Hawaii Wants To Guarantee Minimum Income For Everyone

Steven P. AhleSeptember 5, 2017

0 217 2 minutes read

Hawaii abortion — Hawaii state capitol from the south-east. Wikimedia Commons

Money for nothin’ and chicks for free.

This plan goes far beyond the Fight for Fifteen (FFF). FFF gives a minimum wage for all, but this plan, which goes to everyone, will promise a wage whether recipients work or not. This is the ultimate in redistribution of wealth. If Hawaii gave $10,000 to everyone of working age in Hawaii, it would cost ten billion a year. Where does that money come from?

Let’s say they tax companies that use technology to replace workers. At what rate would they be taxed in order to be able to pay for such a program? It would certainly have to be high in order to cover that much money. But ask yourself, what is more likely, companies forking over a much higher share of their profits or companies moving to red states where the guaranteed minimum income will never be enacted?

Would they have to raise income taxes on the middle and lower classes? Almost certainly. And how many of those people will decide it makes more economic sense to quit working and collect their guaranteed wages? My guess is that it would be more than just a few.

Will this presidential election be the most important in American history?

Yes

According to CBS News:

In the long run, that would likely be decided by political leaders. For now, philanthropic organizations founded by technology entrepreneurs have begun putting money into pilot programs to provide basic income. The Economic Security Project, co-led by Facebook co-founder Chris Hughes and others, committed $10 million over two years to basic income projects.

A trial program in Kenya, led by the U.S. group GiveDirectly, is funded mainly funded by Google; the Omidyar Network started by eBay founder Pierre Omidyar; and GoodVentures, co-led by Facebook co-founder Dustin Moskovitz.

Providing a basic income in expensive countries like the United States would, of course, be far costlier.

Tom Yamachika, president of the Tax Foundation of Hawaii said:

“Basic income is such a broad subject, it could encompass hundreds of different kinds of mechanisms to help families. You don’t have to enact the entire thing in one massive program. You can take bits and pieces that make sense.”

Karl Widerquist, co-founder of the U.S. Basic Income Guarantee Network countered with:

“If people in Alaska deserve an oil dividend, why don’t the people of Hawaii deserve a beach dividend?”

His argument doesn’t hold water and compares apples to buffalo dung. Alaska has a sparse population and the money comes from the usual fees paid by oil companies and is surplus income for the state. Hawaii, on the other hand is more densely populated and adding a new tax to tourist sites and hotels would probably end up producing negative income.

Vacationing in Hawaii is already expensive and the total income from tourism in Hawaii is 15.6 billion dollars in 2016. That leaves you either with having to take nearly every dollar coming in from tourism after taxes to reach $10 billion dollars or increasing the costs that tourists would have to pay to vacation there by at least 50%. That would lead to fewer visitors and thus less income.

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