Universal basic income: The plan to give $12,000 to every American adult

ANDREW YANG: Universal basic income is an idea that's older than America, where Thomas Paine was for it at the founding of the country, he called it the citizen's dividend. Decades later Martin Luther King, Jr. was for it. He championed it before he was assassinated in 1968. And Milton Friedman and 1,000 economists signed a study in the late '60s saying this would be tremendous for both the economy and society. It received so much support that it passed the House of Representatives twice under Richard Nixon in 1971. And the only reason it didn't become law was that Democrats in the Senate wanted an even higher income threshold.

So a universal basic income has been with this country for a long time. And it actually became law in one state in 1982 where now every person in Alaska gets between $1,000 and $2,000 a year, no questions asked, from a petroleum dividend. It's wildly popular, has created thousands of jobs, has improved children's health, has decreased income inequality, and it was passed by a Republican governor, who made this argument to the Alaskan people: Who would you rather get the oil money the government, who's just going to mess it up, or you? And the Alaskan people said 'us', and now it's so popular that a majority of Alaskans which is a deeply conservative state generally the majority of Alaskans said they would accept higher taxes to pay for this dividend moving forward.

My plan, the Freedom Dividend, would pay every American adult, starting at age 18, $1,000 a month or $12,000 a year. This would push every American adult to just below the poverty line, which is $12,770 a year right now. But this money would get spent in Main Street businesses, on car repairs, food and tutoring for your kids, the occasional night out, a hardware store. It would go right back into our economy and would create 2 million new jobs, would grow the consumer economy by 8% to 10%, would make our families and communities stronger, would improved children's health and nutrition, would improve everyone's mental health and productivity. It would decrease domestic violence and hospital visits. So universal basic income is a powerful policy that helps improve human welfare, and that's why I'm proposing it as the centerpiece of my candidacy for president.

So the way I propose to pay for a universal basic income is based on a problem we have right now in our country, which is that more and more work and value is getting sucked up and soaked up by a handful of technology companies. Amazon, for example, is doing another $20 billion in commerce every year, and it's now pushing 30% of American malls and Main Street stores into closing. And so for the average American, you're seeing your Main Street stores close, and unfortunately being a retail worker is the most common job in the United States. The average retail worker is a 39-year-old woman making between $11 and $12 an hour. So the problem America is facing is that even as Amazon is soaking up more and more value, they're not paying much in the way of taxes. You probably saw the headline where last year Amazon enjoyed record profits and paid zero in federal taxes. And so the way we pay for a universal basic income is we put the American people in position to benefit from all this innovation by passing a value added tax, which is something that's already in effect in every other advanced economy. With a value added tax, the American public would receive a sliver of every Amazon sale, every Google search, every Facebook ad, every robot truck mile. And because our economy is now so vast at $20 trillion, up $5 trillion in the last 12 years alone, a value added tax at even half the European level would generate $800 billion in revenue which combined with current spending, economic growth, and putting this buying power into Americans hands, cost savings on things like incarceration, homelessness services, and emergency room health care, and then the value gains from having a stronger, more educated, more productive, more entrepreneurial population.

There's one study that showed that if you were to reduce poverty in this country, you would actually be increasing GDP by $700 billion just by making people stronger, healthier, better educated, and mentally healthier. And so we're going to be able to pay for this universal basic income if we put in a new tax that harnesses the gains of all these new technological innovations and brings them back to the American people.