Should dividends be universal or based on need?
If our goal is to reduce poverty, a good case can be made for basing eligibility on need. But if our goal is to sustain a large middle class, the case for universality is much stronger.
Need-based eligibility necessarily divides society into two camps, higher-income payers and lower-income recievers. The former resent that money is taken from them, while the latter resent being viewed as welfare recipients. No one is happy with the arrangement.
Universality, by contrast, unites society by putting all its members in the same boat. The income everyone receives is a right, not a handout. This changes the story, the psychology and the politics.
The chief argument against universality is that it’s wasteful. Why give Bill Gates money he doesn’t need? The reason is that if the aim is to sustain a broad middle class, excluding the richest few percent saves only a small amount of money at the cost of broad political support. Better to include everyone, including children, and to tax the dividends at everyone’s marginal rate.
Where would the money to pay dividends come from?
The money for dividends would come from fees for use of co-owned wealth. For example, corporations could be charged for polluting our air and utilizing our financial system.
How big would the dividends be?
Dividends would vary from year to year; there’d be no guaranteed amount. Over time, it’s possible they could rise to about $5,000 per person per year, paid monthly or quarterly through electronic transfers to everyone’s bank account or debit card.
Consider what $5,000 per person per year would mean. If a child’s dividends were saved and invested starting from birth, they’d yield enough to pay for a debt-free college education at a public university. In midlife, $5,000 per person would add 25 percent to the income of a family of four earning $80,000 a year. In late life, it would boost the average retiree’s Social Security benefit by about 30 percent.
What is co-owned wealth?
Co-owned wealth consists of assets created not by individuals or corporations but by nature or society as a whole. It includes our atmosphere and ecosystems, sciences and technologies, and legal and financial systems. Such assets confer non-monetary benefits on all of us, but a small minority reaps vastly more financial gain from them than does the large majority. Paying equal dividends from co-owned wealth would assure that all members of society receive some financial benefit from wealth that belongs to everybody.
Are dividends a form of income redistribution?
Traditional welfare programs are based on redistribution from those with the most money to those with the least. Taxes and means-tested government programs are necessary elements of such redistribution. By contrast, co-owned wealth dividends involve no taxes, government programs or means-tested payments. They’re a way to allocate income fairly in the first place so there’s less need to redistribute it later.
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