Guaranteed income can reduce poverty. Policy design matters.

The concept of a guaranteed income has resurged in public discourse in the United States as a potential anti-poverty policy. A common argument against such a policy is that the cost is too large and the benefits are not targeted. It has been about 50 years since the negative income tax (NIT) experiments tested the idea of an income floor to support vulnerable families, and in just the last few years there have been Congressional proposals for a universal child credit, an NIT-type tax credit, as well as a presidential candidate running on a universal basic income (UBI). The common characteristic of these proposals is to guarantee a given level of income for eligible individuals or families. 

In this series of three briefs, we:

• Explore the feasibility of financing a guaranteed income and the potential poverty impacts

• Compare recent income maintenance proposals and discuss how design affects costs and poverty impacts, and

• Show how a carbon tax and dividend affects child poverty depending on how universal the benefits are.

In general we find that income guarantee plans can work to reduce poverty at reasonable costs, such as through a fundamental federal income tax reform and carbon tax-and-dividend plan. However, poverty impacts depend on who is eligible and how the benefit is financed. A carbon dividend could reduce poverty and improve the environment, though considering children in the benefit design is crucial for economically vulnerable families.

Guaranteed Income Briefs:

1. Income Guarantee Benefits and Financing: Poverty and Distributional Impacts 

2. Comparing Recent Income Maintenance Proposals: Universal Basic Income, Negative Income Tax, and Child Allowance

3. The Case for Counting Children in a Carbon Tax Dividend Plan: Net Benefits and Poverty Implications for a Per Capita Dividend

We are grateful to the Economic Security Project for helping to make this work possible.