2019 Jotwell: J. Things We Like 1 (2019)
The Policy Maker's Guide to a Universal Basic Income

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The Policy Maker's Guide to a Universal Basic Income

Author : Susan Morse

Date : July 29, 2019

Miranda Perry Fleischer & Daniel Jacob Hernel, The Architecture of a Basic Income, - U. Chi. L. Rev.
(forthcoming), available at SSRN (Mar. 27, 2019 draft).


Miranda Fleischer and Daniel Hemel have written a terrific article, The Architecture of a Basic Income, about a
universal basic income, or UBI. They offer concrete policy advice grounded in philosophical priors. They successfully
separate questions about fundamental policy design from questions about political packaging. Their paper should
become a go-to resource for the increasing swell of interest in UBI policy.

Fleischer and Hemel give the following definition of UBI: [A] program that ensures that all members of a polity have
access to at least a minimum sum of money. (P. 6.) They provide three philosophical perspectives that support a UBI:
welfarism, founded on the premise of declining marginal utility of income; resource egalitarianism, or the idea that ex
ante redistribution should support each individual's ability to develop; and libertarianism, based on the Lockean
proviso that individuals' acquisition of property rights should leave enough, and as good, for others.

The choices that Fleischer and Hemel recommend for UBI design seek a philosophical consensus where possible. But
despite their fidelity to philosophical foundations, their recommendations manage to stay grounded and pragmatic.
Fleischer and Hemel acknowledge the arbitrary nature of some line-drawing exercises and explain available
benchmarks. At key junctions when differing philosophies support inconsistent answers, they turn to simplicity of
administration as a tiebreaker. And they are honest about how expensive a UBI would be, while correctly explaining
that the funding mechanism can leverage the redistributive potential of the entire federal income tax system, rather
than relying on poorly designed phaseouts.

The authors highlight six design issues raised by a UBI and make recommendations in each category, as indicated
below:

     1. Size: $500 per month.
     2. Eligibility: All citizens and lawful permanent residents regardless of age.
     3. Uniformity: Yes. For instance, no explicit income or asset phaseout (but see Funding Mechanisms, below) and
       no geographic cost of living adjustment.
     4. Assignability: Limited. For instance, allow use of one year's worth of future payments as collateral for loan.
     5. Payment Mechanism: Biweekly, via Social Security Administration.
     6. Funding Mechanisms to cover nearly $1.9 trillion cost: (1) elimination or reduction of some cash and cash
       substitute transfer programs, plus (2) an income tax surtax administered by the Internal Revenue Service.

(Pp. 4-5.) When Fleischer and Hemel discuss the Size and Assignability features, they acknowledge that each
presents a line-drawing exercise that invites a somewhat arbitrary answer. Yet the authors also provide useful
benchmarks. $500 per month amounts to about half poverty level income, or the deep poverty threshold. It also
translates to a cost of about 10% of GDP, which is approximately the gap between government spending in the U.S.
and government spending in some other OECD countries that have more robust public safety nets. (P. 30.) The
recommendation for limited assignability is likewise a tentative suggestion about line-drawing in the face of opposing
considerations of welfarism (which might resist assignability) and libertarianism (which might support it).

The authors' conclusions about Eligibility and Uniformity also illustrate their efforts to reconcile philosophical tensions.

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