Guaranteed-income realism

Running one of Milton Friedman's best ideas through the policymaking gauntlet.

Image credit: AI image generated with Microsoft Image Creator.

Our inaugural forum on Milton Friedman and the negative income tax highlighted the challenges of passing such a sweeping policy and the rise of smaller programs that mirror some of the NIT’s logic, such as the Child Tax Credit. Today, we share two important new essays that continue developing this line of thought.

On the ground, meanwhile, CTC advocates logged a meaningful win this week when the House passed legislation that would phase the credit in more quickly (especially for large families) and index it to inflation. It is, as my colleague Josh McCabe put it, “a significant victory for families and a defeat for political polarization.”

As it happens, Matt Zwolinski makes the case that guaranteed-income advocates should refocus on the CTC in his new essay, “Less-than-Universal Basic Income.”

For many of the UBI’s supporters, its universality is one of its strongest appeals. And yet it might also be one its greatest political liabilities, as the objections of cost and fairness show. A permanent expansion of the Child Tax Credit has the potential to realize much of the promise of permanent, broad-based, unconditional cash transfers, while simultaneously avoiding the biggest pitfalls of the UBI.

Meanwhile, Ed Dolan charts some additional creative paths forward in his contribution, “A negative income tax for today’s America.”

If starting from a blank slate is impossible due to path dependency, and if an add-on NIT would be destructive of work incentives, what is to be done? I see at least three ways forward that would not require the immediate repeal of current programs, but only changes in their phase-in and phase-out parameters … The most radical approach would be what I call total income phase-out (TIP). Regardless of how many cash and in-kind welfare programs stayed on the books, TIP would introduce a harmonized phase-out system that would apply to all of them.

American government tends not to run on clean breaks and simple fixes. We can certainly do better in policymaking and public administration — but usually, the way to get there is by persistently working the knots. Stay tuned for the next issue of Hypertext for a philosophical perspective on complexity and incrementalism.