Neg - Basic Income - Michigan 7 2023 STARTER

UNIVERSAL BASIC INCOME NEG
Means Testing
1NC – Means Testing CP
Text - The United States federal government should provide a means tested basic income in the United States, funded by a carbon tax.
A means tested basic income solves inequality best, because it focuses on aid with the highest social utility, saves money, and is the most efficient – recent empirical examples prove.
Strawczynski and Tirosh, 2021 - profs of Economics and Public Policy at Hebrew University, Jerusalem [Michel and Oren, November “Means-Tested Basic Income versus Traditional Welfare” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3620139 Acc 3/23/23 TA]
1. Introduction In recent years there is a heated debate on the desirability of Basic Income as a future device for substituting traditional welfare, which continues to be implemented by governments in all countries. In fact, experiments for Basic Income were performed in Canada, Finland, India and Namibia (and proposed also in Switzerland). Recently, Spain has accelerated the implementation of such a system (called "minimum vital income3") in order to cope with the consequences of the Covid 19 crisis, which created in the short run a situation of poverty for many families during the months of economic inactivity, that was imposed in order to avoid contagion. According to the Spanish government's decision, the basic income is transferred to eligible families starting in June 2020. In the background of this proposal, we are witnessing a process of substitution of workers by the use of machines – following the growth process that characterizes modern economies. In a situation where growth enhances the substitution of unskilled workers by machines, it would be desirable to adjust ex-ante the welfare system, in order to gradually cope with increasing unemployment of older workers, as observed in many countries.4 The means tested Basic Income proposal claims for a transfer that will be guaranteed to low-income workers; in such situation this income would allow individuals that confront difficulties for becoming skilled to have decent living, and thus improving social welfare under the new technological environment. Paradoxically, the "machines instead of workers" phenomenon occurs in a period in which more governments are implementing the Earned Income Tax Credit as a policy tool, which actually curtails disincentives for non-participation of the Working Poor and consequently it depresses unskilled wages. Such an expansion in the use of this tool, in a world where machines substitute workers, represents substantial trade-offs in terms of policy, and calls for an analysis that allows assessing the comparative advantage of Basic Income programs against traditional welfare. Since the General Basic Income program has been rejected by most economists (as explained below), it is important to check whether its relevant substitute – a means-tested Basic Income – is the right remedy under the new situation. In particular, policy-makers are interested to know whether under increasing inequality a means-tested Basic Income system produces a policy option with higher social utility compared to traditional welfare. In this paper we deal with this basic question. In order to do so we use a standard framework widely accepted in Public Economics, and we run a substantial number of simulations by mapping results as a function of the most relevant parameters that are traditionally accepted to perform a valuation. In order to evaluate the desirability of a means-tested Basic Income program we distinguish between a Conservative Social Planner, who evaluates the desirability of the proposals by looking only at consumption; and a Liberal Social Planner, who uses a standard framework of utility based on both consumption and leisure. In all scenarios we will concentrate on the short-run implications. 5 2. Literature Survey 2.1 Replacement of workers by machines Acemoglu and Autor (2011) explain the impact of technologically driven growth on labor market developments. The use of machines acts a substitute for routine and non-skilled work, creating the need of re-thinking jobs and doing the needed adjustments for labor supporting government policy. Autor (2014) shows that wages and earnings of lower-skilled workers, particularly men, have stagnated over several decades. While so far technology advance did not cause an apocalyptic increase in unemployment,6 there are other remarkable effects that merit further analysis and adoption of policy measures. One of the effects of "machines replace workers" type of growth is the difficulty for old workers to re-insert themselves into the labor market. Aubert, Caroli and Roger (2006) investigate the relationships between new technologies, innovative workplace practices and the age structure of the workforce in a sample of French firms. They find evidence that the wage bill share of older workers is lower in innovative firms and that the opposite holds for younger workers. This age bias affects both men and women and it is also evidenced within occupational groups. More detailed analysis of employment inflows and outflows shows that new technologies essentially affect older workers through reduced hiring opportunities. This difficulty maybe reflected even in discrimination practices, as studied by Adams (2004). This author shows that this practice is quite common among employers, and it brought about a number of legislation efforts among many US states. The vast literature on the acceleration of the ageing process brought about renewed calls for adopting old proposals for welfare reform, based on the basic income approach. According to this approach individuals should rely on a basic income, which will allow them to cope with this kind of phenomenon from a perspective that assures dealing respectfully with the cost of living. Philosophically inclined advocates of this approach (e.g., Van Parijs & Vanderborght, 2017), emphasize the related value of a Universal Basic Income in increasing human freedom, a difficult concept to express in terms of budget constraints, but nevertheless an important goal. Hoynes and Rothstein (2019) carefully describe the new attempts for renewing the Basic Income initiative, that was accompanied by new pilots implemented at different countries – including Canada, Finland, India and Namibia (and proposed also in Switzerland). Nevertheless, these authors clearly show that the General Basic Income initiative by itself must be rejected, since it is too expensive and implies many inefficiencies. These authors show that there are many issues related to specific groups that may be targeted by welfare and to the incentives associated with the payment schedule, including the phasing out. A clear result that is implied by their analysis is that a relevant alternative shall be based on a restricted version of Basic Income. In this paper we will propose a mean-tested Basic Income approach.
A means tested basic income solves best because it guarantees the largest payment – a UBI would shrink its size.
Hanna and Olken, 2018 - prof of South-East Asia Studies and prof of Economics at MIT [Rema and Benjamin, Harvard Journal of Economic Perspectives, Fall “Universal Basic Incomes versus Targeted Transfers: Anti-Poverty Programs in Developing Countries” https://www.aeaweb.org/articles?id=10.1257/jep.32.4.201 Acc 6/12/23 TA]
Narrowly versus Widely Targeted Programs with a Fixed Budget If the government only cares about making sure the poor have access to transfers of some type, a universal basic income—which eliminates exclusion error entirely—may seem attractive. However, as we move to the right in Figure 4A, by raising the cutoff level c, more and more people become eligible for the transfer. If the total budget for the program is fixed, then the transfer given per-person falls as we move to the right on this curve. Therefore, moving to the right on the curve not only changes the tradeoff between exclusion error and inclusion error, but holding the total program budget fixed, also changes the amount given. Figure 4B shows this other aspect of the tradeoff, graphing the level of cash transfers disbursed per beneficiary under Indonesia’s BLT program and Peru’s Juntos program under different targeting schemes, as defined by different levels of the cutoff income c. The transfer level to eligible households steeply falls as you allow more people into the program. Again, the universal basic income can be thought of as the rightmost extreme point, with zero exclusion error and the smallest per-capita transfer for a given budget.
--Means Testing Solves Better
Means Testing solves better than universal programs because targeting avoids tradeoffs – empirical studies prove.
Grant, 2023 - Quantitative Research Analyst & Data Engineer · Grandeur Peak Global Advisors [Joseph, BYU Marriott Student Review, “A Universal Basic Income: Effective or Overkill?” https://scholarsarchive.byu.edu/marriottstudentreview/vol5/iss2/4/ Acc 2/22/23 TA]
Trade-off costs are also problematic for a UBI because universal basic income (by nature of being universal) cannot target cash disbursements to those who need them most. Targeting mechanisms are important as they enable governments to provide greater financial relief to those who desperately need it. A UBI, on the other hand, provides lessened financial relief to a mixed pool of individuals who may or may not need it. Benjamin Olken and Rema Hanna, professors at Harvard and the Massachusetts Institute of Technology, studied the positive effects of targeted cash transfers versus universal ones. Their paper, published in the Journal of Economic Perspectives, explains that “existing targeting methods in developing countries, while imperfect, appear to deliver substantial improvements in welfare compared to universal programs, because they can transfer much more on a per-beneficiary basis to the poor as compared with universal programs.”9
Means testing is essential to have the most impact on poverty – Cook County empirically proves
Ban, 2023 – Digital Editor for the National Association of Counties [Charles Feb 13, County News “Changing lives: ARPA funds Cook County guaranteed income pilot program” https://www.naco.org/articles/changing-lives-arpa-funds-cook-county-guaranteed-income-pilot-program Acc 3/21/23 TA]
Applicants had to be 18 years or older, have a household income at or below 250 percent of the federal poverty level and not be participating in another guaranteed income program. Nearly 36 percent of Cook County residents were eligible. It’s not Cook County’s first foray into direct payments, though. Using Coronavirus Relief Fund money, the county allocated $2 million, which soon expanded to $9 million, in one-time allocations of $600 to $1,400. “I think that showed a lot of people inside Cook County government just how valuable this kind of a program could be,” Subkoviak said, noting that program served every person who applied. With the Cook County Promise, the 3,250 families were a compromise between offering families a significant amount and casting a wide net — and a large sample size. “We wanted to help as many people as we could, but at the same time we wanted to have really impacted each of those households’ lives,” Subkoviak said about the amounts. “This kind of assistance can make a difference in people’s lives beyond just being able to purchase things. This could give someone the cushion to be able to take time off work, or not have to take an extra shift and be able to see their kid’s soccer game. So many people are just working and sleeping and this can give them a chance to take a breath.”
--Carbon Tax Funding
A carbon tax can pay for means tested basic income – it would not be enough to cover a UBI or prevent massive tax increases.
Greenstein, 2019 - President Emeritus of the Center on Budget and Policy Priorities [Robert, June 13, “Commentary: Universal Basic Income May Sound Attractive But, If It Occurred, Would Likelier Increase Poverty Than Reduce It” https://www.cbpp.org/research/poverty-and-opportunity/commentary-universal-basic-income-may-sound-attractive-but-if-it TA]
Will the politics change radically? While some UBI proponents argue that continued pressure on the middle class will make UBI politically feasible, I’m skeptical. Economic pressure on the middle class will not alter UBI’s daunting financing challenges. In fact, more such pressure will likelier increase middle-class resistance to the massive tax increases required to secure UBI without increasing poverty. And we shouldn’t think that we can just get the resources solely or primarily by hitting people at the top. Will we really tax the top 1 percent or top several percent enough to finance most or all of UBI — on top of the higher taxes we’ll want the same group to pay to shoulder a substantial share of the burden of restoring Social Security solvency, repairing the infrastructure, and meeting other critical needs? Increased pressure on the middle class is more likely to put UBI farther out of reach, unless it’s financed heavily — as UBI supporters on the right favor — by shifting income and resources away from the poor. To be sure, there is a possible exception: a carbon tax that returns its proceeds to the public via a universal payment. For a carbon tax to have any chance of enactment in the not-too-distant future, however, it almost certainly will have to allocate a substantial part of its proceeds to uses that are necessary to get the votes to enact it in the first place, such as relief for coal-producing states or regions. There’s also a powerful case for using some of the proceeds to greatly expand and accelerate research into alternative energy technologies; a carbon tax likely won’t be sufficient by itself to arrest global warming. Thus, the proceeds available from a carbon tax to finance universal payments would likely be significantly constrained. If a carbon tax could pass, we might need to focus the proceeds available for these payments on low- and moderate-income families — so the payments would be adequate to offset the higher energy costs these families would face as a result of the tax — rather than extending the payments all the way up the income scale in universal fashion.
--Spending Net Benefit
Means testing still establishes a universal floor of income but is less costly.
Tanner, 2016 – Senior Fellow at the Cato Institute [Michael D., “The Basic Income Guarantee: Simplicity, but at What Cost?” Cato Institute, August 26 2014, accessed on June 28 2017 https://www.cato-unbound.org/2014/08/26/basic-income-guarantee-simplicity-what-cost TA]
Moreover, whatever the initial size of the UBI, there will be enormous political pressure to increase it. A UBI would establish as both a legal and a philosophical concept that every American citizen is entitled to a minimum income - exacted from the taxpayers. Once that “right” is established, the political process will inevitably expand it. Murray argues that $10,000 is the correct amount. But how long before some politician comes along and says, “No one can live on $10,000. We need to make it $11,000.” Soon another politician, not wanting to be thought less compassionate than the first, will propose $12,000. There would also be pressure to “carve-out” additional payments to certain groups, like families with a person with a disability or some kind of long-term illness, adjusting for age (since the elderly have higher health care expenses), and so on. We could then get to the point that we have moved far away from the unconditional universal cash grant, to some extent sacrificing the very simplicity that makes up part of the UBI’s appeal.∂ The more affordable alternative would be to make the grant available only to those with incomes below some predefined level. While under this approach the grant itself would not be universal, it would nevertheless establish a universal floor of income below which no American would be allowed to fall. Friedman’s negative income tax takes this approach. Similarly, Murray would begin to tax back a portion of benefits for families with earned income above $25,000.
--UBI Minus Net Benefit
A targeted basic income solves better than a universal one because it avoids the need to cut existing social programs.
Aerts et al, 2023 – Centre for Social Policy University of Antwerp [Elise with Ive Marx Gerlinde Verbist February, IZA Discussion Paper No. 15952 “Not That Basic: How Level, Design and Context Matter for the Redistributive Outcomes of Universal Basic Income” https://www.iza.org/publications/dp/15952/not-that-basic-how-level-design-and-context-matter-for-the-redistributive-outcomes-of-universal-basic-income Acc 3/23/23 TA]
Proponents of a basic income (BI) claim that it could bring significant reductions in financial poverty, on top of many other benefits, including greatly reduced administrative complexity and cost. Using microsimulation analysis in a comparative two-country setting, we show that the potential poverty-reducing impact of BI strongly depends on exactly how and where it is implemented. Implementing a BI requires far more choices than advocates seem to realize. The level at which the BI is set matters, but its exact specification matters even more. Which parts of the existing tax-benefit system are maintained, and which parts are abolished, modified or replaced? The impact of a BI, be it a low or a high one, thus strongly depends on the characteristics of the system that it is (partially) replacing or complementing, as well as the socio-economic context in which it is introduced. Some versions of BI could potentially help to reduce poverty but always at a significant cost and with substantial sections of the population incurring significant losses, which matters for political feasibility. A partial basic income complementing existing provisions appears to make more potential sense than a full basic income replacing them. The simplicity of BI, however, tends to be vastly overstated. 1. Introduction As poverty persists in advanced welfare states some are advocating a radical change in approach. Long dismissed as utopian, a basic income (BI) as a potentially ironclad protection against financial poverty has gained more and more traction. This paper examines what would happen if we introduced various versions of a BI in Belgium and the Netherlands, ranging from a modest one complementing most existing provisions to a generous one replacing many existing provisions. Could a BI reduce or even eliminate poverty in both countries? What would a BI do for the people who are financially worst off? Who would gain and who would lose? Using sophisticated microsimulation analysis, we examine in detail a range of BI schemes and compare their potential impact in Belgium and the Netherlands, countries that share some important characteristics but also differ significantly in some other respects, notably their tax benefit systems and labour market institutions. This analysis is relevant to basic income debates worldwide. It is also relevant for debates on the potential harmonisation of social protection across EU member states. In contrast to common claims, it is not simply the case that the higher the BI the “better” the distributional consequences are, especially if income inequality and poverty reduction are goals. A low, “partial” BI may make more sense than a fully-fledged one that replaces most of what exists.
--AT Solvency Deficit - Take Up
A plan does not solve “Take Up” problems – even if everyone is eligible for the UBI, some people still don’t receive transfers, and those who don’t help reduce free riders.
Hanna and Olken, 2018 - prof of South-East Asia Studies and prof of Economics at MIT [Rema and Benjamin, Harvard Journal of Economic Perspectives, Fall “Universal Basic Incomes versus Targeted Transfers: Anti-Poverty Programs in Developing Countries” https://www.aeawe

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