George McGovern's UBI plan is a bit of a tragedy in American politics, and it was one of those weird polarizing moments that turned Americans against the concept at all. Because George McGovern was polarizing and didn't know how to defend it. And everyone turned against him, republicans, democrats, everyone. Nixon turned against the concept once his opponent ran on it, and the dems had an interest in sabotaging republican. So the issue was framed as putting half the country on "welfare" and how "the workers" are paying for it. Still, it was the closest we ever came to a real UBI in this country. Nixon's FAP idea had work requirements and was less generous. And McGovern's UBI actually seemed to be an attempt at a real basic income in the country.
How McGovern's plan worked
George McGovern's plan would have given $1000 to every man, woman, and child in the US. Yes, that's right, the same grant was given to both adults and children, whereas my own plan gives roughly 3x as much to adults as to children due to how the poverty line works. The idea was that a family of four would get $4000, while the federal poverty line at the time was $4275 for a similar sized family. I guess back then they didn't do individual poverty lines, but I'm guessing for one individual, it would amount to $2100, with an additional $725 or so for every additional member of a household, give or take a little bit. I'm spitballing here. In today's terms, $1000 translates to roughly $6800 or so per person, or $27,150 for a family of four. It included a clawback of 33 cents on every dollar, which is fairly average for these sorts of plans. This meant the break even point was $3000 for an individual, or $12,000 for a family of four. This translates to $20,362 for an individual, or $81,450 for a family of four.
That said, to judge it:
Is it really a UBI?
Well, while it's intended to be universal, it basically functions like an NIT like many other proposals I've looked at, essentially guaranteeing a certain amount to people and then doing a clawback scheme rather than a "give to everyone and then tax back" scheme like I prefer. Generally speaking, I've judged plans like this fairly harshly in the past, because I see them as ripe for potential changes to make them less universal over time. While plans like this are cheaper from a government budget side as they eliminate redundant costs, it would be easy for future administrations to undermine and sabotage them in the future. So I have to give this a 14/20, in line with them.
Is the amount high enough?
This is a weird one to judge, as he gave no difference between adults and children. For a single adult, his UBI was only half the poverty line. And given that's 3/4 of how I judge this metric, I have to give him 8 points for that. On the flip side, his child benefit was way too generous, to the point that would incentivize having children in a way I wouldn't approve of. Generally, you want the child benefit to be roughly 1/3-2/5 what the adult benefit is or so in my opinion. So I have to give him full credit here for that, and maybe a little extra, so I'll give him 6 points for that out of 5, since the child benefit was intended to offset the child benefit. Again, back in the 1970s for some reason the poverty line was defined by families of four. And that means his particular UBI might've been a problem of the time, rather than a problem that he would have been aware of and able to fix. 14/20
Is it progressive?
In a sense it would be regressive mathemathically. This is what I dont understand about "progressives". if you showed them this, they would jump on the idea of a 33% clawback as long as it's an NIT proposal. But if it were a "true" UBI proposal, this is actually regressive. because to fund a UBI like this, you would only need a flat tax around 15-20% or so. So what would happen is the 33% clawback would absorb the majority of the costs, and then once you get the break even point, your net tax burden would actually DECREASE relative to a flat tax. I know progressives scream about Yang's VAT tax, but his plan is FAR less regressive than this one would be. My plan is also less regressive as I institute the clawback as a flat tax on all income in my proposal. Based on previous proposals and their ratings, 14/20
Do the numbers work?
NO! And this is the real problem McGovern had selling this thing. This isn't a bad plan on paper. And based on math done on previous proposals like this, I'd estimate the net costs of the program to be roughly 1/4 of the total cost of the program. But here's the thing, McGovern DIDN'T EXPLAIN WHERE THIS ADDITIONAL MONEY WOULD COME FROM! And this is why he flopped hard debating the concept with Humphrey. He didn't do his homework, and because you would need a tax increase somewhere, political opponents in both the democratic and republican parties were able to smear his plan is needing nebulous tax increases on middle income Americans. While as Scott Santens points out, mathematically the clawback worked in such a way it would benefit 70-80% of the country is net, the fact that we don't know where rest of the cost comes from is a huge reason why this plan failed to gain support. In practice they probably could've raised the money from the top 20% or so, because that's how UBI plans work in practice, but again, this wasn't explained. Seriously guys, this is why doing your math is so important. If you don't do your homework, the opposition will rip you for daring propose such an idea. 12/20
Does it give people the power to say no?
I mean, it is essentially an NIT and my argument against NITs is that in the long term it wouldn't give people the power to say no as the government would be able to make incremental changes to the idea to restrict eligibility and force people to work. Still, McGovern's idea was for it to be universal so he at least tries here.
As far as the amount goes, again, the amount is too low on the single adult side to give people the power to say no. it's roughly half the poverty line. And while some might be able to say no if they live in a large enough family, it's dependent on that. So generally speaking this plan fails at that. 10/20.
Overall - 64/100 = D-
This plan is barely a passing grade for me. To be fair, I'm harsh on NIT plans, as I don't see them as true UBIs and fear sabotage from future administrations. Still, on top of that, McGovern just didn't explain where the money would come from, which opened up him to political attack, and allowing his political opponents to claim there would be nebulous tax increases on middle income working Americans, leading them to pay for people on welfare. This is the root of the anti welfare framing in the US. You don't want to make a plan that makes middle income americans rant and rave about how they work so hard and why should these lazy bums who dont work get anything for free? If you're going to propose a UBI that does attempt to allow people to not work, you need to sell it in a way in which most of these middle income americans aren't paying for it at all. And while his UBI plan could theoretically benefit up to 80% of Americans much like every other plan just about, if you don't explain your numbers, it can incense people against it, causing you to lose support.
All in all, I don't think McGovern's plan is THAT BAD, and much of the negative score is due to my anti NIT bias. But, it also had some moderate issues on ensuring everyone would be OUT OF POVERTY, and McGovern also flopped on the funding. While it barely gets a passing grade from me, it IS a passing grade, and if someone proposed the equivalent of this today, I would still vote for them. Like, I admit I'm being overly harsh. But hey, it is a flawed idea. One that can be worked on and improved, but flawed.
No comments:
Post a Comment