EITC For All: A Universal Basic Income Compromise Proposal

Universal Basic Income ( UBI ) is a concept that has recently begun to enter the popular political consciousness in the United States. It is defined as a regular cash income paid to all, on an individual basis, without means test or work requirement. It is invoked for a wide variety of political and social purposes, but is almost always presented as radically different from existing governmental welfare and transfer systems. Once a UBI is disaggregated into discrete policy components, it is possible to imagine to what degree existing programs share the benefits (and detriments) of a UBI to a greater or lesser degree, and reforms could be made to make existing programs more UBI-like, if that would be beneficial.This Article re-envisions a UBI as a series of reforms to one of the largest existing governmental transfer program in the US: the Earned Income Tax Credit (EITC). The EITC is a work-conditional transfer program, and so any UBI-like reforms to the EITC will lack the defining characteristic of a UBI - that is it not work conditional. On the other hand, a number of reforms to the EITC would make the program more UBI-like. These include: (i) that the EITC phaseout be removed so the program is no longer means-tested (no means testing); (ii) that the program benefit be applied on an individual basis, decreasing the importance of support of custodial children (individuality); (iii) that the administration of the program be reformed so workers can receive payments throughout the year (regularity). By starting with the EITC and proposing a series of reforms to make it more UBI-like, one is able to accurately assess the differences between a UBI and at least one large governmental transfer program, diminishing the impression that a UBI is too utopian to actually become reality. One is further able to build on decades of tax policy research about the successes and failings of the EITC.Of particular importance to both supporters and critics of the UBI is its lack of work requirement, and that is often its most philosophically controversial element. By exploring UBI-like reforms to the EITC (which is work conditional), this paper relaxes a defining aspect of the UBI - that it be free from work requirements. For some supporters, this makes any comparison between the program proposed and a UBI nonsensical. But the EITC is already more like a UBI than many work-conditional transfer programs, and reforms could make its work-conditionality even less problematic. Still, maintaining the EITC\u27s structure as a work-conditional transfer program distinguishes it dramatically from a true UBI, and loses a number of the central benefits of a UBI. It is the premise of this paper that an exploration of a partial UBI of this nature - a compromise - is useful for future discussion of the issue, even if the proposed program is a distinct second best. It is not a coincidence that Senator Kamala Harris, a contender for the 2020 Democratic presidential nomination, has proposed a UBI-like program, the LIFT the Middle Class Act, which shares many of the features of the reforms proposed in this Article

Fixing the Johnson Amendment without Totally Destroying It

The so-called Johnson Amendment is that portion of Section 501(c)(3) of the Internal Revenue Code that prohibits charities from intervening in electoral campaigns. The intervention has long been understood to include both contributing charitable funds to campaign coffers and communicating the charity\u27s views about candidates\u27 qualifications for office. The breadth of the Johnson Amendment potentially brings two important values into conflict: the government\u27s interest in preventing tax-deductible contributions to be used for electoral purposes (called nonsubvention ) and the speech rights or interest of charities. For many years, the IRS has taken the position that the Johnson Amendment\u27s prohibition on electoral communications includes the content of a religious leader\u27s speech in an official religious service -- a minister may not express support or opposition to a candidate from the pulpit. For at least as many years, some commentators and legislators have found this application of the Johnson Amendment especially problematic, since it implicates directly the freedom of houses of worship speech and religious exercise. These Johnson Amendment critics sought to provide some carveout from the Johnson Amendment\u27s general application to permit speech that includes ministers pulpit speech without creating a massive loophole for the Johnson Amendment\u27s generalprohibitionon campaign intervention. Other commentators have long argued that a limited carve-out for certain types of speech is not possible--that permitting any communication of the organization\u27s views, even in pulpit speech, would provide too large a loophole in the overall treatment of campaign contributions and expenditures. This Article reviews the leading proposals to fix the Johnson Amendment, and finds them all lacking. It then proposes four types of modifications that could be used to properly balance the speech interests of charities (including churches) with the government\u27s interest in a level playing field for campaign expenditures (nonsubvention). These proposed modifications include: (i) a non-incremental expenditure tax, (ii) a reporting regime, (iii) a disclosure regime, and (iv) a governance regime. The Article concludes that in order to properly balance nonsubvention with speech interests of charities, a modification of the Johnson Amendment should include some version of all four types of interventions

The Boundary Between the Not-For-Profit and Business Sectors: Social Enterprise and Hybrid Models

It is conventional to think of not-for-profit organizations as inhabiting a sector distinct from the private business sector on one side and the government sector on the other. One of the traditional goals of law in the nonprofit sector has been to distinguish entities in the nonprofit sector from those in the business sector--to define and police the boundary, both so governmental benefits can be provided to not-for-profit entities and so stakeholders can understand which organizations are bound by the nondistribution constraint. Therefore, when there are legal reforms that complicate or alter the boundary, these reforms should be evaluated not only with respect to whether they adequately protect the government\u27s interest in providing benefits to worthy enterprises, but also whether the new reforms promote or detract from the sector\u27s ability to communicate clearly with stakeholders.This chapter (i) introduces the two primary ways that the law of nonprofit organizations attempts to regulate the boundary between the nonprofit and business sectors, (ii) roots commercial activity by nonprofits in the long history of fee-for-service nonprofit organizations that operate very much like for-profit businesses, and (iii) introduces and evaluates a number of new legal forms created for for-profit social enterprises.https://digitalcommons.wcl.american.edu/facsch_bk_contributions/1244/thumbnail.jp

Some Implications of the Agency-Cost Theory of the Nonprofit Firm

Social enterprises are business enterprises that seek to pursue social goals. In order to do that, they need to be able to make binding commitments to a variety of stakeholders that they will indeed pursue such goals. At least since Henry Hansmann wrote his seminal works on nonprofit organizations in the early nineteen eighties, it has been widely understood that a significant value of the nonprofit organizational structure is the ability of the nondistribution constraint to serve as just such a commitment mechanism. In the case of for-profit social enterprises, where the nondistribution constraint does not apply, what mechanisms might we expect to be useful or necessary for the organization to make commitments to stakeholders?This chapter applies some insights from Hansmann\u27s agency theory to the for-profit social enterprise context. It observes that very different commitment mechanisms are useful depending on which stakeholders the organization wants to commit to. It also distinguishes between negative and positive commitments and why the distinction between the two is so important to the likely success of any commitments mechanism.https://digitalcommons.wcl.american.edu/facsch_bk_contributions/1243/thumbnail.jp

Fixing the Johnson Amendment Without Totally Destroying It

The so-called Johnson Amendment is that portion of Section 501(c)(3) of the Internal Revenue Code that prohibits charities from intervening in electoral campaigns. The intervention has long been understood to include both contributing charitable funds to campaign coffers and communicating the charity\u27s views about candidates\u27 qualifications for office. The breadth of the Johnson Amendment potentially brings two important values into conflict: the government\u27s interest in preventing tax-deductible contributions to be used for electoral purposes (called nonsubvention ) and the speech rights or interest of charities. For many years, the IRS has taken the position that the Johnson Amendment\u27s prohibition on electoral communications includes the content of a religious leader\u27s speech in an official religious service -- a minister may not express support or opposition to a candidate from the pulpit. For at least as many years, some commentators and legislators have found this application of the Johnson Amendment especially problematic, since it implicates directly the freedom of houses of worship speech and religious exercise. These Johnson Amendment critics sought to provide some carveout from the Johnson Amendment\u27s general application to permit speech that includes ministers pulpit speech without creating a massive loophole for the Johnson Amendment\u27s generalprohibitionon campaign intervention. Other commentators have long argued that a limited carve-out for certain types of speech is not possible--that permitting any communication of the organization\u27s views, even in pulpit speech, would provide too large a loophole in the overall treatment of campaign contributions and expenditures. This Article reviews the leading proposals to fix the Johnson Amendment, and finds them all lacking. It then proposes four types of modifications that could be used to properly balance the speech interests of charities (including churches) with the government\u27s interest in a level playing field for campaign expenditures (nonsubvention). These proposed modifications include: (i) a non-incremental expenditure tax, (ii) a reporting regime, (iii) a disclosure regime, and (iv) a governance regime. The Article concludes that in order to properly balance nonsubvention with speech interests of charities, a modification of the Johnson Amendment should include some version of all four types of interventions