Basic Income/Negative Income Tax

Stockton’s ‘Basic Income’ Plan Diverts City From Its Real Duties

The city wants to spend a grant it got giving residents $500 a month for two years.

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There's a simple solution to the nation's poverty and inequality problems, an acquaintance told me several years ago. He suggested that the federal government simply give $1 million to every citizen and, voila, we'd all be rich and happy. After some quick math (323 million x $1 million = more trillions than even the U.S. Treasury can print), he realized that he didn't add enough zeroes to his cost calculation. Turning the United States into Zimbabwe, where a $1 trillion note won't even buy a soda, isn't much of an idea.

But while the above thought experiment is zany, a number of politicians and economists are proposing a similar idea—but on a much more modest scale. In fact, one of California's most impoverished cities, Stockton, is working on a proposal that would provide a "Universal Basic Income" to a small number of residents. Instead of a million bucks, the city—thanks to a grant from some Bay Area tech entrepreneurs—wants to hand out $500 a month for two years without any limits on how it's spent.

It's not as controversial as Stockton Mayor Michael Tubbs' proposal last summer "that pays people not to commit crimes," as KCRA reported. But now Tubbs is back with this latest "let's just pay people" plan. The income idea is backed by a group that believes "cash is an effective way" to rebuild the American middle class. It's a pilot project that will help evaluate how this type of program works.

Tubbs makes some good points about the poor way in which his city traditionally has been trying to boost middle-class jobs and incomes. "We've overspent on things like arenas and marinas and things of that sort to try to lure in tourism and dollars that way," he told KQED News. But bad ideas shouldn't be replaced with worse ones.

I own a bungalow in Stockton and know the city well. Indeed, Stockton officials have been models for doing things the wrong way. Over the years, they've dumped redevelopment subsidies in fancy downtown projects, which remain surrounded by run-down neighborhoods and blocks of largely vacant buildings. The city also spent lavishly on compensation for city workers, which helped drive it into bankruptcy.

In general, the universal income concept is designed to replace current assistance programs. It's been touted by leftists, but even free-market economist Milton Friedman supported the concept as a means to reduce bureaucracy and end the "welfare trap." Current programs phase out as people get jobs, and the goal is to incentivize work. You can receive your payment and still work.

But analysts are downplaying crucial points. For starters, there's little chance direct payments would replace existing programs. It's like other ideas that might appeal to some people on a philosophical level. Some libertarians like a mileage-based road tax rather than the gasoline tax because it would charge people based on how much they use the freeway system. The political reality is we'd end up with a mileage tax and the gas tax.

Government does not often shutter its bureaucracies. The same holds true for these universal income proposals. Furthermore, it's foolhardy for individual cities to embrace these programs, especially since it eventually will involve oodles of public funds. Stockton's budget is crumbling under the weight of misguided past financial decisions. It can't even provide a decent level of public services as is—let alone after it starts handing out payments to people. And incentives matter. If the city subsidizes its residents, then Stockton will become a magnet for people who most want such subsidies.

Realistically, 500 bucks a month isn't much to live on anywhere in California. If this idea takes hold, it will be followed by demands to increase the payments. I can envision the "Living Wage Coalition" that would rise up to demand more money from City Hall, the legislature or Congress. It's dangerous to make larger swaths of people dependent on the political process to secure their living. This already is the case to some degree, but this idea will make it far worse.

But my biggest fear is what it will do to the already eroded concept of work. Many people prefer to do nothing if someone else will pay their bills. "A UBI would redefine the relationship between individuals, families, communities, and the state by giving government the role of provider," wrote Oren Cass in a National Review article last year. "It would make work optional and render self-reliance moot." It's one thing to provide a safety net and another to reward sloth.

Stockton should focus on the basics. If officials keep their budget in order, rein in compensation packages for city employees and provide first-rate services and a friendly business climate, it could lure the jobs that are the key to a middle-class lifestyle. Giving away "free" money—whether it's a million bucks or 500—is a terrible idea.

This column first appeared in the Orange County Register.

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65 responses to “Stockton’s ‘Basic Income’ Plan Diverts City From Its Real Duties

  1. If you don’t work and constantly prove your worth, they’ll kill you. This is why Adam and Eve were distraught when G-d expelled them from the Garden. It was no longer safe just to wander around eating berries. They had to learn the dark arts of security and genocide in addition to all their other problems. So yeah, a basic income might seem like a return to the Garden, but it is dangerous because people become dependent and entitled, and they are despondent when it is taken away. This is what is happening in Gaza – the residents mostly don’t work (or are paid to push papers in various clerical positions) and so now that aid is being cut off they are preparing to be slaughtered or just to die. Of course they’ll be fine, but would have been better not to be in this mess in the first place. Of course, American Zionists have only themselves to blame.

    1. American Zionists have only themselves to blame.
      Blame for what?

      1. That time that Dajjal claims he was banned from Reason.

        1. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life.

          This is what I do… http://www.onlinecareer10.com

    2. jibbity-jibbity and a rat-a-tat-tat.

    3. Censors the O as “G_d”, yet rails on Zionists. A complex individual.

      1. Doesn’t want to offend the religious.

        1. Maybe he is Satmar.

    4. In 1947 the entire population of Palestine was less than 2 million.

      The Palestinian territory population is now 5 million.

      I guess something must be going right for them.

      The population of Israel is 8.5M for comparison.

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  2. “But my biggest fear is what it will do to the already eroded concept of work. ”

    UBI discourages work *much* less than the current welfare system.

    The current system is a dependency trap, often taxing marginal income at *over* a 100% rate because of threshold effects.

    1. One if the points is that a UBI would not replace welfare; it would merely add to it.

      1. By the same reasoning you could say that tax cuts are bad because they don’t actually stop government spending. Maybe that’s the case, but it still doesn’t downplay the boon of tax cuts and UBI.

  3. $500.00 a month is $6,000.00 a year.
    The ‘ideal’ minimum wage of $15.00 an hour is $31,200.00 a year.
    So the first thing that will happen is the city will raise the free money by 5 times, ‘to be fair’.
    California regulations cause cancer.

    1. California regulations cause cancer.

      Nice soundbite.

  4. “But my biggest fear is what it will do to the already eroded concept of work. ”

    A better approach is an expanded Earned Income Tax Credit or similar. Where workers get extra money as long as they work. So instead of getting $500, someone would get an extra $3 per hour for every hour they worked.

    Granted, then there is a problem in who qualifies and how you taper off the amount as income rises. To avoid having people refusing to work just above the line that would kick them out of the subsidy.

  5. Stockton declared bankruptcy in 2012. Eastern District of California, in Sacramento (Case 12-32118).

    This is a gimmick for illegals and green carded immigrants to give them taxpayer money.

    Trump would get another notch on his belt if he convinced Congress to end bankruptcy protection for cities, counties and states. Just let them run out of money.

    1. Maybe part of the bankruptcy agreement should include turning a significant portion of the city into a federal park.

  6. By ‘real duties’, does the headline actually mean doing nothing (having no regulations in the way of a friendly business climate) and doing less than it does now (e.g. reducing lavish compensation)? Because I don’t really see the contradiction, diverting funding from ‘fancy downtown projects’ into actual citizens’ hands so that it gets spent on what people actually want and need seems pretty complementary.

    “But my biggest fear is what it will do to the already eroded concept of work. Many people prefer to do nothing if someone else will pay their bills.”

    You know they calling this a ‘test’ to ‘gather data’ for a reason right. One of those data points is if people give up working because they get free money every month.

    Your “many” turns out to be “not that many.” Every previous test of basic income has shown only modest reductions in working hours, 5% at most. The number of people who are willing to merely subsist on a pittance, and/or just smoke weed every day like Sam Altman suggested, doesn’t seem to be as large as you’d fear. There are still obvious incentives to work and no new disincentives, the desire to afford new things is fairly common, not to mention just enjoying your work on its own.

    I get worry over not being able to fund UBI, but the pearl-clutching moral panic over people not working is absurdly counter-factual.

    1. Every previous test of basic income has shown only modest reductions in working hours, 5% at most.

      That’s 5% too much. There is simply no valid reason to incentivize people to be less productive, I don’t care to what degree.

      1. Far be it from me to suggest that your strident declarations are made without due consideration of all the variables, but is it just possible that there are valuable spheres of human activity that can’t be categorized and measured under the heading of “production”?

        1. Why don’t you enlighten me with an example?

          1. Childcare, education, healthcare, exercise, meditation, relaxation, certain arts and crafts, socializing with friends, dating, sex, cooking, eating

            1. Oh whoops, you said “an” example. My bad.

              1. The discussion is about work, not “dating” or “relaxing”. Unless you really think those activities are worth subsidizing.

                1. But let’s take a couple of your examples at face value. If I’m paying you for childcare or education, why on earth would I want you to be 5% (or any percent) less effective at it?

                2. Oh, well then we should talk about how number of hours worked isn’t the same thing as productivity level. People who have the cushion of the UBI might have less trouble paying the bills, which would place less stress on their home lives and marriages, and thus make them more productive. Or they could feel better about leaving jobs they hate and doing something they are better at, or starting a business, or finding a less sucky job, while their old boss replaces them with a robot, making everybody more productive.

                  1. I don’t (willingly) pay taxes to make other people “feel better”. But let’s say I was willing to go along with this scheme. As someone mentioned above, why stop at $500? I dunno about you but $1000 would make me feel a lot better. Maybe $2000.

                    1. Federal law mandates that health insurance pays for psychiatric treatment. Figure $200 per month to see the shrink and $300 per month for the pills. We’ve already signaled that it’s worth $500 per month from collective funds to make a “depressed” person feel better.

                  2. Hugh got one of those “5% less productive” teachers.

            2. Regulation is what keeps people from being ‘productive’ when dating and having sex.

        2. The point we seem to be missing is that money came from someone. That someone now has less money to spend on things like childcare, education, healthcare, exercise…

          1. 1) who is “we”?

            2) I’m the first to sign on to “Taxation is Theft” (well, maybe the second after KMW), but until the tax rate is reduced to zero, there are still discussions to be had about better and worse ways for the government to spend its revenue.

          2. Money doesn’t come from people, money comes from gub’ment! Why are you bringing maths into this?

          3. It came from Bay Area entrepreneurs who wanted to spend it on this.

            1. “It came from Bay Area entrepreneurs” (the money)

              Everyone seems to have missed that part of the article……

              The money, (in this case) is coming from rich Bay Area Tech nerds….

      2. “”That’s 5% too much. There is simply no valid reason to incentivize people to be less productive, I don’t care to what degree.””

        I don’t want to work, I just want to bang on the drums all day.

        It would definitely help those who don’t want to work to buy a few things.

      3. An hour is not necessarily less productive just because no one pays you for that time. By your logic, cleaning your home is unproductive.

  7. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do,

    +_+_+_+_+_+_+_+_+ http://www.homework5.com

    1. This guy gets it. UBI, pshh.

  8. What can go wrong with a collectivist utopia?

    This seems like a wise endeavor.

  9. I agree that this isn’t the job for a municipal government, which should concern itself with paving roads and cleaning parks. UBI should be administered by the state governments ideally, or the Federal government at least.

    1. It’s possible that Stockton has a homeless problem that they think will go away by giving people a UBI, and therefore don’t want to wait for something to happen at the state or Federal level.

      1. It’s possible that Stockton has a homeless problem that they think will go away by giving people a UBI

        Wouldn’t more homeless move to Stockton if Stockton was handing out money to the homeless?

        1. Maybe, but what’s the odds that it would apply to only Stockton residents? Which would reinforce the idea that you can’t have a strong welfare system and open borders.

        2. This is the right answer. San Francisco doles out millions to the homeless every year and yet somehow the problem just seems to get worse and worse. The SF government solution of course is to hand out even more bennies.

        3. I assume the town has occupancy limits for apartments that limit the number of residents in the town.

  10. For those who don’t know, Stockton is a twon set betwixt the urban spawl of the SF bay area and the rural heartland of state. In other words, it’s the armpit of California. It used to be just a dusty agricultural town with little industry of its own other than nut packing and shipping.

    Today its top employer is the county, the second top employer is the school district. Employer number five is the juvenile court. On the plus side, it is the location for the well respected University of the Pacific. I grew up in central California, and even as a kid it had a reputation as a shithole. It is NOT an affluent town.

    Which gets me to my point: The city cannot afford a basic income scheme. You have to fund it from taxes, and there aren’t enough taxpayers to pay for the non-taxpayers. Especially not in a city that declared bankruptcy. Especially when the non-taxpayers are already getting assistance from the county, state and federal tax coffers. It’s not that I’m insensitive, it’s just that I can do math.

    The idea behind the basic income is that it’s not just another layer of welfare, it’s a program that REPLACES the existing welfare with a basic income. Which means you implement it at the level of where the welfare is. Which is not the city, which needs to be concerned about stuff like police and fire and roadz.

    1. Never been there, but it can’t be worse then Yuma.

      1. It’s like Yuma, but without any historical significance.

        1. Or the Yuma Yummies.

    2. Shithole? Racist. Wait, it may be homophobic as well…

    3. I grew up in Cali. I had family that lived in Stockton. It was definitely a shithole. My great aunt/uncle lived in a decent neighborhood in a nice old victorian, but not too far down the road was some proper ghetto shit!

  11. Where does Stockton plan to get the money?

    I say Stockton should go for it and we can watch it fall on it’s face.

    1. Yeah, sometimes paying attention helps

      “”The city wants to spend a grant it got…”

      Yeah, that’s a sustainable idea.

  12. it eventually will involve oodles of public funds.

    Why couldn’t it continue to come from grants?

  13. “It would make work optional….”

    How so, when you say it’s not enough to live on? Wouldn’t it just supplement work?

  14. Wrong. Wrong. Wrong. Giving each person a million dollars is insanity. What the government should do is give just me one billion dollars. It won’t cause much inflation, and think of all the jobs that will be created as I spend all that money. I’m sure I can get Paul Krugman to endorse the idea.

  15. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do,

    _ _ _ _ _ _ _ _ http://www.homework5.com

  16. According to the Cato post about welfare and work that this post links to, people in New Jersey, New York, and Connecticut can make slightly more than the median salary by collecting welfare. Despite this, most people in the tri-state area work, and many move to other states for more opportunity. I’m on the fence when it comes to UBI, but it might actually lower welfare roles.

    From what I’ve seen, most people are reluctant to collect welfare for the first time, but many stay on welfare once they have it. In difficult times, $500 per month provides you with food so that you don’t have to apply for food stamps as you are living on the street and looking for work. $700 per month pays rent with utilities included for a room in a rooming house in one of the country’s most expensive counties. If the UBI of $500 per month takes care of your food without you worrying about earning too much to keep that benefit, you can get a day laboring job at the local temp agency which brings you a take home pay of about $50 per day. That agency doesn’t always have work for you, but if you can put in 4 days a week for 4 weeks a month, you’ve got enough for rent and a bit extra for transportation. You also have 3 days a week to look for a better job. I can think of people in my area who would have stayed off of welfare with this option.

    1. I suspect that owners of rooming houses would raise rents if there was universal basic income, but non-profits could open their own rooming houses and charge $700 per month.

  17. A 9mm to the TEMPLE for ALL SPICCKS—-NIGERS and NIGER LOVERS
    A GIFT FROM the HUMANS—

  18. “… the city wants to spend a grant it got giving residents $500 a month for two years.”

    Cool, a twist on the law of supply and demand.

    First off, the basic cost of living will increase by, surprise, $500 a month?maybe more. Rent, food, clothing, everything, will go up by a little or, in some cases, a lot. Your new “free” money will be absorbed.

    Second, in two years, when the proposed program would theoretically end, the usual coalition of left-wing activists will be demanding the programs continue, and the amounts be increased and indexed to inflation?forever. Failure to do so will mean the usual young, old, infirm, women… whatever will be harmed.

    For anyone who objects, well, accuse them of being some kind of -ism or -ist and they will go away.

  19. In the not so distant future, most non-skilled and semi-skilled work will be automated or performed by robots. Most of the people, including immigrants, who do that work now will not be “retrained” and transitioned into the high tech industries that develop and produce the machines that will displace them. Silicon Valley is fairly united behind the universal basic income concept because for one thing, I believe, they fear the displaced persons pitchfork revolt.

    Everyone opposed to UBI better start working on viable alternatives and I mean now.

    1. The problem with this premise is… Reality.

      The laborers don’t have the IQ to do most of the work that will exist in the future.

      In the past low IQ people with a decent work ethic were useful to society… In the future they won’t be even neutral, they’ll be a big fat drain on everybody else. Far worse than it is now. But since mass genocide probably isn’t on the table, a UBI may be where it all goes eventually simply to stave off the pitchforks. We may technically be able to support a UBI with the greatly increased productivity in the future, but it will still be a huge drag on intelligent people who are doing all the heavy lifting.

      The only way I can see out of this is the high IQ intellectual class essentially hiring tons of servants just because they can. Why not get massages 5 days a week? Or have a sexy, dumb, 25 year old hot maid clean your house instead of a robot?

      That’s the only way I see low IQ people being employed in saaay 2075 or 2100. Maybe far sooner depending on how things advance.

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