In 18 months, the responses will show that families who were given $500 a month by the government benefited in all kinds of positive ways, and nearby businesses also got a boost. Results are already in from similar surveys in different communities, and show pretty conclusively that people like free money.
The city has taken $2 million of the $24 million it received from the federal government under the American Rescue Plan Act and invested it in an 18-month pilot program in which people will be given $500 a month to spend as they choose. 150 people will be chosen at random. To qualify, families must earn no more than 80 percent of the area median income, about $46,500 a year for a family of three.
Throughout the 18 months, they will document the ways their family has benefitted from the additional income. Armed with all those feel-good testimonials, supporters will then look to expand the program to all qualifying families.
Predictably, and sadly, the primary opposition to the program thus far has come from those outraged that poor people don’t have restrictions on how they spend their money. They’re poor, so of course they’ll spend it on cigarettes, drugs and liquor.
Some will, but addictions aren’t limited to the lower class. The bigger issue is cost and sustainability.
Warning: I’m about to do math, and that’s always a fraught proposition. And, I’m working with estimates, not exact numbers. So consider what follows as a ballpark estimate at best.
According to the latest census, the population of Las Cruces is 113,888. Setting the eligibility level at 80 percent of the median income means almost half of the families could qualify for the $500 a month. If we put the estimate at 40 percent, and calculate the total population at four people per household, that would mean about 11,400 families collecting $6,000 a year for a total annual cost of just over $68 million.
The city has two tax sources, gross receipts tax and property tax. The GRT is already set at the highest level allowed by the state.
The notion of free money goes against everything I was taught as a child about the importance of work and the value of a dollar. But the world has changed since then. Income inequality today is much greater than when I was growing up in the 1960s.
According to the Congressional Budget Office, those in the top 1 percent now earn 84 times as much as those in the bottom 20 percent. Those in the top 0.01 make 1,807 times as much, with an average household income of $43 million. They saw their income grow by 507 percent between the years 1979 and 2019, while those at the bottom had just a 94 percent increase.
That’s all by design. The top marginal tax rate in 1979 was 70 percent. Today it’s 37 percent. That’s just one of several ways in which our laws have changed to help the wealthy. There needs to be a readjustment.
So, OK, I’m open to the concept of a guaranteed basic income. Now, show me how we’re going to pay for it.
Walter Rubel can be reached at firstname.lastname@example.org.
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