the other hand the automated financial transaction tax has less adverse effects upon the economy than income taxes, capital gains taxes, sales taxes, value added taxes, etc. The cost of home ownership would be less without property taxes. However relying on the financial transaction tax to replace “all” taxes and also provide for a Basic Income system means that the tax rate would have to be in the range of 5%, which would have a definite effect, although just what it would be is difficult to say without living with one.
The social and economic effect of a Basic Income is that employers have to offer a sufficient “incentive” to get people to work for them depending upon the nature of the work required. Some jobs are “easier” than others. A job that is more “demanding” will require a higher wage than a job that is less demanding. Security guard companies probably won’t have as much difficulty obtaining part time workers than would employers who require more physical effort. Higher wages would be needed in such cases. In the study by Charles Murray there was also an issue of health insurance. Which is less of a problem when people can take care of most health issues themselves. Without prescription laws, there is no need to obtain a doctor’s expensive “permission” to buy medical drugs to treat conditions such as high blood pressure, high cholesterol, or non-insulin dependent high blood sugar. As a matter of fact, those suffering from Type Two diabetes have a problem in that their pancreas no longer make enough insulin to deal with the carbohydrate “burden” they are placing on their pancreas. Either the amount of carbohydrates must be reduced (the basis of the famous Atkins Diet) or additional insulin must be taken to control the level of blood sugar if the pancreas is still functional. The Atkins Diet is a diet that restricts carbohydrate consumption, replacing it with a meat and vegetable diet. It is generally used for weight loss, but will also serve to control Type Two Diabetes in many cases. Outside of infections, blood pressure control and cholesterol control along with blood sugar levels are generally things that doctors will consider in determining your health. In a Libertarian society these would likely be things that people would consider their responsibility to take care of. Also, as insulin is an expensive drug, being able to control diabetes without insulin becomes important. As health care will cost considerably less in a Libertarian society, those on the Basic Income plan will no doubt make efforts not to need medical care if they can avoid doing so…
From the standpoint of employers, the lack of a minimum wage under the Basic Income plan means that the cost of labor is reduced. Many workers of course would be part timers and would rely upon the Basic Income for much of their support. There would also be self employed people on the Basic Income, people perhaps providing services, but not enough to actually earn a living off of it. Since we are discussing a Libertarian society here, there will be “jobs” available that today don’t exist because of restrictive laws which effectively create costly monopolies forcing consumers to pay higher prices. There are also various arts and crafts that have value, but don’t provide a living for those performing them. In fact, under a Basic Income, there will be more “help” available to those who need it simply because many such jobs don’t provide enough income to live on. Or are limited by the seasons so that a person’s yearly income is too low to make working in that field worthwhile. Plus if people are less “rushed”, we will see people walking, riding bicycles, etc., instead of driving a car. Plus there will likely be more people who will be “politically active” when it is no longer necessary to work a 40 hours a week job. Then too, people will have more time available to assist seniors and the disabled than we have now. So there are definite social benefits to a Basic Income.
There will of course be those who will oppose the idea of a Basic Income on the basis that people will refuse to do certain jobs that no one enjoys doing, but which have to be done. Plus the power of an employer to get people to do unpleasant tasks will be more difficult. Most likely such tasks will require higher pay than what employers today are used to. The topic does deserve further study, and I plan to learn more about it if I can do so.