@Wes Blackwell - I don't much care for your style of blasting people that question the relevance of this topic - better to smile and move on. Moving on:
I'm a life-long Alaska resident and have been receiving "basic income" my whole life, so can add to the conversation here. We have no income tax, no state sales tax, and use the royalties from oil and gas to fund the state government. Our state and local taxes (SALT) amount to about 4% for the highest decile, and 6% for the lowest decile. Funding the government hasn't been working so great recently and the Permanent Fund Dividend (PFD) has been cut for the last three years to a much smaller amount (about $1,000) to fund the state budget.
The PFD was originally established as a way for the state to share its wealth with the people who live here. The fund was seeded with oil royalties from about 1975 to 1985. Since then, the Alaska Permanent Fund has been invested in markets around the world and is a premier member of the International Forum of Sovereign Wealth Funds. No part of the dividend is a direct royalty from the oil leases here, but many uninformed people believe it is directly from oil.
The PFD has been a really big topic because each person gets one. When you add these together, they can make a really big change in family budgets in the low-mid incomes. Can you imagine giving a family of 5 an additional $15,000 all at once? How about $60,000 if this proposed basic income becomes a reality? How often the money gets distributed will influence if it gets added to housing budgets. As a general observation, most people don’t end up putting it toward housing here. Here are my personal observations of where the dividend gets spent:
- Credit Card Bills – people will often spend in deficit here. When they receive the PFD, it will go towards the credit card balance they’ve been carrying for the last 11 months.
- Cars, Trucks, Cell phones and TVs – People that want to have the latest and greatest will use it to upgrade these or go bigger than they would have otherwise been able to afford.
- Donate it to a charity – usually people donate a small part to a charity.
- College savings – Responsible parents may choose to put their child’s dividend toward a college fund. This is what I do for my children’s income.
- Go on vacation – Many people use these to go to Hawaii in the winter, or at the very least Seattle to get some more vitamin D.
Other observations– other than save for kid’s college, people don’t really invest the money. It gets distributed, then immediately spent. Can you imagine the lines at Costco? The saddest thing about it really is that parents have full autonomy over their child’s income. Their money gets spent, but not always for their benefit. Additionally, people that need the money feel entitled and it shows in their behavior. I would rather have a population of people who work for everything, than a bunch of people dependent on this income.
My personal history of spending basic income has been: Years 1-12 - Parents spent it all. Years 13-19 Computers and video games. Years 20-present, tuition and student loans. Certainly, my personal spending of basic income got better over time, especially as I gained control over the funds. But the average high school educated person (we are a blue collar state), it will barely touch their wallets and won’t have any wealth re-distribution effect for them – which is the idea behind it correct?
