How to Pay for Universal Basic Income? Tax Wall Street and Industrial Robots

by Alex Vikoulov

​"Basic income is not a utopia, it's a practical business plan for the next step of the human journey." -Jeremy Rifkin

Unconditional Basic Income (also called basic income guarantee or social dividend) is a system of social security in which all citizens or residents of a country regularly receive an unconditional sum of money from a government regardless of any other income. Pilot programs have been introduced in a number of European countries and aimed at replacing outdated bureaucratic welfare systems altogether.

​Recently, Elon Musk had the chance to share his thoughts on Universal Basic Income (UBI) at the World Government Summit in Dubai. Musk argues that the government must introduce a UBI program in order to compensate for automation. Such program could boost productivity, encourage creativity, improve health, alleviate poverty, reduce crime, raise education, improve quality of life, and interestingly enough, stimulate economy as more money will be spent by an average consumer as well as serve as a "cushion" against future economic downturns due to the cyclical nature of capitalism.
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Every time I buy groceries or airtickets, I pay a sales tax for the semi-automated infrastructure that we all enjoy in our capitalist economy. What most people don't realize though is that there's one particular segment of the U.S. economy which has been fully automated for years now - financial markets, more specifically electronic stock market. Wall Street firms now trade their financial instruments via trading robots, or algorithmic programs, "algos". One second for a Wall St. algo is a "lifetime" in human terms.

High frequency trading algos make millions per trading day at the expense of the investing public. Why? Because algos are programmed to react in nanoseconds to changing market conditions and news. In other words, the stock market is "rigged", as most investors and traders don't get favorable pricing and execution. The debate goes on for years now but I think it's about time to implement a small financial transaction tax on high frequency trading. After all, if everyone pays for our common economic infrastructure, why should Wall Street firms be exempt?

The revenues collected from taxing industrial robots and Wall Street trading robots would be more than enough to pay for Universal Basic Income as preemptive measures against massive technological unemployment and social unrest. At some point, sooner than many people think, governments will be forced to implement UBI.

​Video Credit: Elon Musk at the World Government Summit in Dubai 2017

​On the way to abundance from classical capitalism to a post-scarcity, hypercollaborative economic model, where goods and services are produced at "near-zero marginal cost" in a new digital economy, UBI proponent Jeremy Rifkin argues that technological forces will inevitably displace employment but at the same time will create conditions for economic paradigm shift. Jeremy Rifkin is the principle architect of the European Union’s Third Industrial Revolution long-term economic sustainability plan, the bestselling author of twenty books on the impact of scientific and technological changes on the economy, the workforce, society, and the environment.

According to Rifkin: “The Internet of Things will connect everything with everyone in an integrated global network. People, machines, natural resources, production lines, logistics networks, consumption habits, recycling flows, and virtually every other aspect of economic and social life will be linked via sensors and software to the IoT platform, continually feeding Big Data to every node — business, homes, vehicles — moment to moment, in real time. Big Data, in turn, will be processed with advanced analytics, transformed into predictive algorithms, and programmed into automated systems to improve thermodynamic efficiencies, dramatically increase productivity, and reduce the marginal cost of producing and delivering a full range of goods and services to near zero across the entire economy.”

​Video Credit: Jeremy Rifkin on UBI

In an essay for the Green Institute, titled “A Universal Basic Income: Economic Considerations,” Frank Stilwell, a Professor Emeritus in Political Economy at the University of Sydney, writes that there’s an “inevitable uncertainty” surrounding UBI and its economic consequences, which all depend on how it’s implemented. Assessing the value of our collective inherited wealth would yield billions of dollars in cash to pay for UBI, while stimulating economy."Currently, those who benefit most from our socially built assets pay almost nothing to use them. But that needn’t always be the case. We could charge for using key compo­nents of our legal and financial infrastructure; for example, modest transaction fees on trades of stocks, bonds and deriva­tives could generate more than $300 billion per year. Such fees would not only generate in­come for everyone; they’d discourage speculation and help stabilize our financial system. Similar fees could be applied to patent and royalty earnings, which are returns not only to inno­va­tion but also to mono­poly rights granted and enforced by society," says Stilwell.

Microsoft Corp. founder Bill Gates also suggests that robots should be taxed in order to help finance social programs such as UBI: "Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level."

Video Credit: Quartz - Bill Gates on taxing robots

​Proponents of Universal Basic Income are becoming increasingly vocal about its implementation and for good reason - robots are coming sooner than most people realize, thus displacing millions of jobs. Perhaps, the next round of Occupy Wall Street movement should be transformed into Tax Wall Street movement with the more clearly defined political agenda.
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-by Alex Vikoulov

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Tags: Elon Musk, Jeremy Rifkin, Frank Stilwell, Bill Gates, Universal Basic Income, UBI, technology unemployment, technology displacement, basic income, social dividend, tax Wall Street, tax robots, Occupy Wall Street, high frequency trading, Wall Street algos, financial transaction tax

*Image Credit: Shutterstock

About the Author:
Alex Vikoulov is a neo-transcendentalist, cosmist, singularitarian, evolutionary extrapolist, digital philosopher, futurist, founder of Ecstadelic Media, painter and media artist, author of "The Syntellect Hypothesis: Five Paradigms of the Mind's Evolution". Graduated from Armstrong University, Berkeley, CA. Lives in Burlingame, California (San Francisco Bay Area).