Basic Income

What is 'Basic Income'

Basic income is a system similar to Social Security, in which all citizens of a country receive a set amount of money on a regular basis. This money is typically provided by the government or a similar public organization. This income, provided unconditionally, is given in addition to any income for which a person works. The goal of a basic income system is to allow every person to have a fair chance at an adequate quality of life. It is a way to combat income inequality and ensure that each citizen has enough money on which to live.

Partial basic income refers to basic income at an amount below the poverty line.

BREAKING DOWN 'Basic Income'

Basic income is common in systems such as socialism, which aims to narrow the gap in income inequality and give each person the same chance to build a life. In socialist structures, basic income tends to be paid for by the profits of publicly-owned organizations. However, capitalist structures can also include a basic income system. In the cases of capitalist countries, basic income tends to be paid for by taxation, and the payment often comes in the form of a tax credit rather than an actual payment.

Examples of Basic Income Systems

America currently employs systems similar to basic income, specifically for low-income individuals. The Earned Income Tax Credit (EITC) qualifies low-income individuals for tax breaks, which in some cases can result in a refund for the individual. To qualify for the credit, a person must earn below a certain annual income and meet other eligibility requirements, including having a child or not qualifying as a dependent on someone else's tax returns. Other systems are currently in place to help low-income individuals meet their basic needs, including Medicaid for health care, the Supplemental Nutrition Assistance Program (SNAP) for food, and the Department of Housing and Urban Development (HUD) for shelter. 

Criticism of Basic Income

As with any social system or government program, basic income generates controversy. On one side, it levels the playing field – no matter how much money you make, each person is guaranteed a set sum of money in fixed intervals, which allows people to live independently. On the other side, it's difficult to develop the organization and structures required to make a basic income system function the way it ideally should, which means that a true basic income system is more of a utopian dream than an achievable reality. True basic income systems have been attempted in the past, and judging by past performance, it is unlikely that one will be successful anytime soon. However, as the world grows and advances technologically, new ideas and methods could affect the success of such a system in the future.