Universal Basic Income is in vogue. In the last few years, it's gone from a fairly niche idea in social engineering to a policy with earnest advocates. I've ridden this train already quite some distance; when I first started agitating for this, nobody I knew had ever even heard of it (at least as far as I'm aware of). Hipster credentials aside [1], I do want to say that I continue to be a huge fan of it, but also that my initial optimism has been substantially tempered by the time that I've taken to reflect on it and turn it over in my mind. Specifically, I'm worried that when we get around to instituting a basic income, we will do it wrong. There's a reason why my proposal is called a Lateral Income Transfer Filter, and not a Universal Basic Income. What I now advocate for is different enough from the common conception that I don't want to overload the name.
[1]
Thank you who/eivind for suggestions on how to improve this essay series. As-yet unimplemented improvements are listed below:
Examples of how this would affect people at various income levels.
For marketing, show what existing taxes could be reasonably removed with alpha set at various levels.
Traditionally most taxes are done progressively - the higher the income, the higher the percentage tax. This could be done with a LITF too, so there should be a rationale for choosing a linear function for the taxation instead of a progressive one (and possibly a comparison with what happens with either).
Before I get around to talking about LITFs (as I will abbreviate them), first we shall cover UBIs. There is no single definition of what constitutes a UBI, so bear with me, and if you have disagreements, please keep them in mind, but don't let them cloud your understanding.
Basic Income
is a kind of unearned income. "Unearned" income can be contrasted with "earned" income, for which the recipient has provided some service, exchanged some good, or performed some labor. Normally, when we think about incomes, earned incomes are what we have in mind. This is the sort of income that you (if you are in the workforce) most likely receive, and if you are not terribly wealthy [2], likely makes up the majority of your income.
[2]The caveat for "not terribly wealthy" is because in capitalist economies, there are substantial other sources of unearned income, namely income in the form of dividends on owned capital, rental income, and income made through arbitrage in trading capital (e.g. money gained on the stock market). Even though I'm classifying capital returns as "unearned" income, you could think of it as being "earned" through the right of ownership; it's not free money for nuthin'.
Basic income takes this one step further: it is free money for nuthin'. Or, if you have a pedantic personality, it is earned through the right of mere existence. No labor, no services, no goods, no trading, no owning, no nuthin'. Because of this, basic incomes can be categorized as a kind of welfare, a monetary support similar to the allowance some parents give their children [3].
[3]Supposing that one isn't the kind of parent who, in trying to teach their child the value of work, makes them earn their allowance.