Frank Bernheisel: The View From Here
Frank Bernheisel
Frank Bernheisel
Posted 3.19.19
Just Outside Washington


Guaranteed Annual Income

When looking to our Founding Fathers for guidance today, we should include Thomas Paine. Paine was American political activist, philosopher, political theorist, and revolutionary. His ideas reflected Enlightenment ideals of transnational human rights, particularly those of John Locke.

Paine authored the most influential pamphlet at the start of the American Revolution, Common Sense, which almost everyone at the time read or had read to them. In Common Sense, he calls government a 'necessary evil', which we need only because of our flawed human nature. He also states government is legitimate only if it functions to benefit the people as a whole.

Paine also wrote the pamphlet, Agrarian Justice< /i>, in1795, which raised idea of how land ownership separated the majority of people from their rightful, natural inheritance and means of independent survival (Locke's property rights); and he introduced the concept of a guaranteed minimum income as reparations. In Agrarian Justice, Paine said:

In advocating the case of the persons thus dispossessed, it is a right, and not a charity -- [Government must] create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property.

Paine's number of £15 would be worth about $2,300 when adjusted for inflation (January 2019), which would result in a 2019 budget item estimated at $560 billion. By comparison, the 2019 budget for the Department of Defense was $685 billion, and the total Social Security benefit payout for January 2019 was $84,755 million[1], which extrapolates to over a trillion dollars for the year.

I found all this very intriguing and decided it was worth a letter to my Congressman and Senators, which is reproduced below:

Dear (whoever),

I recommend that the U.S. close out the many welfare programs that are overly complex, bureaucratic, and inefficient. They do not serve their clients well and are an excuse for not really solving the country's problems of the poor and inequality. These programs should be replaced by a guaranteed income to all citizens. This income would, in addition to eliminating poverty, allow the recipients to pay for child care, education, small business start-up or whatever they choose. Many would say this guaranteed income would be morally damaging. However, the income from oil in Alaska paid to its citizens does not seem to have damaged their moral fiber. And, the experiments conducted in several countries indicate that a guaranteed income has positive outcomes.

This program could be paid for by four approaches: (1) savings from eliminating the current programs, (2) raising the taxes on the wealthy, both income taxes and estate taxes, (3) eliminating the dodges use to avoid paying taxes: off shore accounts, tax sheltering and more, and (4) establishing a financial transaction tax.

Candidates for President have made proposals for raising taxes: Senator Elizabeth Warren has proposed a wealth tax of 2 percent on those holding more than $50 million in wealth and 3 percent for those holding more than $1 billion; Representative Alexandria Ocasio-Cortez has suggested a marginal income tax rate of 70 percent on those making more than $10 million; and Senator Bernie Sanders has proposed an expanded estate tax with a top rate of 77 percent for estates valued at more than $1 billion. These are all good approaches and the final numbers may change.

As mentioned in my letter, there are multiple savings to be achieved by replacing current welfare programs with a guaranteed income. And any short fall from savings is one more good reason to tax wealth.