Why Basic Income Doesn't Add Up

John Kay is the former director of the Institute for Fiscal Studies, a highly regarded, non-partisan research institute in London. As an economist, I am sure he sympathises with the reasons that proponents have put forth in favour of a basic income, both from left and right. But as someone who once made a living out of calculating how tax and welfare systems add up, he is not convinced. And in this text, he puts down the argument skillfully. 

The argument is as follows: simple calculations show that a basic income is either too expensive or too low to be meaningfully called "basic income"; all the potential sources of additional revenue to make it work, such as taxes on the rich, closing loopholes, and going after multinationals are fanciful; and after going through the various options of how to make basic income cheaper, he ends up with pretty much the welfare system that we have today. He concludes:

Attempting to turn basic income into a realistic proposal involves the reintroduction of elements of the [current] benefit system. The outcome is a welfare system which resembles those that already exist. And this is not surprising. The complexity of current arrangements is not the result of bureaucratic perversity. It is the product of attempts to solve the genuinely difficult problem of meeting the variety of needs of low-income households while minimising disincentives to work for households of all income levels – while ensuring that the system established for that purpose is likely to sustain the support of those who are required to pay for it. I share Piachaud’s conclusion that basic income is a distraction from sensible, feasible and necessary welfare reforms. As in other areas of policy, it is simply not the case that there are simple solutions to apparently difficult issues which policymakers have hitherto been too stupid or corrupt to implement.