It's a good question, but really, his government is already taking his money and giving it to the poor in the form of existing (means-tested) social programs, that have an additional effect of creating an extreme disincentive to work, since you get disqualified from those as your income grows.
Replacing all means-tested government aid to the poor with a simple check to everyone would dramatically cut program costs and abuse, and quite likely actually result in more people getting actual jobs. It would also be a good reason to repeal the minimal wage laws, since there would be no rationale for them any more. To me, this seems like a pretty good tradeoff, even if overall tax rates go up a little to pay for it.
The main danger I see in this is that with the system in place, there would be continuous public pressure on the politicians to keep increasing the basic income level, until productive employment becomes not profitable any more and the economy collapses. Of course this problem is inherent in any welfare society, but I think it's more dangerous here, because of the sheer transparency. But if anyone can make this work, it's probably Switzerland, and we would all learn a lot from the experiment.
The danger is more subtle than that. There is also the danger that productivity decreases enough that the Swiss GDP cannot support the entitlement at acceptable levels, even without blatant pandering to political factions.
I wonder if some sort of regressive payout as a function of income (as in a logarithmic curve) doesn't make more sense. With a guaranteed base income, this would actually encourage working- and middle-class productivity. The entitlement would then be a multiplier of work, not a substitute for it.
If the basic income is reasonably low (the income figure seems high for the US, but cost of living is much higher in Switzerland), I don't see a major decrease in productivity. If anything, I see an increase, due to elimination of extreme disincentives the means-tested programs create. But there surely is a level at which what you are describing would happen, and that is exactly what I am worried about.
The regressive payout sounds like a good idea, but isn't it equivalent to just flattening the income tax?
> there surely is a level at which what you are describing would happen, and that is exactly what I am worried about
Yes. Essentially the Swiss will be gambling that the legislated payouts won't be high enough to trigger that scenario.
I can take your question about income taxes several ways, but I will say that progressive income taxes make much less sense when coupled with a guaranteed minimum income.
Also, a regressive payout has the opposite effect of a progressive income tax since the regressive payout enhances a household's ability to net more income while a progressive income tax makes it harder to net additional income.
Though disincentivizing marginal productivity may acceptable if the ultimate goal is redistribution of wealth instead of simply reducing the tax burden of people with modest incomes.
Replacing all means-tested government aid to the poor with a simple check to everyone would dramatically cut program costs and abuse, and quite likely actually result in more people getting actual jobs. It would also be a good reason to repeal the minimal wage laws, since there would be no rationale for them any more. To me, this seems like a pretty good tradeoff, even if overall tax rates go up a little to pay for it.
The main danger I see in this is that with the system in place, there would be continuous public pressure on the politicians to keep increasing the basic income level, until productive employment becomes not profitable any more and the economy collapses. Of course this problem is inherent in any welfare society, but I think it's more dangerous here, because of the sheer transparency. But if anyone can make this work, it's probably Switzerland, and we would all learn a lot from the experiment.