The Basic Income Should Not Replace All Other Programs

Danny Vinik has been writing about the basic income over at Business Insider, most recently proposing that Paul Ryan get behind the idea. In Vinik's construction, a basic income should replace all other government programs. This is not my view and it should not be your view either.

Before we embark upon the question of policy construction, we must first determine what it is we are trying to do. What is our broad normative goal? As an egalitarian, I am someone that thinks we should construct our economic institutions so as to generate outcomes that are as equal as possible. You may disagree with this view and think instead that we should construct economic institutions that generate distributions in line with some marginal productivity ethic, moderated by a minimal social floor that eliminates very significant low-end hardship.

In either case, you have to determine what your unit of distributive comparison is. Should we look simply at dollars? Should we look at Rawlsian primary goods? Should we look at Senian capabilities?

I tend towards Senian capabilities, which is to say what we should be looking to when we consider distributive questions is capabilities, not just money. So for instance, a capability would be something like being able to move around the world, being able to work, being able to have decent housing, being able to have decent nourishment, and so on. Crucially, different people need different amounts of dollars (or social resources) to achieve specific capabilities.

For instance, a disabled person might need more dollars to achieve the capability of being able to move around the world if they require a wheelchair or some other assistance. Giving that person the same number of dollars as someone who does not have such a disability would not actually achieve equal capabilities among the two or the same social floor among the two.

With that said, dollars are a great way to pump up your capabilities, no matter who you are. So handing them out, even in a flat amount like a basic income, is going to be a plus. It's just not the only thing you must do. Other institutions that are sensitive to the variety of human life are essential.

What might a complete set of such institutions look like? For me right now, I have in mind a three-tier basic income system, combined with need-specific top ups, a variety of universal public services, and a negative income tax.

The three tiers of the basic income would be 1) child, 2) adult, 3) elderly. There would be a specific basic income amount for children, which would flow to their legal guardians. This could replace the Child Tax Credit. There would be a specific basic income amount for adults, which would be higher than for children. Finally, there would be a specific basic income amount for elderly, which would be the highest of all. This would function as a universal pension and could replace Social Security.

As far as need-specific top ups go, disability would be the most obvious. Those with qualifying disabilities could get a boost to their basic income amount to accommodate the extra dollars they need to achieve the broad, targeted level of capabilities. This could replace SSDI and other disability insurance. Other top ups may also be appropriate for other classes of people as well. Importantly, these top ups are not means-tested. They attach to specific groups that could include people from all parts of the economic distribution.

For universal public services, the biggest one is national health insurance. National health insurance would hammer out a lot of the differences among people with regard to physical ailments and disabilities that restrict capabilities. Universal services in the realm of child care , pre-k, k-12, and so on would also be likely candidates.

Finally, to make sure those on the lower income side of things get an extra boost (and to help incentivize work), we should top all of it off with a negative income tax for the first so many dollars of income each year. This could replace the Earned Income Tax Credit.

So there is a broad outline for how you could overhaul the social income system with basic income at the center, but obviously not its only part. You take a three-tier basic income system, combine it with conditional top-ups for relevant populations, mix in universal services where it makes sense to do so, and close it out with a negative income tax to pump up low-income workers. It's not the only way, but it is certainly one.