How Math Could Work For The State Funded Universal Basic Income In Arlington – Greater Greater Washington
Income inequality is rife around the world and the United States is one of the biggest offenders. Consider Arlington County, which has an incredibly unequal geographic distribution of income – while only 2% of children in Tuckahoe Elementary School get free lunch, 81% qualify just three and a half miles to elementary school. Carlin Springs.
Arlington is quite progressive in helping those in need, perhaps because of this disparity. In addition to federally funded meals, about 1% to 2% of the county’s budget is spent on affordable housing each year. As Housing Commissioner, I have come to appreciate how hard county staff work to connect families with the benefits to which they are entitled.
But I’ve also come to believe that there is a much better way: the Universal Basic Income (RBI). Every Arlingtonian, rich or poor, could receive $ 550 a month, leaving few families below the poverty line, if the property tax rate were tripled. The net income of a family of four living in a house worth less than $ 1.36 million would be higher because that UBI dividend would exceed the tax increase.
UBI is a form of social assistance in which everyone receives the same amount of money with no strings attached to how it is spent. It’s simpler than the myriad of forms of specific programs we currently have (e.g. housing vouchers, food stamps, etc.), fairer because it treats everyone equally (i.e. ‘that is, there is no income, number of children or age to satisfy), worthy in that the socio-economic status of a person is not revealed in the expensive (thus avoiding embarrassment and discrimination), and effective because it requires less administration by government officials (eg no “means test”). Fears that it will discourage people from working or that beneficiaries will spend it frivolously have been discredited by numerous studies. Its supporters cross the political spectrum and include Martin Luther King Jr. and James Baker.
Nationally, what comes closest to a UBI now is the Working Income Tax Credit (EITC), which is partially matched by many states. While the size of this credit and those who qualify for it have grown over time, there is still a requirement for work and the maximum annual payment is less than $ 7,000. The EITC is therefore neither universal, in the sense that not everyone gets it, nor basic, as it alone is not enough to provide adequate food and shelter. Given today’s partisan politics, it might be some time, if ever, before another US president attempts to enact a UBI (Richard Nixon’s attempt in 1970 was blocked by the Senate controlled by Democrats).
In the meantime, some municipalities have piloted or are piloting their own programs, including Arlington, Alexandria and Montgomery County. These three programs in the DC area provide between $ 500 and $ 800 per month to 150 to 300 families for 18 to 24 months. As with a UBI, there are no restrictions on how the money is spent, but because the funding levels are so low and are only for a limited time, these programs are neither universal nor basic. In addition, the Arlington program is funded solely by private donations.
So how could Arlington indefinitely extend its pilot program, expand it to lift every family out of poverty, and do it using public funds instead? With a population of 228,000, it would take $ 1.5 billion each year to give each person, including children, $ 550 a month. For a family of four, that works out to $ 26,000 per year, which is the level of poverty for a family of this size (and well below Arlington’s median household income of $ 120,000 per year). Parents could collect on behalf of their children, possibly saving a portion to pay for college education.
Where could this money come from? In 2021, about half of Arlington’s budget came from a 1.026% property tax that brought in $ 795 million. An additional $ 1.5 billion could be realized with a tax rate just under 3%.
$ 1.5 billion may seem like a huge new tax for a county that currently has a total budget of only $ 1.8 billion. But since everything would be returned as cash, it’s best to consider what the change in household net income would be after adding the UBI and subtracting the new, higher tax. This would of course vary depending on the size of the family and the value of their home. The break-even points are simple to calculate: those who own a home for $ 1.36 million for a family of four, $ 680,000 for a couple, and $ 340,000 for a person living alone. Families living in homes valued below these prices would see their net income increase; those with higher home values would see a corresponding decrease.
And the tenants? While they don’t pay property tax directly, their landlords would likely increase the rent to offset the tax hike. But since the tenants would also get the UBI dividend, they would have to have the extra income to cover it. It’s unclear exactly how a wealth transfer of this magnitude would affect things like property values and housing density, but it is something we could learn and investigate as a UBI is gradually implemented. .
It’s important to note that $ 550 per month per person is higher than an Arlington Housing Grant (which is similar to a Federal Housing Bond), so even if this program were replaced by a UBI, these families would always see an increase in their income.
How do you get there from here? Since the average estimated value of a single-family home in Arlington, at $ 1 million, is below the breakeven point, and the median is expected to be even lower, many more people will benefit from a UBI than not. We just have to get them to vote.