Mar 30, 2019

Andrew Yang: What to know about the 2020 candidate's universal basic income proposal

Photo: Joshua Lott/AFP/Getty Images

Andrew Yang has focused his 2020 presidential election platform around a proposal for universal basic income, which he calls “The Freedom Dividend.”

Why it matters: The proposal is based on the notion that automation will eliminate millions of jobs for Americans and that this could help cushion the blow.

  • Each American over the age of 18 would receive $1,000 per month from the government, regardless of work status.
  • Those already receiving government benefits could choose between them and the monthly payment, per Vox. If they choose Yang’s UBI, they would have it unconditionally, per Yang.
  • Yang intends to fund the program with a 10% value added tax (VAT), which is a tax applied to goods at each stage of their production.
  • The program would also be funded by consolidating some social welfare programs, per Yang.
  • It would be illegal to lend or borrow based on the dividend.
Arguments in favor of Andrew Yang’s universal basic income
  • It could help people who are living paycheck to paycheck.
  • Yang says he thinks UBI would lead to “better children's health nutrition, higher graduation rates, better mental health, lower domestic violence.”
  • Yang claims, citing a Roosevelt Institute study, it would “permanently grow the economy by 12.56 to 13.10 percent—or about $2.5 trillion by 2025—and it would increase the labor force by 4.5 to 4.7 million people.”
  • Facebook CEO Mark Zuckerberg has said a UBI would free people up to think more creatively.
  • With a guaranteed income, those looking for work can choose not to take jobs with poor working conditions or unfair wages.
  • Americans may have more disposable income.
  • Yang’s web site points to a World Bank study that shows when left to their own devices with guaranteed income, people do not, on average, spend their money on drugs and alcohol.
Arguments opposed to Andrew Yang’s universal basic income
  • It would be expensive — the nonpartisan Center on Budget and Policy Priorities (CBPP) analyzed a similar proposal and found it would cost the government $3 trillion — and the proposal it analyzed would cost even less than Andrew Yang's (the proposal analyzed would give each American $10,000 annually instead of Yang’s proposed $12,000.) Social Security cost $988 billion in 2018.
  • It’s not clear that poorer Americans would be better off; if UBI acts as a replacement to current social programs, which would be one way to try offsetting the program’s costs, it would be like taking money meant for people at the bottom of the pay scale and effectively redistributing income upward to people who are already higher up on the income scale, per CBPP.
  • Even if UBI replaces Medicaid, SNAP, the EITC, and housing vouchers to try offsetting costs, the government would still not have enough to fund a meaningful UBI, per the CBPP.
  • A VAT tax would be unlikely to win over conservatives.

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