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The Panama Papers prove it: America can afford a universal basic income
If the super-rich actually paid what they owe in taxes, the US would have loads more money available for public services
IMAGE 100 US dollar bills
It’s all about the money, money, money. Photograph: Alamy
We should all be able to agree: no one should be poor in a nation as wealthy as the US. Yet nearly 15% of Americans live below the poverty line. Perhaps one of the best solutions is also one of the oldest and simplest ideas: everyone should be guaranteed a small income, free from conditions.
Called a universal basic income by supporters, the idea has has attracted support throughout American history, from Thomas Paine to Martin Luther King Jr. But it has also faced unending criticism for one particular reason: the advocates of “austerity” say we simply can’t afford it – or any other dramatic spending on social security.
If you're rich, you can avoid paying taxes. That's got to change
Jan Schakowsky
The Panama Papers show how vital it is to close tax loopholes so the system’s fair for everyone. It’s a shame some of my colleagues in Congress don’t agree
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That argument dissolved this week with the release of the Panama Papers, which reveal the elaborate methods used by the wealthy to avoid paying back the societies that helped them to gain their wealth in the first place.
Roads and transportation infrastructure. Educated workforces. Courts and legal systems. Innovations sparked by government funding, such as the internet. No one – no matter how smart or hard working – joins the American or global elite without making use of these shared resources.
But while working and middle-class families pay their taxes or face consequences, the Panama Papers remind us that the worst of the 1% have, for years, essentially been stealing access to Americans’ common birthright, and to the benefits of our shared endeavors.
Worse, many of those same global elite have argued that we cannot afford to provide education, healthcare or a basic standard of living for all, much less eradicate poverty or dramatically enhance the social safety net by guaranteeing every American a subsistence-level income.
The Tax Justice Network estimates the global elite are sitting on $21–32tn of untaxed assets. Clearly, only a portion of that is owed to the US or any other nation in taxes – the highest tax bracket in the US is 39.6% of income. But consider that a small universal income of $2,000 a year to every adult in the US – enough to keep some people from missing a mortgage payment or skimping on food or medicine – would cost only around $563bn each year.
A larger income, to ensure that no American fell into absolute abject poverty – say, $12,000 a year – would cost around $3.6tn. That is a big number, but one that once again seems far more reasonable when considered through the lens of the Panama Papers and the scandal of global tax evasion. Because the truth is that we have all been robbed, systematically, by the world’s wealthiest people, for decades. They have used those stolen dollars to build yet more wealth for themselves, and all the while we have been arguing with ourselves over what to do with the leftover pennies.
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The biggest leak ever - Panama Papers video explainer
Enough. We have the money to solve our problems. The first step is to stop the global elite from hoarding and hiding it. Cracking down on tax evasion alone will not fund all our priorities, but the Panama Papers do put the lie to the politics of austerity.
A universal basic income would go a long way towards ensuring all Americans can have life, liberty and the pursuit of happiness, as promised way back in 1776. Some may disagree with the notion of an unconditional cash grant, or object to it going to everyone. Just don’t say we can’t afford it.
Topics
Money
Opinion
US income inequality
Tax havens
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