Many know of the term, Universal Basic Income (UBI), however Dr. Steven Trost has taken his own spend on this topic and proposed what he believes to be a better way for the United State economy to function.
Universal Basic Income? Dividend
In his lecture to the Free Enterprise Society at Oklahoma State University, Dr. Trost introduced a variation of UBI, which he coined Universal Basic Dividend. This idea is suggests instead of citizens receiving a guaranteed income, citizens receive a dividend of $9,000 dollars from the US government. This dividend is funded through 16% of GDP generated by the government. A 25% flat tax is introduced to income once a citizen or family meets the threshold that is established to pay the dividend received. Dr. Trost gives an explains that additional income on top of the dividend received is taxed at a flat rate of 25%. In order to push the burden of taxes upwards.
Is this Feasible to Institute?
In addition to his proposed theory, Dr. Trost also explains the means in which it would take to fully establish a universal basic dividend. In the U.S., one must start by limiting the power of the federal government. Dr. Trost proposed the plan of drafting the UDB into a constitutional amendment and getting the support of 3-5 red states and 3-5 blue states to pre-approve the amendment and hold a constitutional convention. Adding this to the constitutional would help mitigate the amount of politicians from constantly adjusting or re-figuring the UBD if it became a law. Solidifying the UBD would be the only way to ensure that it lasts and remains untouched and harder for politicians to use it as a campaign bid.
The Shift to Federalism
This move by the states would shift power from the federal government to the states, shifting our government to more of a federalist structure. With the constitutional amendment, not only could the UDB be hard to alter, the non-negotiables laid out by Dr. Trost in order for the system to work, would also limit government spending and get rid of other government programs and subsidiaries. This would also help make the UDB shift economically feasible. This severely limits the federal government but I believe this could be a turn for the better. Turning over the power to the state would allow for the states to reflect their values and create a system of society that is agreed upon by "all". Having the state, businesses, people, or communities, be responsible for education, establishing a wage, etc. would open the opportunity for economic growth.
What Does this Create for Society?
This shift would create entrepreneurial value for those who seek it. While some may argue, that a person would try to live off their dividend and live off support from the government, that would be extremely hard. Since the government would no longer support any unemployment programs, SNAP benefits, or medicare. Currently, there is little reason and means for schools to offer a higher quality education. Many schools are overcrowded and underfunded, the UBD allows for the movement mentioned by Dr. Trost. This would encourage schools to offer a more competitive education to bring students to their school. This is a two-fold benefit, UBD would allow privileged families to move to areas with a better education and take the pressure off over populated schools. Society has been stagnant in some areas, especially in areas controlled by the government. This would create opportunity for betterment and get rid of the reliance that some of the economic sectors depend on. Competition would also help state governments to improve their highways, cities, and infrastructure to attract people. I think placing more power into the hands of the state governments would alleviate a lot of problems nation-wide. When looking to places with low-conflict or what some people view as "better governments" these countries are small in comparison with high heterogeneity. They often have not faced problems similar or on scale with problems that we have in the US. Our states having a strong hand in the government can create areas of commonality and give citizens the option to move where they feel their values are best represented. Values such as an emphasis on agriculture, or state funded programs for health care, or something similar to the oil revenues shared by Alaskans, as mentioned in the lecture.
In reflection of the proposed situation, I have a few concerns. Although, people should be motivated to work and not rely on $9,000 a year, that amount of money is good only as a fall back for small emergency situations or opportunities (i.e. starting a business). Things like cancer, fire or disability costs can cost more than $9,000 a year, and leave people unable to work. I also think that some taxes, or GDP should be used to continue VA benefits and healthcare, this is one of the only exceptions to the getting rid of government assistance programs. States would need some sort of program or affordable heath care and insurance enacted for these problems. I also think that without the proper safeguards in place, larger businesses and corporations would take advantage of people. As more people are able to buy things and contribute to the society, and there be no minimum wage laws, corporations will price gouge and the cost of living could continue to rise exponentially. Currently, there are many positions in which people will not work for the wage offered, and demand a live-able wage. People who argue against a higher wage reason that these jobs are not worth a living wage. There are two options for these businesses, get rid of the jobs or offer what people are willing to work for. There could be people out their willing to work for $2 an hour, but there is not enough of those people to work supporting businesses. With all this mind I would like to learn more about how states would regulate businesses. Perhaps, instituting a wealth distribution throughout the company? Similar to providing residents of Alaska with oil revenue dividends, public companies could be regulated on their distribution of bonuses. Many CEO and other C-suite employees make salaries in the hundreds of thousands, it is their bonuses that put them in the millions. Capping these bonuses or creating a standard percentages for distribution could help to control the effects of lower-earning employees.
Conclusion
Federal government could also shift their focuses to things such as external strategic problems, major transportation (airlines, state to state distribution, etc.), and assuming that committees such as the FTC. stay in tact, US could become more cohesive with each state playing to their full strengths. Dr. Trost poses a strong argument for his theory of the universal basic dividend.
