2016-07-21

Introducing The BEG

What with all the libertarians out there attempting to write justifications for a Universal Basic Income, i.e. a welfare payment from the government given to every man, woman, and child simply for existing, a thought occurred to me. That thought was, If a Basic Income Guarantee is justifiable under libertarianism, then so ought be its opposite, a Basic Excise Guarantee.

What I mean by "Basic Excise Guarantee" (hereafter, BEG) is not the "certainty of death and taxes" we've all heard about before, but rather the literal opposite of a UBI. The UBI is a guaranteed payment from the government that you get simply because you exist. The BEG, then, is a tax justified by nothing more than the fact that you exist. You pay a tax not because you own certain kinds of property or engage in certain activities, not because our government needs funds to enforce the social contract, nor as a behavioral-economic "nudge" to prevent you from smoking. No, a BEG is a tax you pay because you exist, and by virtue of your own existence, you owe money to your state. No matter your place in life, your age, your ability, your means, or your demographics, a BEG would charge you a single tax level.

If you prefer, you can consider the BEG a negative UBI, in the same sense that the UBI is, as Samuel Hammond has recently argued, a negative income tax. However, income taxes are not levied universally, but rather they are only levied on those who earn income, whereas most formulations of the UBI are truly universal. The BEG, then must be universal in exactly the same way as the UBI.

Please note: My purpose here is not to advocate for a BEG, but rather to highlight the fact that a BEG is equally as justifiable as a UBI. In doing so, I aim to highlight the important shortcomings of arguments in favor of the UBI, for if they fail to justify a BEG, they must also fail to justify a UBI for exactly the same reasons.

I thought I'd start by going through the various cases that have been made for the UBI in the economics and libertarian blogging landscape over the years, and addressing the arguments directly. This has two primary benefits: First, I'll be able to learn a lot about the arguments for a UBI as they were being made during the time they seemed to have been most convincing, i.e. in context. Second, I'll be able to build on my arguments against the UBI in the same sequence that the arguments justifying them were made. 

Today I'm taking a look at Jessica Flanigan's 2012 blog post at Bleeding Heart Libertarians on this topic, and searching for weak points.

A BEG Mitigates Coersion

At the time it was written, the authors at Bleeding Heart Libertarians were attempting to differentiate themselves from "hard libertarians," mostly Rothbardians of the Lew Rockwell variety, by framing arguments in terms of "social justice." But "social justice" is an ambiguous phrase, and there was a lot of controversy across blogs as to just what it meant, and whether such a concept was even compatible with libertarianism, "hard" or otherwise. Thus, Flanigan states early on in her piece:
When I say ‘social justice,’ I mean UBI. Below are several arguments for a basic income. I don’t endorse them all, but I’m including them all to show that there are many libertarian paths to this kind of ‘social justice’ conclusion.
For Flanigan, then, "social justice" (to paraphrase Adam Gurri)  just is a Universal Basic Income.

The problem with this point of view is that Flanigan assumes that which she needs to prove. There are a few different angles here, too, but the most difficult to swallow is that a UBI is sufficiently powerful to redress all other social justice issues.

Let's consider that claim by way of example: I happen to think that African-Americans have experienced a long history of social injustice as a result of early America's complicity in the slaving system, and the bigoted culture it produced even after the Emancipation Proclamation. Few people would disagree with me. Under Flanigan's conception of libertarianism, whatever the lasting social impacts of this matter might be - including some thorny legal issues as-yet unresolved - a libertarianism that includes a Universal Basic Income is sufficient to address this sort of social injustice.

Do we really believe that paying African-Americans a monthly welfare stipend - one which also went to every white person in the country, no matter how priviledged - would correct the kind of social injustice experienced by people of color in America? I certainly don't.

Now let's consider a BEG. Given that privileged, white, wealthy people have carved out an unfair systemic advantage in America, couldn't we re-frame social justice as libertarianism with a compulsory, universal tax? That is, perhaps we can close all those unfair tax loopholes by mandating a universal tax paid by every man, woman, and child. Granted, this would place a significant burden on poor people and people of color, few of whom benefit from egregious tax loopholes, but by levying the BEG on the wealthy, we could partially correct outcomes in terms of social justice.

That sounds like a decent justification for progressive taxation. I wonder what Flanigan might think of it? I can't know for sure, but here's what she wrote in her blog post (all emphases in the original):
So any state-run property system is impermissible, but moral reasons still weigh in favor of certain property systems over others. In particular, the balance of moral reasons tells against adopting a system of property rules that causes innocent people to starve (a totally ‘free market’ system) and also against a system that requires constant interference in everyone’s lives and leveling down (an egalitarian system). A UBI balances our claims that states not prevent us from 1) meeting our basic needs and 2) pursuing important projects, including economic projects, without excessive interference. 
This position is not absolutist- I just mean that to the extent that states coercively prevent either 1) or 2) the property system is morally worse. This view also doesn’t hinge on the idea of positive duties, about which I remain ambivalent. Rather it is just to say that people have claims against coercive interference, and that a UBI will mitigate the wrong of a coercive system of property better than a totally free-market or egalitarian system.
Flanigan uses the phrase "egalitarian system" to denote the sort of progressive taxation scheme I've just mentioned. Apparently she rejects such a system on grounds that it "requires constant interference... and leveling down" and that "people have claims against coercive interference."

Notice, however, that both a UBI and a BEG (read: "egalitarian system") involve coercive interference. Flanigan is simply choosing which one she prefers. In her defense, she admits that this isn't a "full argument," but all she's really done is sketched out a case for a minimally invasive social justice policy - not any policy in particular. Thus, she cannot reject a BEG/"egalitarian system" on the grounds she presents thus far; nor can she justify a UBI.

A BEG Is Market Friendly

Flanigan's next point is that the UBI is market friendly:
Second, the UBI is relatively market friendly. As Hayek (also a fan of the UBI) argued, states provide services in ways that distort markets and crush private competitors that would better reflect the diversity of our values.
So, too, is a BEG market friendly in exactly the same way. Gone are loopholes, tax credits, and write-offs in the tax code that serve to benefit some kinds of economic activity over others. Just as Hayek would have preferred to replace the entire welfare system with a UBI, so too, ought we replace the entire tax code with a BEG to avoid distorting market behavior.

Flanigan says the UBI minimizes "adverse incentives" and keeps government small. A BEG would likewise eliminate the need for a large Internal Revenue Service in charge of administering tax complexities and replace it with a simple, easily enforced question: Did you pay your BEG this year, or didn't you? It would also spare households the indignity of having to report the intimate details of their financial lives, risking embarrassment (at best) or identity theft (at worst) just to pay the government what they owe.

A BEG Justifies The Existence Of Government

Flanigan's third justification for the UBI - really, a set of justifications - is as follows:
Third, consider libertarian types like John Tomasi, Loren Lomasky, and Gerald Gaus, who argue that a UBI makes state power justifiable. Tomasi thinks that impartial institutional designers would first choose to protect important liberties (including economic liberties like contract and ownership) but then they would endorse redistributive policies to benefit society’s worst off within the limits of said liberties. Lomasky argues that a coercive system of property is only justifiable to everyone if it gives everyone enough to pursue their projects and have meaningful lives, and this may require a UBI. Gaus thinks any reasonable citizen must accept that some modest redistribution is permissible. I also suspect that this is what Jason was getting at earlier, but I’m not sure. In any case, I’m not convinced by all this Rawlsian public justification and moral powers talk, but if you are, these are reasons for the UBI.
A major upshot of the BEG is that it renders all of these arguments irrelevant. By assumption, a Basic Excise Guarantee is what you owe your government by virtue of your own existence. You come out of the womb with a debt to your masters, and without paying that debt, you cannot hope to expect proper enforcement of liberties or redistributive policies. Thus, you would have no reasonable expectation for a meaningful life.

Flanigan likely wouldn't be convinced by such an assumption, but if you are, it's a reason to implement a BEG.

In truth, though, Flanigan ought to be convinced by this argument. Why? Because in her very next paragraph, she writes this:
Even if you were entitled to your property holdings, you are not entitled to coercive public enforcement of those holdings. Just because we have negative rights doesn’t mean that those rights merit full public accommodation. Once libertarians start demanding that their property is protected and their rights are publicly enforced, we can think of taxes as the public fee for that enforcement.
Flanigan has made my case for the BEG on my behalf!

Look, you don't buy and drink a gallon of milk before you pay for it - you buy it first, and then drink it. Even in restaurants, where we typically do eat first and then pay, there is an a priori assumption made as soon as we place our order with the wait staff that we will pay our bill in full. So it goes with liberty: you can't have it unless you pay for it, which means you owe your fee the minute you begin enjoying your supposed liberty, i.e. at birth. There should be no reason to think that you will receive public enforcement of your liberties, including property rights, unless there is also reason to assume you will be paying your fee. That is, after all, what a social contract is all about.

Conclusion*

Alternatively, some people think that paying taxes promotes an overall feeling of civic involvement. (See above.) Or, say you think that freedom requires the ability to leave a coercive workplace without terrible consequences. A BEG will ensure that no employer is so monetarily privileged that he can create coercive workplace arrangements with his employees, according to this thicker conception of voluntary. The BEG also doesn't take a stand on how people spend their money, and in this way, it avoids paternalism, unlike, say, a marriage tax credit. Additionally, a BEG would reduce some of the stigma associated with tax debt, and while the government isn't required to encourage people not to be social freeloaders, it would be nice. Finally, maybe positive duties to pay into society do exist, even in the absence of a system of taxation. If so, a BEG could help on that front.

These arguments for the BEG also explain why libertarianism at its best is aligned with the state. The world is really unjust in part because states coercively enforce laws that make people really badly off. On this we agree. Sufficiency is on the path to priority or equality, so for a while, libertarians and statists can walk the path from here to social justice together.

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* Note: This entire section is a paraphrasing of Flanigan's exact language.