Basic Income/Negative Income Tax

Libertarians Debate Basic Income Guarantee

Should libertarians support proposals to scrap the current welfare regime and replace it with a basic income guarantee for American citizens?


401(K) 2013/Flickr

Should libertarians support proposals to scrap the current welfare regime and replace it with a basic income guarantee for American citizens? That's the subject of debate this month at Cato Unbound, the Cato Institute's online journal, with a quartet of libertarian academics and policy analysts lined up to opine on the matter. First up is University of San Diego philosophy professor Matt Zwolinsky, a strong proponent of the basic income guarantee (BIG). Zwolinski argues that there's a pragmatic libertarian case for dishing out cash, no strings attached, rather than continuing to rely on our current patchwork of poorly-managed and work-disincentivizing welfare programs. 

Zwolinski uses the term "Basic Income Guarantee" (BIG) to descirbe a range of policy proposals, from Milton Friedman's negative income tax to Charles Murray's proposal that every American over 21 get $10,000 per year from the federal government. 

There is, of course, quite a bit of variation among these plans in terms of cost, payouts, implementation, and so on. Despite these differences, however, they all have in common two important features.

First, they involve a cash grant with no strings attached. Unlike other welfare programs which encourage or require recipients to consume certain specific kinds of good–such as medical care, housing, or food–a BIG simply gives people cash, and leaves them free to spend it, or save it, in whatever way they choose.

Second, a BIG is an unconditional grant for which every citizen (or at least every adult citizen) is eligible. It is not means-tested; checks are issued to poor and rich alike (though on some proposals payments to the rich will be partially or fully recaptured through the tax system). Beneficiaries do not have to pass a drug test or demonstrate that they are willing to work. If you're alive, and a citizen, you get a check. Period.

It might not be ideal—certainly "no libertarian would wish for a BIG as an addition to the currently existing welfare state," writes Zwolinski. "But what about as a replacement for it?" He argues that the BIG would amount to less bureaucracy, less expense, "less rent-seeking", and less paternalism. Read his whole argument here

Veronique de Rugy laid out some pros and cons of a guaranteed income in the March 2014 issue of Reason. "The biggest risk in implementing a guaranteed income is that it won't completely-or even partly-replace existing welfare programs, but instead simply add a new layer of spending on top of the old," de Rugy wrote. "So what are libertarians to support? If nothing else, more research." 

Up next in Cato Unbound's BIG debate is Michael Huemer, a professor of philosophy at the University of Colorado, Boulder, followed by Manhattan Institute fellow Jim Manzi on August 8, and Cornell management and economics professor Robert H. Frank on August 11; it will continue through the end of August.