Harvard
dropout and Facebook billionaire Mark Zuckerberg recently gave the
commencement address at Harvard. In his speech he proposed a “universal basic
income to make sure everyone has a cushion to try new ideas.”
But Zuckerberg is not alone.
First it
was Milton Friedman, then it was Charles Murray, and then it was Matt Zwolinski. Now it is Michael Tanner and Jesse Walker. Why are some libertarians even
talking about a universal basic income or a guaranteed minimum income? Why are
some libertarians trying to be efficiency experts for the welfare state?
We already have a universal basic income. It is called welfare.
There are in the United States about eighty means-tested welfare
programs. These are programs that limit benefits or payments based on the
beneficiary’s income and/or assets. There are also welfare programs that most
Americans have never heard of. And there are other welfare programs that most
Americans don’t consider to be welfare programs.
Welfare is welfare, no matter what it is called and no matter
what people think about.
The elderly have Social Security and Medicare.
The
elderly poor also have access to the Elderly Nutrition Program and the
Commodity Supplemental Food Program (CSFP).
The disabled have Supplemental Security Income (SSI), and are
also eligible for Social Security and Medicare.
The poor have Medicaid, the Supplemental Nutrition Assistance
Program (SNAP [formerly known as food stamps]), section 8 housing vouchers,
Temporary Assistance to Needy Families (TANF), the Low Income Home Energy
Assistance Program (LIHEAP), subsidized phone service, community health
centers, public housing, and family planning programs.
Hungry children have school breakfast and lunch programs.
Low-income taxpayers have refundable tax credits like the Earned
Income Tax Credit (EITC), Additional Child Tax Credit (ACTC), and the American
Opportunity Tax Credit (AOTC).
The unemployed have free federal job training programs.
Those who get laid off from their jobs have unemployment
compensation.
Low-income pregnant women and new mothers have Healthy Start and
Women, Infants, and Children (WIC).
Low-income students have Pell Grants and all students have
access to federal student loans.
Farmers have farm subsidies.
Refugees
have assistance programs.
Homeowners have low-cost federal flood insurance.
All parents can send their children to public schools at no
cost.
Let’s take a closer look at just one of the above welfare
programs: the EITC.
Unlike regular tax credits, refundable tax credits are a form of
welfare. A regular tax credit is a dollar-for-dollar reduction of the amount of
income tax owed. Tax credits may reduce the tax owed to zero, but if there is
no taxable income to begin with, then no credit can be taken. A refundable tax
credit is treated as a payment from the taxpayer like federal income tax
withheld or estimated tax payments. If the tax credit “payment” is more than
the tax owed after the regular tax credits are applied, then the “taxpayer”
receives a refund of the money he never actually paid in. The money is simply
taken from real taxpayers and transferred to him.
According
to the IRS:
The Earned Income Tax Credit, EITC or EIC, is a benefit for
working people with low to moderate income. To qualify, you must meet certain
requirements and file a tax return, even if you do not owe any tax or are not
required to file. EITC reduces the amount of tax you owe and may give you a
refund.
For the
tax year 2016, the maximum EITC amounts are:
$6,269 with three or more qualifying children
$5,572
with two qualifying children
$3,373 with one qualifying child
$506 with no qualifying children
To qualify for the EITC, if one is single,
earned income and adjusted gross income (AGI) must each be less than $14,880
(no children), $39,296 (1 child), $44,648 (2 children), or $47,955 (3 or more
children). For married taxpayers, the amounts are $20,430 (no children),
$44,846 (1 child), $50,198 (2 children), $53,505 (3 or more children).
If one has three children, the sweet spot to receive the maximum
EITC is achieved when one has income of at least $13,900 but less than $18,200
(single) or $23,750 (married). And don’t think that people receiving the EITC
don’t have some idea of this.
Americans
who receive the EITC get another added benefit as well. According to page
58 of the IRS’s 1040 instructions for 2016:
Any refund you receive as a result of taking the EIC can’t be
counted as income when determining if you or anyone else is eligible for
benefits or assistance, or how much you or anyone else can receive, under
any federal program or under any state or local program
financed in whole or in part with federal funds. These programs include
Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Security
Income (SSI), and Supplemental Nutrition Assistance Program (food
stamps). In addition, when determining eligibility, the refund can’t be counted
as a resource for at least 12 months after you receive it. Check with your
local benefit coordinator to find out if your refund will affect your benefits.
Every poor
person and every low-income individual in America already has access to a
universal basic guaranteed minimum income.
The problem with a guaranteed minimum income, like the problem
with welfare in general, is that it is the government that is the guarantor.
But before the government can give, it must first take from productive members
of society. This is what makes all welfare immoral.
Libertarians who talk in any way about a universal basic income
should make the immorality of welfare the central theme, not an afterthought.
Welfare doesn’t need to be reformed, improved, changed,
replaced, fixed, saved, revamped, simplified, trimmed, or made more effective
or efficient. It doesn’t need to have more stringent enrollment requirements,
it doesn’t need drug testing for recipients, it doesn’t need stronger work
requirements, and it doesn’t need time limits. It needs to be completely
eliminated in its entirety, and all the government bureaucrats that administer
welfare programs be laid off, not reassigned. The welfare state doesn’t need
libertarian efficiency experts. It needs to be destroyed root and branch.
Laurence M.
Vance [send
him mail] writes from central Florida. He is the author of The War on Drugs Is a War on Freedom; War, Christianity, and the State: Essays on the Follies of
Christian Militarism; War, Empire, and the Military: Essays on the Follies of
War and U.S. Foreign Policy; King James, His Bible, and Its Translators, and
many other books. His newest book is Gun Control and the Second Amendment.
Visit his
website.
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