The newest June budget forecast released on Tuesday shows that every Colorado taxpayer will now get a dividend of at least $750 this summer, with some families getting up to $1,500.
The rebate is part of Colorado’s Taxpayer Bill of Rights, also known as TABOR. Normally, any excess revenue generated by the government is returned to taxpayers when they file their taxes in the first quarter of the year, but this year lawmakers have approved a special payment that will be issued to taxpayers in August.
“The economy in Colorado has out-performed by a lot from those initial projections,” Gov. Jared Polis said.
“We are providing real relief when Coloradans need it most. Everyone in our state is feeling the impact of rising costs, and I refuse to let the government sit on taxpayers’ money when it could be used to make life a little bit easier for the people of our state. I am thrilled that due to our strong economy, Coloradans will be receiving nearly double what we initially hoped, with $750 for individuals and $1,500 for joint filers,” said Gov. Polis.
“We are getting money back to people as quickly as possible, providing much-needed relief to Coloradans and their families,” said State Treasurer Dave Young.
To be eligible to receive the rebate in August, taxpayers must file their 2021 tax return before June 30 or apply for the Property Tax/Rent/Heat Rebate Credit by the same date. Those who file for an extension in October should expect to receive their refund check in January.
Every full-year Colorado resident who was at least 18 years old on December 31, 2021 should file a Colorado return to claim the Colorado Cashback Rebate even if they did not have taxable income. Those who filed by April 15th do not need to take any additional action and will automatically receive their refund in the mail later this summer.
If you want to solve poverty, you can’t do it without listening to women, and particularly women of color. As my wife, Anna Malaika Tubbs, has noted, women of color are the folks most consistently treated as invisible, whose histories are ignored or erased. They also absorb the brunt of policy violence — legislative decisions that keep families trapped in poverty: over-policing, mass incarceration, family separation, low wages, no good jobs, lack of health care or child care, and more.
End Poverty in California recently launched our statewide listening tour at the Young Women’s Freedom Center in Los Angeles. Through 2022, we will visit communities experiencing poverty, hear community members’ stories and ideas, and explore solutions. For 30 years, the freedom center has delivered opportunities to young women and trans youths of all genders who are affected by social systems such as incarceration and foster care — a perfect place to begin our tour.
At the freedom center, we were welcomed by more than 50 Sister Warriors joining us from across the state. While the freedom center develops new policy, the Sister Warriors Freedom Coalition is the army fighting to see these policy changes realized. The coalition has 2,000 members in 14 chapters across California, and they share their stories with legislators to try to make policy proposals responsive to their needs.
Many have grown tired of sharing stories.
As coalition co-founder Krea Gomez said, “We have conversations with legislators who say, ‘I’m so glad you shared your story!’ and then they water down legislation [and] we have to wait years to revise it.”
So my promise is that we aren’t listening for listening’s sake. We are listening to build power and to take meaningful action together.
Many Sister Warriors talked about the “benefits cliff” — financially getting ahead just a bit only to have progress result in the loss of a child care subsidy, or food or housing assistance. There are opportunities for reform.
In Stockton, we worked with the county to obtain waivers so people who participated in our guaranteed income pilot wouldn’t lose other benefits. The “benefits cliff” issue is on the radar of state officials and some county welfare directors, and conversations to pursue positive reforms are happening. End Poverty in California will bring Sister Warriors into those conversations to inform design.
Women also discussed their experiences with incarceration. Angelique Evans spoke of earning seven to eight cents an hour while working in jail, deepening her family’s poverty.
The freedom center is working to amend the state Constitution so that involuntary servitude is no longer permitted, and to ensure that people are paid a wage comparable to that received for similar work outside of prison to help families and support reentry into the community.
There is anger at resources being used to punish struggle rather than prevent it. Jessica Nowlan, executive director of the freedom center, noted that the cost of incarcerating a juvenile in San Francisco is astronomical — the San Francisco Chronicle reports that it is $1.1 million annually per juvenile — and most are Black and from a few neighborhoods. What if these resources instead had gone to families to provide a guaranteed income floor? How might a family’s trajectory change?
Finally, a Sister Warrior spoke of advocacy organizations being afraid to talk about the lack of resources available to undocumented immigrant families. There is no solution to poverty in California without finding ways to be more inclusive of immigrants.
Gov. Gavin Newsom’s budget proposal would expand Medi-Cal eligibility to all income-eligible undocumented immigrants, and food assistance to all immigrants who are 55 or older, as would the Legislature’s budget blueprint.
There also are legislative proposals to extend unemployment benefits to undocumented workers, and to expand food assistance to all income-eligible immigrant families and individuals. We should continue to explore these reforms as well.
We departed the session in Los Angeles with a sense of the exhaustion people feel from sharing their stories, but hope that their voices might make a difference. Beyond hope, we know that poor people and allies must organize so that our constituency one day will be as powerful as other interest groups that maintain outsize influence in the state.
On Tuesday in Sacramento, we have an opportunity to do just that. There will be a rally prior to the inaugural hearing of the Assembly’s Select Committee on Poverty and Economic Inclusion, chaired by Assembly member Isaac Bryan, a Democrat from Baldwin Hills. We will make our voices and our priorities heard. Please join us.
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About the author:Michael Tubbs is the founder of End Poverty in California and the senior fellow at the Rosenberg Foundation. He is the special adviser to Gov. Gavin Newsom on economic mobility and former mayor of Stockton.
Policymakers are looking for ways to break the stalemate over extending temporary enhancements to the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) that have now expired. Today, Republican Senators Mitt Romney, Richard Burr, and Steve Daines released a proposal that shows a possible way forward: the Family Security Act 2.0. It’s the latest iteration of a previous Romney proposal aimed at supporting families and simplifying an array of family-related tax benefits. This report provides a preliminary analysis of the reform package.
We find that the new Romney plan would reduce marriage penalties built into several existing family tax benefits and reduce child poverty by 12.6 percent. The proposal also reduces complexity in the tax code by reforming or consolidating five distinct tax benefits — the CTC, EITC, Child and Dependent Care Tax Credit, Head of Household filing status, and State and Local Tax deduction — into just two: an enhanced child benefit and simplified EITC.
Net impact of reforms on families
The net impact of the Family Security Act 2.0 would be to lift over 1.1 million children out of poverty, a 12.6 percent reduction in the child poverty rate.
Table 1: Estimated poverty impact of Family Security Act 2.0
*The Supplemental Poverty Measure (SPM) is an extension of the Official Poverty Measure that accounts for the value of many government benefits aimed at low-income households. Poverty analysis was conducted using the 2020 Annual Social and Economic Supplement to the Current Population Survey, adjusted for population growth. We decided against using the 2021 edition due to the large-scale disruptions to the labor market in that year related to the COVID-19 pandemic. Adjustments of estimates based on SSN/ITIN tax filing status were calculated based on figures produced by the Migration Policy Institute.
Reforming the Child Tax Credit
The Family Security Act 2.0 plan modifies the existing Child Tax Credit in five ways.
First, it increases the benefit, which varies by the age of the child. It boosts the current CTC, currently worth up to $2,000 per child under 17, to $3,000 per child ages 6-17, and to $4,200 per child under age six. Because parents of young children are earlier in their careers and face additional expenses related to pregnancy and child care, research suggests that extra support for families of young children is especially crucial to ensure appropriate child development. The benefit would then phase-out gradually for incomes above $200,000 for single filers and $400,000 for married filers in line with the CTC’s existing structure.
Figure 1: Current and proposed child benefit structure
Second, it shifts administration from the Internal Revenue Service to the Social Security Administration (SSA) and gives families the option to receive benefits on a monthly rather than annual basis. This has several potential advantages for ensuring timely and reliable delivery of child benefits to families. The change is possible because, while the existing CTC is based on current tax-year income and thus can only be claimed upon filing at year-end, the Family Security Act 2.0 plan bases eligibility on parents’ income the previous tax year.
Third, it expands the Social Security Number (SSN) requirement to parents. Under current law, noncitizen households with a Taxpayer Identification Number (ITIN) are eligible for the CTC as long as each child claimed has a valid SSN. Under the Family Security Act 2.0, families will be eligible to receive the child benefit so long as at least one parent possesses an SSN.
Fourth, the plan substantially changes the current income requirements and phase-in rate for the CTC. Under the Family Security Act 2.0, households must earn $10,000 to receive the full benefit — far below current thresholds — and families can get the entire credit for up to six children. Below the $10,000 threshold, the benefit phases in proportionally with income. Meanwhile, the rate at which that proportional phase-in occurs varies with the maximum possible amount a family would get if they crossed the $10,000 earnings mark. That effectively quickens the phase-in for families with more or younger children. These changes result in a considerable expansion of benefits to working families whose wages are below the federal poverty line.
Figure 2: The Family Security Act’s dynamic income requirement
Figure 2 illustrates the impact on lower-income families. For example, family who earned $9,000 last year with two children (both aged six or older) would receive 90 percent of their maximum possible benefits — $5,400 total. In comparison, the current CTC phases in after $2,500 in earnings at a flat 15 percent up to $1,400 per child. The remaining $600 of the CTC are only available to be offset against taxes, excluding families who don’t earn enough to pay income tax. As a result, that same family with two children currently only receives about $975 at $9,000 of income, not drawing the full benefit until they have earned around $32,000.
Lastly, the plan makes families eligible to receive benefits earlier. Under the existing CTC, families must wait until the tax season following the birth or adoption of their child to claim the credit. The Family Security Act 2.0 allows parents to receive a portion of benefits beginning four months before the birth of their child. This change would provide expectant parents with additional resources to prepare for their child’s arrival, helping support prenatal health.
Reforming the Earned Income Tax Credit
The Romney-Burr-Daines plan also undertakes a significant reconstruction of the EITC. The proposed changes come in three steps.
First, it shifts most child-related benefits from the EITC to the new child benefit discussed above. This change puts the United States more in line with best practices in other countries. For example, most countries typically have distinct child benefits, aimed at helping parents with the cost of raising children, and in-work benefits, aimed at ensuring low-wage households are better off working than receiving unemployment benefits.
Second, it substantially reduces marriage penalties built into the existing EITC, the structure of which results in many working-class households losing benefits if a parent marries their partner. Marriage penalties in the tax code arise when the combined value of tax credits and deductions for two single individuals arbitrarily drops when those same individuals marry and file taxes jointly. Whereas other proposals effectively double marriage penalties in the EITC, the Family Security Act 2.0 reconfigures phase-in/out thresholds to reduce marriage penalties for childless couples and single-parent households.
Figure 3: Current and proposed EITC parameters (1 Child)
Lastly, it dramatically simplifies benefit amounts, and phase-in and phase-out rates based on income and family status. The existing EITC is plagued by high error rates, which studies show are driven by the complexity of the rules around claiming a child. The need to return overpayments or risk an IRS audit create large administrative burdens on families. The Family-Security Act 2.0 streamlines several components to reduce compliance costs and confusion.
Figure 4: Current and proposed EITC parameters (childless)
In short, under the Family Security Act, the portion of the EITC benefit that varies based on the number of children is rolled into the expanded child benefit, simplifying the earnings credit while roughly doubling the maximum EITC for childless adults.
Further simplifying the maze of family benefits
In addition to the consolidation discussed above, the Romney-Burr-Daines plan eliminates the Head of Household (HoH) filing status, Child and Dependent Care Tax Credit (CDCTC), and State and Local Tax (SALT) deduction and redirects their funds to the more generous child benefit replacing the CTC. This consolidation builds on CTC reforms included in the 2017 tax law, which shifted benefits down the income ladder by consolidating the relatively regressive dependent exemption into a larger CTC that reached more working-class families.
The HoH filing status provides a larger standard deduction to a single individual with at least one child than a single individual without one. Married couples receive no such bonus related to children. HoH filing status is the most regressive tool for delivering benefits to children in the federal tax code. As the figure below illustrates, it provides generous benefits to high-income households but little to no benefit for low-income households.
Figure 5: Head of household filing benefit (Individual income tax only)
The HoH filing status benefit is perhaps the most regressive source of marriage penalties in the U.S. tax code, delivering larger benefits as income increases not just on the personal income tax side but across other components of the tax code as well, including long-term capital gains. The Family Security Act 2.0 follows the British experience, where policymakers in 1998 eliminated a similar benefit limited to single parents by integrating it into an expanded child benefit available to all families.
Similarly, the CDCTC is a nonrefundable credit tied to paid child care, excluding the overwhelming majority of lower-income families, who tend to rely on family care arrangements or center-based care that is paid for with vouchers. Among the lowest-income quintile of households with children, only 0.2 percent claim it. Evidence also suggests that, among those able to claim it, much of the benefit is passed through to providers through higher child care prices.
Lastly, the SALT deduction allows itemizing households to deduct up to $10,000 in state and local taxes paid. It does not contribute to family economic security in any meaningful way. The vast majority of its benefits flow to the highest-income families.
Conclusion
Many members of Congress found themselves disappointed by the failure to come to a workable compromise on a permanent expansion of the child tax credit. The Romney-Burr-Daines plan offers an innovative way forward by addressing longstanding conservative concerns about the potential impact of our family security system on work, marriage, and poverty. It merits close consideration.
Joshua McCabe is the Niskanen Center’s senior family economic security analyst, and works on issues related to child poverty and household stability. McCabe previously worked as an Assistant Professor of Sociology and Assistant Dean for Social Sciences at Endicott College.
Robert Orr is a Niskanen Center social policy analyst who works on social insurance policy issues, health care, and labor market issues within the social policy team. He previously worked at the Cato Institute as a research associate, and as a graduate research fellow for the Mercatus Center at George Mason University.
A group of more than 40 racial justice organizations are calling on leaders in Congress to reinstate the enhanced child tax credit.
In a letter sent to Senate Majority leader Chuck Schumer, D-N.Y., in May, organizations including Unidos, the NAACP, the Economic Security Project, National Urban League, Community Change Action and The Leadership Conference noted the consequences that ending the benefit has had on Americans with eligible children.
“The impact of the end of monthly CTC payments has been particularly profound — and painful — for communities of color,” the letter states.
How the child tax credit helped families
The child tax credit was enhanced as part of President Joe Biden’s American Rescue Plan, signed into law in March 2021. For the last six months of 2021, families with eligible children received monthly payments of up to $300 per child through the credit. The second half of the credit was delivered to families this year in the form of a tax refund.
The benefits of the enhanced credit were widespread, lowering child poverty, food insecurity and financial anxiety for millions of families with kids. Those results were most prominent for Black and Latino children.
Making the credit fully refundable — meaning that families with no or very little earned income could still receive its full value — extended the benefit to 27 million children, according to data from the Center on Budget and Policy Priorities. That included half of Black and Latino children who were previously unable to qualify for the credit or only got a partial benefit.
When the enhancements to the credit lapsed at the end of 2021, the benefits families saw from the monthly checks were swiftly reversed.
Millions of children fell back into poverty, the Center on Budget and Policy Priorities found, and food insecurity and financial instability ticked back up.
Now, amid the highest inflation in about 40 years, roughly half of low-income families are struggling to buy enough food without the credit.
“While the poverty rate among white children will also increase, it will nevertheless remain nearly two-thirds lower than among Black and Latino children,” the racial justice organizations’ letter says. “This is simply unacceptable.”
What’s next for the child tax credit
To be sure, the regular child tax credit is still available for families with eligible children. Instead of getting advanced monthly payments and the larger amount from the enhanced benefit, families can claim the original credit, which is a maximum of $2,000, when they file their 2022 tax return next year.
The enhanced child tax credit was included in Democrats’ Build Back Better plan, a roughly $1.75 trillion economic bill that failed to pass the Senate. Now, as Democrats attempt to rework the proposal, the enhanced child tax credit hangs in the balance — it was one of the initiatives President Biden was ready to drop from the legislation in an attempt to pass it.
There are two pieces of the enhanced benefit that advocates would like to see continue. The first is the full refundability of the credit, which allowed it to reach more children than ever before.
“Those are the kids who were struggling the most before and for whom the CTC made the most difference, and who were really left in a lurch by the expiration,” said Adam Ruben, director of the Economic Security Project.
The second element advocates want to preserve isthe monthly payments, which helped families keep up with everyday expenses, he added.
Expanding the enhanced credit through 2025 would have significantly lowered child poverty and lifted more than 4 million children from living in poverty, according to the Urban Institute.
“Poverty is a policy choice,” the organizations wrote in the letter. “Allowing millions of children, including more than 2.5 million Black and Latino children, to fall back into poverty is also a political choice.”
> Millions of Americans live below the federal poverty level, with rates exacerbated by the COVID-19 pandemic.
> Poverty is associated with increased risk of chronic disease and all-cause mortality.
> Modeling four hypothetical policy interventions, researchers demonstrated how efforts to lift individuals out of poverty could result in thousands of lives saved.
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More than 37 million Americans currently live in poverty according to Census Bureau statistics, with increases among non-Hispanic white and Hispanic individuals seen between 2019 and 2020.
Income is also commonly cited as a social determinant of health as low-income individuals are more likely to suffer from chronic disease and die from any cause in the United States.
Several solutions have been proposed to address wealth inequality, which disproportionately affects people of color. These include implementing the Earned Income Tax Credit, increasing Social Security income and raising the minimum wage.
By modeling the potential health benefits of four hypothetical income support policies, researchers found each policy could prevent thousands of deaths among working age adults annually when compared with no intervention. Findings of the exploratory analysis were published in the Journal of the American Medical Association Health Forum.
The four policies modeled included a universal basic income intervention whereby each adult received $1000 per month and a smaller transfer of $500 per month was allocated for those with a household income of less than $100,000 per year — the latter intervention being a modified version of the LIFT act.
The third intervention provided an income guarantee of at least 100 percent of the federal poverty level (FPL) for 1 adult (measured at $12,760 in 2019) while the last policy was a negative income tax, which guaranteed an income equal to 133 percent of the FPL and rewarded earned income up to a threshold, researchers explained. Each policy was referred to as universal basic income, modified LIFT act, poverty alleviation, and negative income tax, respectively.
Incomes were defined based on the 2020 Annual Social and Economic Supplement and CDC data were used to estimate all-cause mortality rates.
Adults in the models were aged 18-64 and simulations estimated all-cause mortality over 5-40 years into the future.
Researchers found universal basic income averted between 42,000 and 104,000 deaths among adults each year, compared with 19,000 to 67,000 deaths averted each year from a negative income tax.
The modified LIFT act reduced deaths by 17,000 each year and poverty alleviation averted 12,000-32,000 deaths.
The models also showed moving individuals from low-income groups to higher-income groups yielded more pronounced benefits with regard to all-cause mortality.
Under the universal basic income scheme, researchers estimated each death averted costs between $16 to $43 million, while these numbers drop under the LIFT act model to $3.7 to $12 million.
Although the Environmental Protection Agency puts the value of a statistical life used at $7.4 million, these cost estimates “do not reflect any potential reductions in health care spending that are associated with improvements in population health like those modeled in this study, or potential productivity gains from longevity among working-age adults,” researchers said.
Additional factors that contribute to mortality, such as education, employment or wealth, were not taken into account in the study, and authors note future research should include information on race and ethnicity.
“Despite decades of research that has demonstrated that income is an important determinant of health, discourse around income support policies has disproportionately emphasized their economic benefits and costs, with little to no focus on the health benefits that these interventions might provide,” they wrote.
Cape Town – Amid increased calls for a Basic Income Grant (BIG), a new report by the Centre for Development and Enterprise (CDE) shows that a grant large enough to make a meaningful impact on poverty would actually slow economic growth and could lead to fiscal and financial crisis.
There has been much debate on the topic of implementing a BIG after government introduced the R350 Social Relief of Distress (SRD) grant.
Now the CDE’s report seeks to answer some of the burning questions that have arisen out of this debate through its new report, “Poverty and a Basic Income Grant: Six questions about a BIG”.
Some of the questions include why South Africa was thinking about a BIG now, what proponents of a BIG want, if South Africa’s current redistribution was enough, if it could afford a BIG, if a BIG would induce more rapid economic growth, and what alternatives exist for reducing poverty.
CDE executive director Ann Bernstein said the horrific levels of unemployment and poverty in South Africa, combined with slow economic and employment growth, explained the increased demands for a BIG, but the fact was, South Africa could not afford it.
“In this context, and with growing reports of child hunger, it’s not surprising that people want to see more spending on social grants. The reality, however, is that government’s finances are already unsustainable, and adding a large and permanent new spending programme will only make this worse,” Bernstein said.
The report argued that faster economic growth was essential to stabilise South Africa’s public finances, however spending money as if growth had already accelerated could tip the economy into financial crisis.
But Cosatu and human rights organisation Black Sash believe that notwithstanding the CDE report, the country desperately needs the BIG.
Cosatu parliamentary co-ordinator Matthew Parks said: “The question we must ask is if we can afford to leave 10 million unemployed persons with no source of income?
“The violence in KwaZulu-Natal and Gauteng last year showed the real dangers of leaving so many people without any source of income or sense of hope.”
Black Sash national advocacy manager Hoodah Abrahams-Fayker said: “International studies showed that BIG could reduce poverty and inequality more effectively than any other poverty-targeted government programme – it leads to better social cohesion, health, educational outcomes and even stimulates economic growth.”
Laura Elizabeth Woollett is a rising literary star, a much-praised author of a short-story collection and two novels. She is 29, with a creative-writing degree, and has never had a full-time job. She used to tell herself this was a lifestyle choice, so as not to kill her creativity. In reality, she’s never had an offer. Like many writers, she patches together a precarious income from casual work. Her best job was in a call centre.
Her novel Beautiful Revolutionary was shortlisted for the 2019 Prime Minister’s Literary Awards, which meant she could win a life-changing $80,000. She was terrified. She didn’t win. She registered the moment as back to normalcy.
There are prevailing myths about Australian writers such as Laura Elizabeth Wollett.
Her candid and wry account of this episode is one of 19 essays in Open Secrets, an anthology that grew out of a call in The Sydney Review of Books for writers to contribute stories of how they get the work done. It reveals a diverse range of fortunes, preoccupations, obsessions and neuroses, but the one thing that comes through clearly in every essay is how hard a job writing can be in a country and culture that by and large do not support it.
This is nothing like the picture of literary work that still has a surprisingly tenacious hold on the Australian imagination.
There are two prevailing myths. The first is that writers’ lifestyles are funded by taxpayers, and they don’t do much writing in return. The second is that writing is answering a divine call. You’re doing what you love, so you shouldn’t expect to get paid for it.
Sydney Review of Books editor Catriona Menzies-Pike debunks both these myths in her introduction to the book. As she points out, it’s getting worse. “The public funding available for Australian writers continues to contract, the prospect of healthy royalties from book publication are dim, and the gigs on which so many relied to pay bills, workshops, teaching, public events, have diminished in number.”
Some look beyond the relentless battle to scrape a living and to fit your writing around that essential work. They ask what that says about how our governments and institutions fail to value literature: James Ley laments the dwindling respect for the humanities in our university courses and teaching jobs.
Others delve into the inevitable psychological problems for anyone devoted to a task that doesn’t pay: how can you continue to respect yourself and what you are trying to do?
Lisa Fuller received an email from a creative-writing student saying their dream was pointless because their writing sucked. She replied that she was struggling with all those feelings herself.
Many of these accounts were written during the pandemic, which cut back on the availability of paid work and book promotion and magnified the writer’s isolation and negative thoughts. For some, however, lockdowns were a brief respite where for once everyone else had a taste of their daily lives. Fiona Wright had never felt so comfortable. Due to illness, she had always had to work from home, and had tried to make a virtue of it; now she saw others struggling to adjust to conditions she had accepted as natural for herself.
These are not poor-me stories of privileged people feeling sorry for themselves. They are frank explorations of ways of life that have come to seem natural, yet bizarre and oppressive at the same time. They beg the question: is it worth it? Menzies-Pike says the answer for writers is complex, yet their essays are “funny and intelligent” and “quiver with joy and determination”. For readers, the answer is clear: the work is the reward.
America stayed afloat during the pandemic thanks to a $5 trillion avalanche of money transferred from the government back to the people during 2020-21. The biggest share, according to The New York Times, was paid directly to households and businesses.
More than $1 trillion made its way into personal bank accounts through direct stimulus payments and advance Child Tax Credits alone. Trillions more reached them indirectly through enhancements to programs like SNAP.
Prices soon began increasing across the entire economy, and not long after, inflation was rising at its fastest rate in 40 years.
Inflation is a normal and natural side effect of economic expansion. As businesses grow, they hire more workers, unemployment falls and households have more money to spend, so demand for goods and services increases, which causes prices to rise.
The economic impact of the pandemic, however, was neither normal nor natural, and the same could be said for today’s 8.3% inflation rate, which is finally trending down a bit after resting for months at a 40-year high, according to the Wall Street Journal.
In times of normal economic expansion, prices rise slowly as money slowly enters the economy, so it stands to reason that a sudden influx of trillions of stimulus dollars would send prices up quickly.
So are the stimulus payments to blame for today’s high inflation, as some voices on the politically toxic subject would have you believe? There’s no question that the payments are responsible for at least some of it — but how much?
The most reliable approximation comes from the Federal Reserve Bank of San Francisco, which estimated at the end of March that government stimulus may have added three percentage points to the national inflation rate.
There Is No One Thing That Caused Prices To Rise
Despite all the controversy, according to Fortune, economists generally agree on some of the causes behind the high inflation that has defined the economy over the last several months:
The pandemic shifted consumer demand away from services toward goods, which left producers unable to keep up with demand.
Factory closures from early in the pandemic reduced supply just as demand was rising, which sent prices up even further.
Russia’s invasion of Ukraine caused a spike in oil prices, which increased the cost of both manufacturing and shipping, while also forcing up the price of wheat and other commodities.
On top of that, the U.S. was dealing with a labor shortage, leaving many businesses that had been shuttered for months unable to meet rising demand — much of which was due to stimulus payments — when they were finally able to open.
What About the Rest of the World?
Those who draw a straight line between stimulus payments and generationally high inflation have two indisputable facts on their side, according to ABC News:
No country distributed anywhere near as much stimulus money to its people as the United States
No country was hit as hard by rising inflation as the United States
That’s as close to a smoking gun as stimulus opponents could ever hope for, but it’s also a simplification. High inflation has been a worldwide phenomenon — but stimulus payments were not.
Other countries that reacted to the virus with comparatively passive monetary policies suffered from similarly high inflation. In the European Union, for example, inflation hit 7.5% — close to America’s rate — despite limited stimulus that never approached the scale of America’s payments.
In the End, It Was the Worst of Both Worlds at the Same Time
Can a huge injection of cash into the economy cause prices to rise? You bet.
According to the International Monetary Fund (IMF), “If the money supply grows too big relative to the size of an economy, the unit value of the currency diminishes; in other words, its purchasing power falls and prices rise.”
That describes the quantity theory of money, which is among the oldest and most primary economic concepts — but it’s not the only game in town.
The IMF elaborates with this: “Supply shocks that disrupt production, such as natural disasters, or raise production costs, such as high oil prices, can reduce overall supply and lead to ‘cost-push’ inflation, in which the impetus for price increases comes from a disruption to supply.”
Post-pandemic America experienced both at the same time — massive stimulus payments increased the quantity of money in the economy, which caused demand to soar just as supply shocks disrupted production and shipping.
Did stimulus checks cause inflation? Not exactly — but they certainly played a role.
A prescription for healthy food? Food rx program gives people access to fresh fruit and vegetables on doctor’s orders.
For years, Ted Blythe was told by his doctors he needed to eat healthier. Specifically, he needed to eat more fresh fruit and vegetables. He has a heart condition and neuropathy, and he has struggled at times with his mental health.
Blythe, 58, said he heard his doctors’ warnings, but given his limited income — $1,169 per month from the Ontario Disability Support Program — following their advice just wasn’t possible. “I couldn’t afford it.”
So when the pandemic hit and Blythe’s options narrowed even further; the food bank where he regularly picked up groceries had closed so he jumped at the opportunity to be part of a new program that gives people with low incomes and chronic health problems a “prescription” for healthy food.
Blythe is a participant in Food Rx, a pilot project launched by the University Health Network and non-profit FoodShare that provides more than 200 people a biweekly delivery of fresh fruit and vegetables.
“It’s awesome,” Blythe said. “I can actually make a healthy meal.”
The idea behind Food Rx is both novel and obvious: that giving people stable access to fresh and nutritious food will improve their physical and mental health. Similar programs have been run elsewhere, but the pilot is the first of its kind in Toronto.
“Prescribing food is not something I wanted to do as a health-care worker,” said Dr. Andrew Boozary, a physician and executive director of UHN’s Gattuso Centre for Social Medicine. “It’s a response to broken social systems.”
There were a record 1.45 million visits to food banks in Toronto last year, according to the latest Who’s Hungry report by the Daily Bread and North York Harvest food banks. (The total represents a 47-per-cent increase on the previous year; a typical year-over-year increase is between five and 10 per cent.) Last year was also the first-time new food bank users outnumbered those who had been before.
Food Rx was launched in the spring of 2020 as a direct response to increased food insecurity during the pandemic and concerns among community health workers that many vulnerable people were being disconnected from their usual social supports.
“We knew that the impact of COVID was not going to be an equalizer, but actually would disproportionately punish marginalized populations,” Boozary said.
Ample research shows that household food insecurity — that is, not having an adequate quality or quantity of food due to financial constraints — is associated with poor mental and physical health. Children who experience food insecurity are at a higher risk of hyperactivity and inattention, and increased risk of developing asthma, depression and suicidal ideation in adolescence, according to PROOF, a team of food insecurity researchers from multiple universities, including the University of Toronto.
PROOF’s research has also found that adults in food-insecure households are more vulnerable to diabetes, heart disease, hypertension, arthritis and back problems. As in children, the risk of depression, anxiety, mood disorders and suicidal thoughts increases with the severity of food insecurity.
One of the main goals of Food Rx, said Sané Dube, another member of UHN’s Social Medicine team, is to illustrate how health care should be about more than just what happens in a hospital or doctor’s office.
“What if we had a health-care system that met people where they were and responded to their needs?”
Preliminary data from the pilot suggests the biweekly deliveries are having their intended effect, with participants reporting significant improvements in their quality of life, overall happiness and sense of community connection.
Blythe, for one, says he has noticed he feels less stress since he started receiving his FoodShare boxes.
“Every month is still a struggle,” he said, “but when I go to sleep at night I know I’ve had a decent meal.”
The pilot was intended to run for two years, but with record inflation and skyrocketing food prices, organizers are hoping it can be extended. “We’re in a different place with the pandemic, but people haven’t stopped struggling,” Dube said.
Funding for the pilot has come primarily from the Arrell Family Foundation, but organizers are looking for additional funding to keep it running beyond the end of next month.
Critics of the program have pointed out that giving people a box of food every other week does nothing to address the root cause of their food insecurity.
“Why is this a box of food and not a bag of money,” said Valerie Tarasuk, PROOF’s leading researcher, in an article published in The Globe and Mail earlier this year.
Boozary and others agree.
“I’d prescribe a basic income today if I could,” he said, adding that he would never suggest giving people boxes of food could solve food insecurity or other problems linked to poverty.
“The same way that shelters are not the policy solution to homelessness … (But) what would you have us do as health workers in a situation when you know people cannot afford food, or they’re having to make choices between food and their prescriptions?”
Sheldomar Elliott, FoodShare’s Food Rx co-ordinator, said everyone involved with the program is well aware it’s a temporary solution.
“Food Rx is no doubt helping people get fresh food right now and reducing social isolation in the process, and that’s beautiful,” he said in an email. “But what FoodShare wants to see most is changes to policies around income so that people can afford the food they want and need for themselves.”
A Chicago alderwoman was floored to receive a letter informing her that she rose to the top of a waitlist for affordable housing last month—nearly three decades after she applied.
“I first applied for an affordable housing voucher in 1993,” Alderwoman Jeanette Taylor said on Twitter, showing a photo of the letter from the Chicago Housing Authority (CHA) dated May 20.
“I finally got a call back in 2004 to tell me my son who just graduated high school couldn’t be on my lease. Today in 2022 I finally got a letter telling me I made it to the top of the waiting list. I have no words.”
The letter said that Taylor had until June 6 to complete her Application for Eligibility after being selected from the waitlist.
A 2021 report from the Center on Budget and Policy Priorities (CBPP) found that most families wait years to get off waitlists for affordable housing vouchers. Only two of the 50 largest housing authorities in the United States have average wait times of under a year, while some have average wait times of up to eight years. Across the country, families who receive vouchers spend an average of nearly two and a half years waiting.
The average wait time for housing vouchers in Chicago was 19 months, CBPP reported. However, since millions of families never get to the top of a waiting list, the average wait time for people who end up receiving vouchers does not reflect the wait for anyone who puts their name on a list.
Taylor told WBBM Newsradio that when she applied for affordable housing in 1993, she was a 19-year-old mother of three. She had two more children while she continued to wait, raising all five in a one-bedroom apartment.
In a follow-up tweet, Taylor said her 29-year wait was symptomatic of a broken housing system.
“I have no words for how this system continues to fail our communities and those in need of stable, AFFORDABLE housing,” she wrote. “In those 29 years the housing crisis in Chicago has only gotten worse.”
A CHA spokesperson told Newsweek in a statement, “CHA cannot comment on any applicant’s status for privacy reasons, but we fully agree that more resources are needed from the federal government to address the need for affordable housing in Chicago, as there has not been a significant increase in the number of vouchers available in years.”
CHA added that the last time the Housing Choice Voucher waitlist opened was in 2014 when more than 75,000 names were put on the list. Approximately 32,000 names remain today.
Without the child tax credit, Stormy Johnson has been skipping her own meals so her kids can eat.
Johnson, 45, works as a student support specialist in Preston County Schools in Kingwood, West Virginia. Before the monthly enhanced child tax credit payments lapsed in December, she received an additional $500 each month for her two children, Violet, 15, and Tristan, 14, whom she parents alone.
Without the extra money, and with increased prices due to inflation, Johnson’s budget is stretched thin.
“It’s been a struggle for sure,” said Johnson. “I’m just making sure that my kids have what they need, and I honestly think it’s taken a toll on my health physically.”
Families struggling
The child tax credit was expanded in 2021 through President Joe Biden’s American Rescue Plan.
The legislation boosted the credit to $3,000 from $2,000, with a $600 bonus for kids under the age of 6 for the 2021 tax year. Half of the credit was delivered in monthly payments, which ran from July 2021 to December 2021, in deposits of $300 for children under the age of 6 and $250 for those aged 6 to 17. Families received the second half of the credit in a lump sum when they filed taxes this year.
Now, five months after payments stopped, many families are struggling to make ends meet.
Nearly half of parents who used to get the checks now say they can’t afford enough food to feed their families, according to a May survey of 500 parents from Parents Together Action, a nonprofit. In addition to the increased costs of food, families are noticing rising prices of gasoline, child care and rent due to inflation, the survey showed.
More than 90% said that they are finding it harder to make ends meet right now, and more than 60% are struggling to satisfy their families’ basic needs. Beyond cutting back on things, most families said they’ve stopped saving for the future and have tapped into their emergency savings to stay afloat.
Others, like Johnson, have skipped meals so their kids can eat. Her family has also had to cut back on foods like chicken and fresh vegetables because they are too expensive, she said.
“I know I need to take care of myself to be able to take care of my kids,” said Johnson. “But at any given time if you give me the option to do for my kids or do for myself, especially when it comes to something like food, I’m not going to let my kids go without.”
The future of the child tax credit
It’s unclear if the child tax credit will be enhanced again anytime soon.
The monthly payments ended in December when Democrats failed to pass Biden’s $1.75 trillion economic plan, Build Back Better. Since, there’s been little movement on reinstating the credit, even as families continue to grapple with the coronavirus pandemic, high inflation and increased economic uncertainty.
“It feels totally inexcusable that Congress isn’t acting to reinstate those CTC payments, especially right now as families are struggling so much,” said Allison Johnson, campaigns director at Parents Together Action.
It’s also likely that the benefits seen from the enhanced credit will continue to erode. The expanded benefit showed positive results in improving food security for families with children, lifting kids out of poverty and even helping parents work more.
The cold, wet weather of late winter and early spring was discouraging for everyone, combined with illness and restrictions brought on by COVID-19, and inflation rising to a 30-year high. But most of us have had a warm place to live and access to healthy food.
It has been much worse for our citizens who depend on social assistance, which the PC government has frozen at $733 per month since 2018, for single people considered to be employable. No indexing to inflation, despite Canada’s annual rate peaking to 6.7 per cent in March. And no mention of social assistance rates in the Ontario budget.
The Hamilton Social Work Action Committee and the Campaign for Adequate Welfare and Disability Benefits began a petition campaign asking the government to raise social assistance rates to match the federal CERB benefit: $2,000 per month for single people who lost their employment during the pandemic. To get “in-person” signatures, we reached out to people who lined up outdoors for donated food, often for over an hour in miserable weather.
One cold, rainy evening at the Ferguson Avenue station we approached a group of about 25 hungry people, many living on social assistance, some with no fixed address. They were there for food, shivering in the cold rain, when a truck came by with light snacks at 5:30 p.m. After a 90-minute gap, some church volunteers arrived to cook hot food for the small crowd. No one had given up and left. We met many of the same people on Saturday mornings at Gore Park, again waiting patiently in the cold for food.
Some of the food seekers refused to sign our petition, saying that the government will never increase social assistance. We are also hearing this now, as we knock on doors in government-subsidized apartment buildings, encouraging the residents to vote.
We can understand why social assistance recipients have given up on being treated fairly by our government.
Some of them were part of a basic income pilot, initiated by the previous Liberal government. Researchers from McMaster University found that many participants reported improvements in their physical and mental health, they had more hope for the future, and some had reached out for education and training that would help them to find employment.
During the 2018 election campaign, the PCs promised to continue the basic income pilot, but cancelled it after winning the election. The last time a PC government gave a raise to social assistance was six per cent in 1985. This was nullified 10 years later by a 21.6 per cent cut by the Mike Harris government.
Ironically, this government promised to make improvements to social assistance in their 2018 election platform. In Premier Ford’s words, “The best form of social assistance is a job.” He planned to find employment for recipients by subsidizing employers for the first few months. This approach has been used in other countries, but evaluations showed that the employees were dismissed when the subsidies ended. Although the government has promoted this plan over the past four years, there has never been a report on its progress.
It is understandable that the hungry people who wait for food in miserable weather have given up on the government.
Progressive Conservative candidates are seeking re-election at a time of extreme inflation, without even mentioning social assistance in their budget. This suggests that citizens who are hungry and homeless do not exist on their radar. We hope that public-spirited people will remember this when they vote June 2.
A campaign backed by a broad coalition of Christian leaders will urge Congress to extend the child tax credit to low-income families, hoping to broaden access to the popular financial assistance program after lawmakers allowed an expanded version to expire last year.
Beginning with an advertisement in Politico Magazine that was set to run Thursday and a letter sent to all 535 members of Congress and to the White House the same day, the campaign supports including a widely accessible version of the child tax credit in a bill working its way through the budget reconciliation process.
“As you work to craft an economic reconciliation bill, we would like to lift up one preeminent priority: making the Child Tax Credit fully refundable and available to low-income families on a permanent basis,” reads the letter, provided exclusively to Religion News Service.
The authors conclude: “To pass a reconciliation bill without including a permanent and fully refundable Child Tax Credit would be morally indefensible.”
The effort was organized by the Rev. Jim Wallis and Georgetown University’s Center on Faith and Justice. Among its signers are the Rev. Walter Kim, head of the National Association of Evangelicals; the Most Rev. Michael B. Curry, presiding bishop of the Episcopal Church; the Rev. Eugene Cho, president of Bread for the World; and the Rev. Amy Reumann, director of advocacy for the Evangelical Lutheran Church in America.
The Rev. Barbara Williams-Skinner, co-chair of the National African American Clergy Network, also signed the letter, as did Mary Novak, head of the Catholic social justice lobby Network, and John Carr, founder of Georgetown’s Initiative on Catholic Social Thought and Public Life.
The child tax credit, which offers financial assistance to parents, was expanded last year in the White House’s pandemic relief legislation, allowing most U.S. families monthly payments of up to $300 per child. The expanded credit, previous versions of which have long been supported by lawmakers of both parties, was regarded as a “remarkable success at reducing child poverty,” the Christian leaders’ letter said.
But lawmakers allowed the expansion to expire in December when efforts to pass the sweeping Build Back Better Act, President Biden’s broad-based environmental and social spending agenda, fell apart. Sen. Joe Manchin III (D-W.Va.) said he would join Republican senators in opposing the tax credit provision unless it included a work requirement for families whose income is below the minimum to incur federal income tax.
The work requirement drew widespread criticism from religious groups. “Work is critically important to human dignity but having a particular level of earned family income should not be a prerequisite to accessing support for their children,” Galen Carey, vice president of government relations for the National Association of Evangelicals, said at the time.
According to researchers at Columbia University, child poverty increased 41 percent a month after the credit expired. In their new letter, the Christian leaders advocate making the current $2,000 credit refundable, which would allow families to receive the payment without having to provide proof of income or owe federal income tax. Doing so, they argue, would reduce child poverty by 20 percent.
“Before the expanded credit roughly half of Black and Latino children, and half of children living in rural areas, got less than the full credit because their families’ incomes were too low,” reads the letter. “If the credit is made fully refundable, these children would receive the full credit amount.”
The letter’s authors invoke a passage from the Gospel of Matthew in which Jesus tells his followers to care for the “least of these.” The letter also chides lawmakers for considering tax cuts for corporations while demurring on efforts to combat child poverty.
“It is simply wrong to prioritize tax breaks to corporations over tax breaks for poor and middle class families,” they write.
Other faith groups have rallied behind the child tax credit, including the U.S. Conference of Catholic Bishops. The group recently sent a letter to Congress celebrating the expanded version of the credit and urging lawmakers to prioritize the poor.
“Especially in this moment of economic uncertainty, we urge you to take action to ensure the progress made in the fight against child poverty this past year is not lost and that we build on these gains,” the bishops’ letter reads.
Leaders of the Poor People’s Campaign, a faith-led activist group that often advocates for liberal-leaning legislation, have lauded the child tax credit and lambasted Manchin for proposing work requirements. In September of last year, campaign co-chair the Rev. Liz Theoharis condemned tying the credit to work requirements as a “regression back to the tired debate of deserving and undeserving poor.”
Already extremely hard-pressed South African consumers are bracing for another double-dose of pain, with increasing fuel and municipal electricity and water tariffs coming into effect.
A triple-dose, in fact, if you add the seasonal costs of keeping warm in the dead of winter.
The State will argue that there is little it can do to intervene.
It will point out that South Africa does not pump its own oil – or refine oil, any longer – so the base prices of petrol, diesel and paraffin are beyond our control. And it will say that the country can’t afford to forego the R1.50 general fuel levy (suspended for a few months) forever.
With respect to electricity prices, it’s common cause that we are presently held hostage by Eskom’s monopoly and gross inefficiency, and most South Africans have little option but to cough up for the insult. Water, too. It’s a basic necessity and few urban residents have alternative sources to that supplied by their municipalities.
The truth, however, is that the State does have the power to cushion citizens pain. To exercise the power, and prioritise that which should be prioritised, requires a mind-set shift in the State’s approach to the way it spends its money.
Instead of dividing the revenue according to historic formulas and spending patterns, we should be cutting the cloth to fit the suit we actually need, informed by our most pressing priorities. This approach is known as zero-based budgeting.
It’s not that the State can’t afford to forego R1.50 of the fuel levy, or that our towns and cities can’t afford not to add punitive tariffs to our electricity and water bills – or that we can’t afford a Basic Income Grant, for that matter. The reason we can’t afford these things is because we prioritise other things.
Things including exorbitant cars, security details for government big-shots, R22m flags, new carbon-spewing power stations, a host of failed land reform initiatives… it’s a long list.
South Africa’s economy, stumbling before Covid, is battling to resurrect itself. Many people are suffering. When you already can’t afford to live, how can you possibly afford more increases to the cost of living?
Fuel and electricity price hikes don’t just effect owners of private vehicles or domestic users; they have a knock-on impact on the prices of just about everything else. Right down to the price of staple foods, school stationary, and medicines.
Through actions such as temporarily reducing the fuel levy, and introducing the R350 Covid special grant, the State has clearly indicated good intentions.
Now it must take the next step: Getting struggling South Africans through the economic quicksand we’re in, and reducing the hardship and indignity of profound poverty, is the priority.
We must fund our national priorities and defund wasteful and unnecessary expenditure.
When the police department in Sacramento, Calif., held a gun buyback event on Saturday, they didn’t just give residents a no-questions-asked chance to turn in their unwanted firearms: They also gave out gift cards for gas.
The Sacramento Police Department said on Facebook that 134 people had dropped off firearms in exchange for $50 gas gift cards. The day’s collections included at least one assault weapon, components of privately manufactured “ghost guns” and “multiple other illegally configured firearms,” they said.
While the gift cards appear to have been an incentive – especially with gas prices climbing across the country – officials said they weren’t the only motivating factor.
“Among other reasons, community members most commonly cited a lack of experience or knowledge with firearms, lack of knowledge of the legality of the firearms, or an inability to safely store the firearms as the main reasons for participating in the exchange,” they wrote.
Whatever the reason, Saturday’s event – which was supposed to last for five hours – got more takers than expected. The department announced just 45 minutes into the event that it had exhausted its supply of gift cards “due to overwhelming response” and would be stopping an hour early.
It continued to accept firearms even after running out of gift cards, with officials praising the event as a success.
“I truly believe violent crime prevention is a shared responsibility and today’s overwhelming community participation is evidence of the success we can achieve together,” said Sacramento Police Chief Kathy Lester.
Cities across the U.S. hold gun buybacks (typically offering some sort of incentive) with the overall goal of reducing gun violence in their communities – though research suggests these programs don’t quite accomplish that.
Sacramento wasn’t the only city to host a fruitful buyback over the weekend. New York City officials said that people turned a total of 69 weapons in to a Brooklyn church on Saturday, at an event co-sponsored by cheesecake chain Junior’s Restaurant.
People turning in rifles, shotguns and air guns got $25 bank cards, according to Forbes, while those turning in assault rifles or handguns got a $200 bank card and an iPad.
Chancellor Rishi Sunak has announced a series of payments to UK households struggling with the deepening cost-of-living crisis as he confirmed a temporary windfall tax on oil and gas giants.
Here is what the package means for you.
– Households will receive a non-repayable £400 energy grant
– Households in England, Scotland and Wales will receive a £400 payment to help offset the soaring increase in energy bills from October.
– All households with a domestic electricity connection will be automatically eligible for the grant.
Bill payers will not need to contact their energy company as the grant will be automatically applied to every household bill in October.
Direct debit and credit users will have the money credited to their account, while those with pre-payment meters will have the money applied to their meter or paid via a voucher.
It replaces the £200 loan announced by the Chancellor earlier this year and will not need to be repaid.
Around eight million of the lowest income households will receive £650
Mr Sunak said the one-off cost-of-living payment for around eight million households on means-tested benefits will be sent direct to their bank accounts.
The Department for Work and Pensions (DWP) will make the payment in two lump sums, the first from July, the second in autumn, with payments from HMRC for those on tax credits following shortly after.
The payments will be sent straight to people’s bank accounts.
Across all the support, almost all of the eight million most vulnerable households will in total receive at least £1,200, Mr Sunak said.
What about pensioners?
More than eight million pensioner households in receipt of winter fuel payments will be given an extra “pensioner cost-of-living payment” of £300.
Combined with an additional discount on energy bills, pensioners are at least £500 better off following Thursday’s announcement. They could receive a total of £850 in support this year, assuming they qualified for the council tax rebate announced earlier in 2022.
Mr Sunak stressed that pensioners were “disproportionately impacted” by higher energy costs due to being less likely to be able to top up their income through work, and faced higher energy costs from spending more time at home.
Those on disability benefits will receive an extra £150 payment
The six million people who receive non-means-tested disability benefits will be sent an extra one-off disability cost-of-living payment worth £150 from September.
Mr Sunak said many within this group will also receive the £650 payment, taking their total cost of living help to £800.
What do I need to do to make sure I get my payment?
Mr Sunak said the payments will not require any additional form-filling and will be paid via existing account set-ups.
OPINION: In Budget 2022, the Government announced it would deliver a one-off cash grant of $350 to 2.1 million New Zealanders, as part of its response to the cost of living crisis.
For some reason, this direct cash grant unfairly excludes those receiving the Winter Energy Payment, who are already in the most need of financial support.
Whilst the amount is small, it demonstrates the Government can provide direct cash support when required.
It allows people to make their own decisions about where best to deploy that extra income, rather than ad hoc tax shifts on individual goods, such as fuel or public transport.
The Government is certainly trying a number of approaches and this one-off cash grant may finally shift the conversation on a UBI.
Although there are conditions attached to this one-off cash grant there is a universal aspect to it and, hopefully that means a minimal application process.
The universal aspect of any cash grant is critical. It addresses basic human needs without enquiring about a person’s relationship status or work situation, and most importantly removes all barriers.
It restores dignity to people who are struggling to meet their basic living costs and removes ongoing financial insecurity which impacts our mental health and wellbeing.
It also enables financial support for unpaid, primary caregivers who fall outside the welfare system and whose work is not recognised, despite its high community value.
For some, a key objection to a UBI is that it gives money to the undeserving, lazy and feckless.
This negative and disparaging view has stigmatised those struggling to get by and led to policies which have actively discriminated against them.
It has embedded a generation of poverty, dysfunction and poor community outcomes. And when the research shows the complete opposite, it’s disappointing that we continue to see some political parties continue to push these pessimistic stereotypes.
Whether it’s towards food, health outcomes, education or enterprise, the benefits are clear.
When you give people money, they use it to better their lives. A UBI gives people dignity with a stable foundation to create their own future.
Another common objection is the cost and the coverage.
Why should everyone, particularly the well-off, deserve a UBI? The answer to that is simple – we would tax it back through a land tax and simplify the income tax system with a single tax rate to deliver benefits to the majority of Kiwis.
Like National’s GST/income tax switch, this package is designed to be tax neutral. Unlike National’s switch, this one is progressive.
This package will rebalance our economy away from land speculation, provide higher incomes for all and make our tax system fairer and easier to understand.
Whilst the Government is still searching for its own tax principles, we have ours, and they’re easy to get behind – fairness, equity, and simplicity.
A new universal basic income model could cut poverty by more than half at no net cost, reducing it to its lowest level for 60 years, according to a report co-authored by a University of York academic.
On the 80th anniversary of the historic Beveridge Report, the new research by the Basic Income Conversation and Compass represents the most substantive attempt yet to assess the impact of a basic income (UBI) scheme and the greater income security it provides.
The fiscally neutral scheme involves no additional calls on the public finances and no net increase in taxation: the cost of the extra payments would be exactly offset by the extra revenue from internal changes in tax rates and National Insurance Contributions, the report’s authors say.
Changes
Under the model, compared to the current system:
Child poverty falls by more than a half to 12.5%, taking it to below the level of 14.0% in 1977.
Working-age poverty falls by just over a quarter, from 19.4% to 14.9%.
Pensioner poverty falls by 54%, from 16.7% to 7.7%. This takes the level of pensioner poverty to well below the lowest post-1961 rate of 14% in the early 1980s.
The Gini coefficient – a summary measure of inequality – falls by 12.5%, taking it back towards the peak equality achieved in the 1970s.
The gains are concentrated among the poorest and the losses among higher-income groups.
The model involves two broad sets of changes to the existing tax and benefit system:
A guaranteed set of weekly payments which provide an income floor. These are £41 per child and £63 per adult of working age, making a guaranteed payment of nearly £11,000 a year for a family of four.
A series of tax adjustments pay for the weekly basic income: the changes involve lowering the personal allowance to £750, a rise in existing tax rates of 3p in the pound and a change in the current system of National Insurance Contributions.
As well as ensuring fiscal neutrality, these changes ensure that the gains are concentrated among the poorest, the report concludes.
Evidence
Professor Kate Pickett, from the University of York’s Department of Health Sciences and one of the author’s of the report, said: “Here is the evidence that a Universal Basic Income is affordable and beneficial – imagine how good it would feel to be tackling child poverty while enhancing everybody’s financial security. This could be a giant step forward to a better post-Covid world.”
Neal Lawson, Director of Compass, added: “At a time of skyrocketing poverty, this report shows universal basic income can take us back to the lowest level of child poverty in over 50 years at no net cost to the Treasury.
“In showing universal basic income can deliver record low levels of poverty with no extra burden on the nation’s finances, this report makes transformative change a political decision not an economic one.”
About this research
The report ‘Tackling Poverty: the power of universal basic income’ is published on the Compass website. Its research models a basic income that could reverse the poverty and inequality rises of the last 45 years.
An act to develop a national framework for a guaranteed livable basic income has been introduced to the House of Commons (C-223) by MP Leah Gazan and in the Senate (S-233) by Senator Kim Pate.
The bill is a response to the years of neglect that have undermined our social safety net to the point where medically assisted death seems preferable to legislated poverty among people with disabilities, where people are without housing shelter in city parks or bus shacks and food banks are over-run.
Despite years of evidence demonstrating the health and social benefits of basic income, there are critics.
Some claim basic income is a plot by a shadowy global elite intent on transhumanism. Others trot out the more usual criticisms based on deeply held suspicions rather than evidence.
Some, such as Senator Diane Bellemare, have argued basic income would only be feasible at an astronomic cost. They also imagine the same amount would be paid to all Canadians, rich or poor, when the entire conversation around basic income in Canada has focused on a modest basic income targeted to those with low incomes.
Some claim a basic income would require a complete transformation of our income tax system at the federal and provincial levels. Hardly.
A basic income would require negotiated contributions from the federal government and each province, all of which could reconsider the dozens of inconsistent ways they now attempt to address poverty by delivering cash to individuals.
Replacing the GST credit, reimagining the Canada Workers Benefit and harmonizing benefits is challenging, but not inconceivable and long overdue. Some provinces have already begun that work.
Would a basic income mean paying everyone the same amount making it impossible to respond to differential needs? The bill explicitly says otherwise.
People with disabilities are hard at work designing a basic income that meets their needs.
Many critics forget current programs (such as provincial social assistance) also have a hefty price-tag attached to them. Some claim massive labour market disincentives, even though the Parliamentary Budget Office estimated a basic income might lead to a reduction in hours worked of 1.3 per cent — hardly an immense effect.
Would a basic income impose intractable constitutional difficulties?
Provinces in this country have authority to deliver social assistance. Yet, they also have the authority to deliver childcare. We just saw provinces and territories sign on to a federal childcare initiative that respected the different goals and capacities of each province.
Healthcare is a provincial responsibility delivered in the context of national standards and shared funding. Why would basic income be less feasible?
Canadians need to have a real conversation about poverty – without fearmongering or invented data. We need to know how different levels of government can cooperate to best respond to real social needs. The bill is an invitation to that conversation.
If I had drafted the bill, I might have made some changes.
I personally would not extend a basic income to Temporary Foreign Workers (TFW) — not because I don’t recognize the deplorable conditions in which many live and work, but because I think the TFW program needs to be completely rethought so it doesn’t keep Canadian wages artificially low.
Nor would I extend a basic income to everyone over 17 on the same terms.
I recognize the toll poverty takes among young people; young parents are almost uniformly living on less than the poverty line. Meanwhile, the struggle of young people forced to live without parental support has encouraged many provinces to extend support to youth aging out of foster care.
However, others under 25 earn little on their own account, yet live comfortably with their parents’ help.
These are surmountable challenges policymakers should turn to rather than debating the already established merits of a basic income.
It makes little sense to report strong public belief all working-age adults in Canada should work to earn a living when 70 per cent of social assistance rolls are comprised of people with disabilities — some of whom can’t work at all and others who need supports to make work possible.
Let’s get past the ideology and think about how we can make life better for all Canadians.
_____________________________________
Evelyn L. Forget is an Officer of the Order of Canada, an economist and professor at the University of Manitoba. She is author of Basic Income for Canadians: From the Covid-19 emergency to financial security for all.
Citing the “skewed nature” of income distribution in the country, the report also recommended steps to raise minimum income and more government spending on the social sector to make vulnerable sections immune to sudden shocks” and “stop their descent into poverty”.
The report, titled “The State of Inequality in India” and prepared by the Gurgaon-based Institute for Competitiveness, was released on Wednesday by EAC chairman Bibek Debroy.
“Looking at the difference between the labour force participation rate in rural and urban areas, it is our understanding that the urban equivalent of schemes like MGNREGS that are demand-based and offer guaranteed employment should be introduced so that the surplus-labour is rehabilitated,” it said.
According to the report, raising minimum income and introducing universal basic income are some of the recommendations that can reduce income gap and ensure equal distribution of earnings in the labour market.
“Most importantly, the Government must allocate more percentage of the expenditure towards social services and the social sector to make the most vulnerable population resilient to sudden shocks and stop their descent into poverty,” it said.
The EAC-PM noted that the most important aspect of measuring poverty in a multi-dimensional context requires mapping the mobility in and out of poverty.
Citing the results of the three rounds of the Periodic Labour Force Survey (PLFS), the Council noted that in the three years to 2019-20, “excepting for very marginal changes”, the top 1 per cent of population held 6-7 per cent of the total income earned, while the top 10 per cent held a third.
Over the three years to 2019-20, the share of the top 1 per cent of the population in the country’s total income increased from 6.14 per cent to 6.82 per cent.
It said that though there was marginal decline in the income share of the top 10 per cent from 35.18 per cent in 2017-18 to 32.52 per cent in 2019-20, this hasn’t resulted in increased salaries of the bottom-most population. “…The top 1 per cent grew by almost 15 per cent between 2017-18 to 2019-20, whereas the bottom 10 per cent registered a close to 1 per cent fall (in their income share),” it said.
Speaking at the release of the report, Debroy said that “in India, we have never had comprehensive data and we will never have data measuring income inequality”.
“The closest was NCAER data many years ago but one was very sceptical of that despite it being NCAER. What we do have and what we should have is data on distribution of consumption expenditure. Unfortunately, it’s the case that the last comprehensive NSS data on consumption and expenditure is for 2011-12. And we have had nothing after that. In all probability another consumption expenditure round will start this year. But we will not have processed data till the end of the year,” Debroy said.
“In the absence of data on consumption expenditure, a clear articulation of the poverty line, obviously we do not know what poverty numbers are, everyone jumps into the bandwagon. All kinds of people do some kind of extrapolation on the basis of 2011-12 data, on the basis of some assumed Tendulkar poverty line and come up with all kinds of estimates… The only data which can be used now is PLFS which is what this report mostly uses,” he said.
The call for a UBI scheme could revive the debate on ways to address growing income inequality. The idea was endorsed by former chief economic advisor Arvind Subramanian in the Economic Survey for FY17 in place of subsidy transfer. The survey had assumed a quasi-universality rate of 75 per cent (of all beneficiaries). Subramanian had calculated the economic cost of the UBI at 4.9 per cent of GDP.
However, later that year, then Union finance minister, the late Arun Jaitley, said that while he was supportive of the idea, it might not be politically feasible in India.
“We will be landing in a situation where people will stand up in Parliament and demand continuation of the present subsidies and over and above that (UBI)…,” Jaitley had said.
Subsequently, the International Monetary Fund in October 2017 endorsed the idea of India launching a fiscally-neutral UBI scheme by eliminating food and fuel subsidies. In January 2019, then Congress president Rahul Gandhi had pledged to roll out UBI if his party was voted to power.
The latest report called for hiking minimum income and ensuring better distribution of earnings in the labour market.
“Looking at the difference between the labour force participation rate in rural and urban areas, it is our understanding that the urban equivalent of schemes like MGNREGS that are demand-based and offer guaranteed employment should be introduced so that the surplus-labour is rehabilitated,” it said.
Andy Burnham has said that Universal Basic Income is an idea ‘whose time has come’ as he discussed the cost of living crisis during a visit to a school in Wigan.
The Mayor of Greater Manchester told pupils and parents: “Universal Basic Income, UBI, I think this is an idea whose time has come. Why, you all know and I know living here, over the years people living in this area, the Wigan borough, have had to take on more and more insecurity when it comes to their work.
“A culture of zero hours, casual hours, people doing three jobs and then they’re spending every hour worrying because they can’t pay their rent, so they’re living on the edge and that damages people’s health.
“A universal basic income will put a solid foundation beneath everybody so that they can have a life with security and stop worrying about everything.
“We’ve come out of a Covid pandemic, but we’ve got a mental health pandemic now, because so many people are living so close to the edge all of the time and we’ve got to take that away and give them much more security in their everyday lives.”
Burnham’s comments came as families up and down the country struggle with the cost of living crisis and face the biggest fall in living standards since records began.
A universal basic income would give people real freedom, dignity and choice. One of the main arguments against the idea of a universal basic income is that it will lead to people dropping out of work. This study however found the exact opposite.
I strongly agree with your editorial “Abolish MPF raids by bosses immediately” (May 7), but I would go further and totally abolish the Mandatory Provident Fund. It is not fit for purpose as a retirement fund, and it has failed on multiple levels from the perspective of ordinary citizens.
The MPF’s problems are symptomatic of what is wrong with the government’s mentality. It is a self-contributory retirement fund for Hong Kong’s working population, but when the administration planned and implemented this scheme, the individual workers and future retirees seemed to be their last consideration.
“Common prosperity”, which is now a key policy for President Xi Jinping, was obviously far from our officials’ minds.
The priority seemed to be that government officials should have no responsibility, so a statutory authority was set up to work independently with the private sector to establish a “privately managed” retirement scheme; that private financial service providers should boost Hong Kong’s financial services industry; and that employers should be compensated for the perceived inconvenience.
Splitting the contribution into two – 5 per cent from the employer and 5 per cent from the employee – was a large red herring. The employer’s contribution was never an additional payment borne by the employer, but rather an extraction that was built into the compensation package. It is a fallacy that the MPF had a financial impact on employers apart from minor administrative costs.
Pre-existing long service and severance payments were separate, legally binding agreements with the employee. It is bizarre and unconscionable that the government allowed these to be deducted from the worker’s MPF, and it is now completely astonishing they are planning to use billions in taxpayer dollars to subsidise the phasing out of this inappropriate offsetting mechanism. This illustrates how deeply vested interests have been rooted in our government’s decisions.
It must be hoped that our next chief executive, John Lee Ka-chiu, as a former police officer, will be able to see through all the smoke and mirrors. May I suggest that he replace the MPF with universal basic income (UBI), a periodic cash payment unconditionally delivered without means testing or work requirements. This proposal will doubtless be anathema to the vested interests who have benefited from Hong Kong’s laissez-faire policies, but these policies have perpetuated an unfair use of resources that has led to general poverty.
The government’s recent cash payout schemes illustrate the positive effect that such UBI payments have on the local economy, especially small businesses. Contrary to the stance of previous administrations, Lee’s “new chapter” should recognize that welfare is for people, not businesses.
One recent poll suggests nearly 60 per cent of Canadians support a basic income of $30,000. In another poll, 57 per cent of Canadians agree that Canada should create a basic universal income for all Canadians, regardless of employment.
Despite the strong public support, Bellemare argued that, “A basic income would be an unfair, complicated, and costly way to eliminate poverty.” As a social scientist who has researched cash transfers, and an entrepreneur and organizational leader, we challenge the view that basic income is “unfair”, “complicated” and “costly.” Instead, we argue that it can be fair, simple and affordable.
Basic income can be fair
Basic income can be fair to all Canadians, accommodating people with different needs. A system that includes basic income does not necessarily entail clawing back existing benefits and services.
Importantly, a gradually phased-in, carefully designed basic income program can be monitored and adjusted over time, to ensure that diverse individual needs are always addressed.
Research from Stanford University suggests that a basic income program can inspire meaningful social integration — greater participation in social and civic activities in the community — while also providing individuals with stability, safety and security.
An analysis of Ontario’s basic income trial illustrated that people with diverse needs reported better personal relationships with friends and family with basic income. In turn, their sense of social inclusion and citizenship improved.
The Ontario Conservative government cancelled the Ontario Basic Income Pilot that was initiated by former Ontario Premier Kathleen Wynne’s government. THE CANADIAN PRESS/Nathan Denette
Basic income can be simple
With careful planning, a basic income system could be designed to be simple, adaptable, reliable and fair. In other words, it could be a type of synergistic solution that involves an optimal mix of different policy programs that yield greater efficacy. For example, a basic income program could be combined with a wage subsidy program.
Contrary to Senator Bellemare’s assertion that “basic income would likely hamper participation in the labour market,” research has found that basic income has no negative impacts on the labour market. That is, basic income has no negative impact on employment rates or wages.
With a basic income program, recipients would be motivated to participate in the labour market and feel empowered to discover the most fulfilling way to work without fearing for their financial security.
Basic income can be affordable
Recent cost-benefit analyses have demonstrated that carefully designed cash-based interventions can be cost effective and generate net savings for society. Recipients rely less on social services over time, meaning governments pay less to fund these programs.
While Bellemare’s analysis suggests there could be a cost problem, other, more thorough analyses have taken into account the true costs and benefits of basic income programs and rebuked that claim.
We caution against overly simplistic cost estimates and call for a more careful, thorough calculation of the true costs and benefits associated with of basic income programs. In fact, Canada can adopt a basic income program without increasing its fiscal debt.
Last year, the Parliamentary Budget Office of Canada estimated that a guaranteed basic income of $17,000 per individual would cost the government $88 billion.
This amount could be offset by scaling back tax credits that disproportionately benefit Canadians who earn higher incomes. In addition, a well-designed basic income program can provide non-monetary benefits that are typically not captured in cost-benefit analyses, such as improvements in health, education, social cohesion and productivity.
Research supports basic income
There is a considerable amount of research that supports basic income around the world. It is prudent to carry out significantly enhanced research to reduce hesitations on basic income on social and economic grounds. Basic income can be a reliable, powerful component of a nationwide program to reduce poverty and enable all citizens to thrive.
Basic income should form part of a practical comprehensive plan for eliminating poverty in Canada. Indeed, there is emerging political will to push for a national strategy for a guaranteed basic income.
This is essential, because poverty is an unnecessary, cruel abomination. Think of it this way: most Canadians probably have a close friend or family member who is impacted by poverty, since one in 15 Canadians still live in poverty.
Poverty touches us all — it is everyone’s tragedy, which is absurd because poverty can be affordably reduced as we have argued above. Hopefully, one day future Canadians will look back to 2022 and ask how a just society could ever have tolerated such needless suffering.
Alaska’s Senate has approved a budget that would provide $5,500 in payments to residents and draw on savings amid a surge in the price of oil.
The Senate Finance Committee originally proposed Permanent Fund dividends of roughly $2,600 — that’s half of the total draw from the state’s sovereign wealth fund. The total proposed payout to residents rose to nearly $4,000 after the Senate approved an additional payment aimed at offsetting high energy costs.
Sen. Mike Shower proposed hiking payouts further to a total of roughly $5,500. The Wasilla Republican said the proposal would give the Senate room to negotiate the final figure with the House.
“The history has been (that) it gets negotiated down every single time, so that’s the reason I’m saying that I want to see something higher,” Shower said.
Another big-ticket addition to the budget came on Tuesday when a coalition of senators proposed a $280 million package for improvements to the Port of Nome and Port of Alaska in Anchorage, along with road projects in the Mat-Su Borough.
Sen. Donny Olson, D-Golovin, said the state’s share of matching funds for an Army Corps of Engineers’ plan to upgrade the Port of Nome was a critical investment.
“The Corps found that this regional hub port at Nome has the unique opportunity in remote Alaska to improve the viability of numerous Alaska Native communities, strengthen the resiliency of the region, as well as serve as a critical outpost for national security
The original budget proposed by the Finance Committee would have put away $1.2 billion in state savings accounts. But the plan that ultimately emerged from the Senate would take almost as much from savings, according to estimates from committee co-chair Sen. Bert Stedman, a Sitka Republican.
Sen. Jesse Kiehl, D-Juneau, said he couldn’t support the budget.
“I can’t call myself a good steward of Alaskans’ money if we’re drawing on savings at 100 bucks a barrel,” Kiehl said.
The budget passed by a 15-5 vote. It now heads to the House. Representatives could concur with the budget or appoint a conference committee to work out the differences between the two bodies’ plans before sending the budget to the governor.
When people living in poverty in countries like Malawi, Indonesia, and Ecuador receive cash payments without having to do anything in return, they have better health, according to a scientific review of a large body of research.
To reach that finding, our interdisciplinary team of public healthexperts, economists,andepidemiologists from Canada, Germany, New Zealand, and the United States pooled data from 34 studies that involved 1,140,385 participants in 50,095 households across Africa, the Americas, and Southeast Asia.
Our systematic review and meta-analysis also determined that unconditional cash payments in low- and middle-income countries not only reduce poverty, but they also lead to greater food security, improved nutrition, and more consistent school attendance.
Follow-up surveys with individuals who received this money earlier found that they were less likely to have been sick in the previous two weeks to three months compared with individuals who had not received this money. In addition, there is some evidence that people who got cash payments spent more money on health care.
The studies we examined involved 24 cash-payment programs in 13 countries that were run either by governments, nonprofits, or researchers. The value of the money given to people in need varied widely, anywhere from 1.3 percent to 81.9 percent of gross domestic product per capita.
Why It Matters
Governments, nonprofits, and researchers around the world are increasingly experimenting with a simple approach to reduce poverty: giving people money to spend on whatever they need.
Many of these cash-transfer pilots and experiments — often called basic-income programs — have required people to do something to receive the money, such as making sure their children regularly attend school. Sometimes the condition involves completing a specific health-related task, such as attending a health education workshop or going to a preventive care medical appointment.
Other programs, like those we studied, have no such requirements.
One advantage of the no-strings-attached approach, argue the GiveDirectly nonprofit and other supporters, is that it eliminates the need to monitor compliance and slashes administrative costs. Unconditional cash payments may empower recipients more since they can decide how to use the money to meet some of their immediate needs.
Making payments contingent on people meeting requirements may also unintentionally harm people in need who can’t comply with conditions due to physical, social, or economic barriers. For example, requiring a clinic visit to “earn” a cash payment does not help anyone unable to make the trip.
What Still Isn’t Known
We still don’t have enough information to determine if this pattern holds true in the United States and other wealthier nations.
The long-term health benefits of unconditional cash payments is also not clear.
Finally, more research is needed to understand whether the impetus for these programs, such as when they follow a hurricane or other major disaster, makes any difference.
What’s Next
Our team plans to study whether cash-payment programs that require compliance with conditions lead to better health, too. We also want to update a previous review we conducted of payments given to people who had experienced humanitarian disasters to include evaluations of similar efforts carried out during the Covid-19 pandemic.
Editor’s note: This article is part of a partnership the Chronicle has forged with the Conversation to expand coverage of philanthropy and nonprofits. The three organizations receive support for this work from the Lilly Endowment. This article is republished from the Conversation under a Creative Commons license.
Alaska’s Senate has approved a budget that would provide $5,500 in payments to residents and draw on savings amid a surge in the price of oil.
The Senate Finance Committee originally proposed Permanent Fund dividends of roughly $2,600 — that’s half of the total draw from the state’s sovereign wealth fund. The total proposed payout to residents rose to nearly $4,000 after the Senate approved an additional payment aimed at offsetting high energy costs.
Sen. Mike Shower proposed hiking payouts further to a total of roughly $5,500. The Wasilla Republican said the proposal would give the Senate room to negotiate the final figure with the House.
“The history has been (that) it gets negotiated down every single time, so that’s the reason I’m saying that I want to see something higher,” Shower said.
Another big-ticket addition to the budget came on Tuesday when a coalition of senators proposed a $280 million package for improvements to the Port of Nome and Port of Alaska in Anchorage, along with road projects in the Mat-Su Borough.
Sen. Donny Olson, D-Golovin, said the state’s share of matching funds for an Army Corps of Engineers’ plan to upgrade the Port of Nome was a critical investment.
“The Corps found that this regional hub port at Nome has the unique opportunity in remote Alaska to improve the viability of numerous Alaska Native communities, strengthen the resiliency of the region, as well as serve as a critical outpost for national security
The original budget proposed by the Finance Committee would have put away $1.2 billion in state savings accounts. But the plan that ultimately emerged from the Senate would take almost as much from savings, according to estimates from committee co-chair Sen. Bert Stedman, a Sitka Republican.
Sen. Jesse Kiehl, D-Juneau, said he couldn’t support the budget.
“I can’t call myself a good steward of Alaskans’ money if we’re drawing on savings at 100 bucks a barrel,” Kiehl said.
The budget passed by a 15-5 vote. It now heads to the House. Representatives could concur with the budget or appoint a conference committee to work out the differences between the two bodies’ plans before sending the budget to the governor.
During the height of the COVID-19 pandemic, the federal government released trillions of dollars into the economy in the form of stimulus payments to individuals and businesses. Those payments were lifesavers for many families, allowing for the purchase of necessities during uncertain economic times. The federal stimulus has since dried up — especially with budget-saving line items like the Child Tax Credit long gone (at least for now). However, families are still struggling under the weight of record-high inflation and stagnant low wages.
In response to the need many Americans are still facing, several state governments have stepped up to the plate and are pledging stimulus funds to residents. Though not all the proposals are official yet, here are the 11 states who have stimulus checks or tax relief on the docket for 2022.
California
Thanks to two years of budget surplus, California residents might have some relief from skyrocketing gas prices over the summer. Governor Gavin Newsom proposed sending debit cards to car owners, one debit card per car with a limit of two per household, for $400 to be used for fuel. Cards could be released as early as July.
Georgia
According to the Georgia Department of Revenue, Peach State residents who filed their 2020 and 2021 taxes are eligible for a rebate from the state’s tax surplus. Governor Brian Kemp recently approved payments based on tax filing status: single filers or filers who are married filing separately will receive $250, heads of household should expect $375, and married couples who filed jointly will receive $500. If money is owed to the state in the form of taxes or delinquent child support payments, for example, the amounts received could be lower. Residents would expect the amount added onto their tax refund or in a separate payment if they filed before Gov. Kemp signed the bill into law.
Hawaii
Hawaii residents who earn less than $100,000 should expect a payment of $300. Those who make more than $100,000 will receive $100. In January, Governor David Ige proposed $100 for all state residents, but in the spring, state legislators increased the amount. The payments are intended for earners and their dependents, meaning a family of four earning less than $100,00 could receive up to $1,200.
Idaho
In January, Governor Brad Little approved a bill that would provide Idahoans with a rebate of 12% of their 2020 state tax or $75, whichever is greater. The rebates are intended for earners and their dependents. Payments began in March, and those who receive their tax refunds via direct deposit will be the first to see their rebates.
Illinois
Governor J.B. Pritzker recently approved a groundbreaking state budget that will provide rebates of $100 per adult and $50 per dependent to be received this fall. They are also pushing for a moratorium on grocery taxes, $300 in property tax relief, and a 10-day freeze on school supply sales taxes.
Indiana
Thanks to a budget surplus, Indian residents who filed their 2020 taxes before January 2022 should expect a one-time payment of $125 or $250 for married couples who filed jointly to hit their bank accounts over the summer. Payments began in May and will continue throughout the summer.
Maine
Governor Janet Mills signed legislation providing a one-time relief payment of $850 to full-time Mainers making less than $100,000, $150,00 for head of household, or $200,00 for married couples who filed their taxes jointly. Residents who file their 2021 taxes by October 31 are eligible even if they owe tax money to the state.
New Jersey
Last year, Governor Phil Murphy approved one-time $500 payments for families. Recently, the governor planned to add workers who filed taxes with a tax identification number instead of a social security number, meaning non-citizens, their spouses, and dependents would also be eligible for the refund.
New Mexico
New Mexico residents have multiple refunds to look forward to this year. In July, single filers who earned less than 75,00 and married couples who earned less than 150,000 and who filed 2021 taxes will receive payments of $250 or $500, respectively. Additional payments of $500 and $1000 for single and married filers will be paid in two separate payments and released in June and August.
New York
Though New Yorkers don’t have cold, hard cash to look forward to, Governor Kathy Hochul enacted budget relief plans that include property tax relief of up to $970 and a suspension of the $0.16 gas tax through the end of the year to help ease the economic burden felt by many this year. The property tax credit is available to those earning less than $250,000 per year.
Virginia
Virginia Governor Glenn Youngkin has proposed eliminating the state’s grocery tax, which currently sits at 2.5%, and suspending the 26.2 cents per gallon gas tax for one year. The two bills advocating for these cuts are now being argued on the statehouse floor though opponents have effectively stalled the gas tax relief bill.
People from privileged groups may misperceive equality-boosting policies as harmful to them, even if they would actually benefit.
Previous studies have found that advantaged people often don’t support interventions that redistribute their resources to others who are disadvantaged, in zero-sum scenarios where there are limited resources.
Now, researchers have explored the degree to which people from advantaged groups think equality-promoting policies would harm their access to resources, in scenarios where the strategies would benefit or have no effect on their group, while bolstering the resources of a disadvantaged group.
Derek Brown at the University of California, Berkeley, conducted a series of studies involving a total of more than 4000 volunteers.
In one study, they presented white people who weren’t Hispanic with policies that didn’t affect their own advantaged group and benefited a disadvantaged group that they did not belong to – people with disabilities, those who had committed a crime in the past, members of a racial minority group or women. Importantly, the team told participants that resources – in the form of jobs or money – were unlimited.
For example, one policy would direct more money to mortgage loans for Latino homebuyers without limiting how many mortgage loans were available for white people.
Participants were then asked to rank how they thought the policy would affect the advantaged group’s access to resources on a scale from greatly harmful to greatly beneficial.
The team found that, on average, advantaged people perceived equality-boosting policies as harmful to their resource access, even though they were told that resources were boundless.
“We find that advantaged members misperceived these policies as a sacrifice to their group, even when that’s not the case,” says Brown.
The researchers then asked participants to consider a win-win scenario involving equality-promoting policies that benefited both the disadvantaged and advantaged groups – but the latter to a lesser extent. People were also asked to consider inequality-enhancing policies that would reduce access to resources for everyone.
In this case, the team found that most advantaged people thought equality-enhancing policies with benefits for all would be more harmful to them than inequality-enhancing polices that came at a cost to the advantaged group.
“We thought, maybe if we make a win-win or mutual-benefit situation, then maybe [advantaged people] will see the equality-enhancing policies as helpful. But they didn’t,” says Brown.
Advantaged people tended to see equality-promoting policies as less harmful to their resource access if they benefitted people who were disadvantaged but who shared an identity with them. For example, white participants generally thought they would lose less from a policy that directed relatively more money to disadvantaged white people, compared with a policy that gave disadvantaged Black people the same benefits.
“Advantaged people saw these policies more accurately when we made salient a disparity within their own group versus one that occurs between different groups,” says Brown. “This suggests that when we identify ourselves with a certain group, and see a disparity occurring within our group, we are motivated to reduce that in-group disparity.”
In another experiment, the researchers asked a diverse group of participants to take a bogus personality test and then assigned them into a made-up advantaged group. Again, they found that people tended to misperceive equality-promoting policies as harmful even when they benefitted the advantaged group. This suggests that anyone at an advantage – for any reason – may misperceive beneficial equality-boosting policies as harmful.
“It’s pretty troubling what we found. [But] I think people have the capacity to believe in these policies. And I think there’s a way forward, we just have to find it,” says Brown.
Education could help to tackle inequalities by making people more aware of this tendency to misperceive equality-boosting policies that would actually benefit them, says Brown.
“It was an ambitious series of studies that did an excellent job of ruling out alternative explanations,” says Dan Meegan at the University of Guelph, Canada. “The work paints a pretty dark picture for those trying to convince people to support policies designed to reduce intergroup inequality. The authors gave their participants every opportunity to see that helping disadvantaged groups need not come at the expense of advantaged groups, to no avail.”
“In terms of reliability and importance, this research checks all the boxes. What I would say is the fact that [the findings] aren’t surprising is alarming to me,” says Shai Davidai at Columbia University in New York.
Further work will need to establish if the same behaviour applies to people outside the US, although Brown and Davidai think it probably will.
“My own and others’ work has already shown that zero-sum beliefs replicate in many cultural contexts and across different nations, and I would not be surprised if this is the case for the current work as well,” says Davidai.
Guaranteed income has been having a moment: city-wide direct cash pilots have sprung up in Atlanta, Pittsburgh, and Los Angeles, the latter of which became the largest the country has seen, serving 3,000 residents. Some served a broader pool of low-income applicants, while others targeted very specific demographics. Gainesville, Florida’s program focused on the formerly incarcerated, while Columbia, South Carolina’s supported single Black fathers; in San Francisco, artists who took a hit from the pandemic received a basic income.
While data varies from city to city, preliminary results show an overwhelming benefit: After only a year’s distribution of $500 checks to low-income residents in Hudson, New York, the program found that employment more than doubled among recipients, from 29% to 63%.
Anecdotally, participants said they could plan beyond the day-to-day, start to pay off bills, and save money for grad school or a business. Mental and physical health improved. And, because of the unconditional nature of income versus other social welfare, recipients reported improved feelings of individual agency.
But turning those short-term pilots into long-term state or federal policy is more difficult than just collecting more evaluative data. Programs are often constrained by time and money. They have to keep goals narrow and administrative costs low, to maximize the cash going out to individuals. They also have to navigate deeply rooted cultural stigmas. A study by The International Public Policy Observatory found that a major barrier to pilot expansion is a lack of public understanding about how these pilots can benefit the whole society; rather, many believe their neighbors are receiving “free money” from their taxes. For such reasons, the federal government has been reluctant to fund long-term programs, preferring older social security systems because they’re stringently means-tested and conditional.
To combat those narratives, direct cash pilot programs need to engage local communities and transform them into advocates. That’s according to Income Movement, an organization that aims to fire up the people who participate in pilots, or may be eligible for future iterations; and their neighbors, to mobilize and influence elected officials with their own success stories. To help cities build their coalitions of neighborhood advocates, Income Movement is launching a guiding framework, the Pilot Community Engagement Program (PCEP), on May 16, ahead of June’s Guaranteed Income Community of Practice, a convening of more than 100 direct cash assistance pilot organizations from across the country, where the framework rollout will be the primary agenda item.
PCEP’s goal is, first, to educate neighborhoods about basic income, and to break stereotypes about what it means to receive cash assistance. It aims to partner with more pilots at local levels, and offer staff to help them run awareness events tailored to their specific communities. Finally, it will offer a digital toolkit, full of resources and best practices, to guide budding pilots on fundraising, targeting, and distributing funds. “Pilots themselves are this new invention, and people have really been inventing as they go along,” says Stacey Rutland, Income Movement’s founder and president.
Rutland says ordinary voters have been “one of those most important levers for change” in the biggest movements of the past, such as racial equality, gender justice, and gay rights. If pilots end without building a coalition of advocates, it’s a missed opportunity—after all, these are some of the country’s most economically vulnerable people, and the constituents whose stories should most influence elected officials.
Yet, while pilot programs are very good at collecting quantitative and qualitative data to show the worth of basic income to policymakers, what’s lacking from the advocacy landscape is an energetic movement.
Last summer, California earmarked $35 million for the U.S.’s first statewide income plan, for foster youth—though funds are delegated to local organizations and municipalities to run their own programs. “Engaging [people] from the very start is so critically important, so that they know, understand, and really feel invested in what we’re doing,” Rutland says.
Since its founding in 2019, the nonprofit has been building a proof-of-concept toward a model of engaging the community through educational events, and giving them the tools they need to run them, principally with three pilot programs. It partnered with San Diego for Every Child, a grassroots organization focused on ending child poverty in San Diego, which launched an income pilot in March. “Income Movement came in and helped us cultivate what those sessions would look like,” says director Khea Pollard.
Together, they developed a community-event structure to help educate residents and turn them into advocates for cash assistance policies. Last December, before the program’s application process began, Pollard’s organization, with help from Income Movement, invited residents from the pilot’s zip codes to community dinners. They screened a short documentary, Inherent Good, about a groundbreaking basic income pilot targeted to Black mothers in Jackson, Mississippi. Attendees were then given the chance to share their views on direct cash, and on what it could mean in their lives.
The event helped educate many who didn’t know what basic income was, or believed that it would be impossible to implement policy like that on a permanent basis. It also helped bust some deep-rooted meritocratic narratives, like the bootstraps trope that falsely assumes all Americans, regardless of status, can achieve economic success through hard work. Rutland and Pollard said the responses were generally positive; some attendees asked what they could do to help.
Every community is different and will need different approaches. In Nashville, where a planned pilot, Moving Nashville Forward, is still in its fundraising stage, Income Movement has focused on building trust among the broader community, and educating them on the intersection of race and economics in the South. They held a “lunch and learn” series with economic and civil rights leaders; this summer, they hope to screen The Neutral Ground, a film about the removal of Confederate monuments in New Orleans.
When PCEP launches, it’ll start working with new pilots; it’s already in talks with programs in Gainesville and Las Vegas. Depending on the communities, suggested strategies may involve town halls with politicians and workshops in small groups with income experts; participants may also be encouraged to man booths at fairs and markets, attend basic-income marches, and ask their local establishments to sign on in support. They may also work with older pilots to help append community elements. “Something like that would have been so helpful when we first started,” Pollard says.
Now up and running, San Diego’s pilot will end in March 2024, at which point Pollard says the PCEP is “going to be very beneficial for raising that local work to a national level.” They will need the energy of a movement to go statewide, especially in a state like California, where there’s potential to connect the multiple cities currently running pilots, and force momentum to pass state policy, Rutland hopes, in the next couple of legislative cycles. Then, there’s the federal level.
Income Movement remains agnostic about what a federal income policy might look like. But it points to the Child Tax Credit during the pandemic as an example of effective national policy, where millions received cash, which researchers estimated helped reduce the monthly child poverty rate by 26%.
Rutland says the credit’s expansion in 2021 was spurred by the voices of ordinary people. The group put forward the stories of program beneficiaries to lawmakers, including Senators Chuck Schumer and Ron Wyden, to share their stories, which was instrumental in persuading legislators to act.
That will be the group’s model for pushing their agenda in the future. “A lot of the time, the needs of everyday people are what becomes part of the compromise at the table when policy is happening,” Rutland says. “We want to make sure that the folks who are in those rooms know the experiences, know the needs of people.”
While artists struggle to get noticed in the Australian political arena, particularly in the lead up to an election, other nations take their artists more seriously – even seeing them as critical to a successful and vibrant community.
When I talked to artists during the pandemic, it became evident they needed four conditions in place to be able to practice successfully as artists: a regular income, a place to do their work, capacity to do their work and validation of their work.
Without these conditions, productivity and mental health suffer.
The Republic of Ireland has recently instituted a new scheme to provide three-year support for up to 2,000 individual artists, piloting a form of universal basic income.
Artists will be expected to meet at least two out of three qualifying terms to apply for the scheme: have earned an income from the arts, have an existing body of work and/or be members of a recognised arts body, such as a trade union.
Successful artists and creative workers will be given a weekly income of €325 (A$479), and be able to earn additional money without this basic income being affected.
The Irish Minister for the Arts Catherine Martin hopes this first model can be broadened to include all practising Irish artists in the future.
She sees it as a simple and economic method to protect artists from precarious existences while benefiting the community as whole.
International support for artists
The Irish scheme for a universal basic income for artists isn’t the only model.
In the US, several states and private foundations have developed schemes to provide direct support to artists as an outcome of the pandemic.
In May 2021, the City of New York paid 3,000 artists no-strings-attached grants of US$5,000 (A$7,080). Additional grants were provided for public art works, exhibitions, workshops and showcase events.
In June 2021, the philanthropic Mellon Foundation announced a new program called Creatives Rebuild New York to provide 2,400 New York artists with a guaranteed monthly income of US$1,000 (A$1,415) for 18 months.
The program employed another 300 artists and creative workers on an annual salary of US$65,000 (A$92,000) to work in collaboration with community organisations and local authorities for two years. They will also receive other benefits and dedicated time to work on their artistic practice. Both these programs were designed by artists.
The city of San Francisco provided US$1,000 per month for 130 local artists for six months from mid-2021. Thanks to philanthropic support from Twitter founder Jack Dorsey, the scheme expanded to support 180 artists for 18 months.
The city of St Paul in Minnesota, with a population of just over 300,000, has initiated a program to give 25 artists a guaranteed unrestricted income of US$500 (A$708) per month for a period of 18 months.
Closer to home, the House of the Arts (HOTA) on the Gold Coast recognised the economic dilemma of local artists during the pandemic.
In 2021, they employed four artists to work three days a week for six months on their own creative projects at HOTA. They were given a regular salary, a studio to work in, and were invited to participate in the organisational planning of HOTA.
Could we recreate this in Australia?
In Australia, some artists were eligible for schemes like JobKeeper and JobSeeker during 2020 and into early 2021, which could provide a model for how to support artists with a basic income going forward.
Ireland’s three-year pilot program for artists will cost the government around €25 million (A$37 million). With a population about a fifth of Australia’s, a similar scheme applied here using the same ratio could provide funding to 10,000 individual artists at a cost of A$185 million over three years.
This would be a drop in the ocean for the Australian federal budget, but it could be a game changer for the community, the arts and artists.
A universal basic income provides a regular amount of money that allows the individual to live above the breadline. It can transform an individual’s life while having a positive impact on the whole of society.
Schemes that provide an ongoing income to individual artists – such as royalty schemes, lending rights and long-term leasing of artwork by government bodies and corporations – are all important, but the amounts received from them for the majority of artists are usually quite limited.
Just imagine if every Australian arts centre, library, school, university, hospital, local council and government department employed an artist in residence. The artist gets an income while the institution gets an extraordinary input of ideas and imagination that can transform their environment.
We need to stop patronising our artists by giving them tiny grants and making them go through endless hoops and form filling to gratefully receive them.
Artists are essential to our community. It is time to demonstrate – like Ireland and New York – the success of our artists reflects our healthy and vibrant nation, and pay them accordingly.
