Counterplan leads to federal follow-on and avoids the link to politics

Are basic-income policy proposals relevant at the state or local level? Alaska’s Permanent Fund Dividend illustrates how states can create dividends from sovereign wealth funds, or more directly from taxation of the use of common assets. But what about resource-poor states like Maine? Gary Flomenhaft (2012) calculated that even Vermont, also a resource-poor state, has enough resources that, if all the rents were taxed, and the revenue distributed as dividends, every citizen could receive between $1,900 and over $10,000 annually. Of course, clawing back these resources after having turned them over to private companies would face major political challenges.

A more modest, partial basic income could be created at the state level in several ways. A state-level carbon tax, desirable as a way to reduce fossil-fuel emissions, could yield a significant universal dividend, and the dividend would rectify an otherwise regressive and unpopular consumption tax. A carbon tax with progressive tax reductions has been implemented successfully in British Columbia (Durning and Bauman 2014).

The earned income tax credit, which exists at the state as well as the federal level, could be made refundable. That is, those without earned income would receive a credit, increasing their income when it falls below a minimum. It is unlikely that refundable tax credits or carbon taxes at the state level could be large enough to adequately address either the environmental requirements or the income needs, but policies at the state level can pave the way for more adequate policies at the federal level, when the political environment there becomes more favorable.