September 9, 2015

WE ALL KNOW WHERE WE'RE HEADED:

The New Redistribution: 5 Radical Ideas For Reversing Income Inequality : Should everyone get a minimum inheritance at birth? How about a government-guaranteed income or job? In the face of a growing income gap, we may need to get revolutionary. (Ben Schiller, 9/08/15, Co.Exist)

MINIMUM INHERITANCE

One the big advantages of having wealth is that you can pay it forward (most of it) to future generations. It's one of the things that puts the children of richer families ahead. The idea of a minimum inheritance is to even the score, so that kids of poor families build "equity" as well. Also known as "capital endowment accounts," these minimum inheritances are paid at birth into accounts, where they accrue until a child is 18. North Carolina, for example, runs a well-known Individual Development Account for its citizens.

The minimum inheritance can be financed from state coffers, or directly by way of a wealth tax, as proposed by Bruce Ackerman and Anne Alstott. Atkinson's version would be financed from a "lifetime capital receipts tax," with larger inheritance transfers and gifts taxed at higher rates (gifts within marriages and civil partnerships would be exempt). "The key element in the proposal is that people are taxed on the amount received rather than the amount left, as happens under the current system," he says. [...]

BASIC INCOME

Finally, Atkinson gets behind the idea of a "basic income guarantee." This would be a universal payment to all citizens, ensuring that nobody is completely poor. A basic income would set a financial floor below people's feet so they have a safety net and can grow financially from there. The attraction is that this income would replace some or all existing social transfers (such as welfare or food stamps) and instead just involve one payment. The idea is popular on the left because it's distributional, while on the right, it seems more straightforward and fair than complicated government programs. A single benefit payment, rather than lots of in-kind services, allows people to spend money as they want. Some local governments are even beginning to experiment with the idea.

Atkinson's basic income would be tied to participation. People would only receive money if they could prove they were making a contribution to society, including some kind of work, education, skills, training, home care or voluntary work. This gets around the main criticism of basic income, which is that encourages people to become lazy.

Posted by at September 9, 2015 10:11 AM
  

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