“The real problem advanced societies face has nothing to do with poverty, retirement, health care, or the underclass. The real problem is how to live meaningful lives in an age of plenty and security.”
The idea of a negative income tax is one of the few public policies that seems to appeal to both left and right, though admittedly the left prefers the name basic income or guaranteed minimum income. In brief, the idea is that people making less than a given amount get money from the state until they are making that amount: those that make more than that get a reduced subsidy or nothing. In principle, it can then replace a diverse set of loophole-rich, easily abused welfare programs, appealing to the right; and ensures that no one in society is without a certain basic wage, appealing to the left.
Tax reform is not exactly an issue with wide appeal. In Our Hands makes the case for a negative income tax by talking not just of the cost savings but also of the social and political implications, making the book of wider interest than just to economists. Murray lays out the possibly savings from eliminated welfare programs, and argues that though a negative income tax isn’t economical yet, it will be in the next few years as costs and populations increase. By ensuring everyone has a stake in society and some source of income, he argues, it also encourages responsible citizenship and participation in the world.
He neglects some questions that seem of interest, however. Long run, some might worry that pseudo-classes defined by whether someone receives the benefit could form. The policy is also vulnerable to politics: as soon as it is created it will be subject to massive political fights which, based on the current disputes about minimum wage, will have little to no relationship to reality on either side, and keeping it to the optimal level might be difficult.
The book is unabashedly an argument from the right, and in some ways that’s the book’s greatest weakness; many on the left might also support the policy, but I’m not sure In Our Hands is the book to sell them on it. That said, for a left wing reader willing to make the effort, the book does have information and arguments for both sides. Murray’s design also has some odd parts, such as giving $5,000 to all citizens, rather than eliminating it over a certain income bracket to reduce costs. Still, an important policy, and a good way for someone without a background in tax to start thinking about some of the issues, though much more needs reading (and writing!) to reach conclusions.