Guaranteed Income

Guaranteed income refers to ongoing cash payments given directly to individuals. Guaranteed income is meant to be consistent and unconditional, with no strings attached and no work requirements. Guaranteed income supplements, rather than replaces, the existing social safety net and prioritizes channeling money to low-income, no income, and middle-income people, thus mitigating income inequality.

A guaranteed income is a direct and effective way to combat poverty by ensuring no one can fall beneath a government-issued income floor. Giving people unconditional cash allows them to address their most pressing needs, and available data show that, when people receive cash, they spend it in ways that support themselves and their families. Analysis of programs taking place across the country shows that guaranteed income payments lead to:

• Reduction of people living below the poverty line;
• Increased ability to meet unexpected expenses and save for emergencies;
• Increased income stability;
• Increased ability to pay bills on time;
• Increases in full-time employment, and ability to pursue further education and training;
• Increased ability to seek medical care;
• Significant mental health benefits, stress relief, and optimism about the future; and
• Reduction in hunger and child obesity.

Guaranteed income is also widely popular. A 2021 survey by Data for Progress found that voters support a guaranteed income by a 16-point margin with Black and Latinx voters strongly supporting a guaranteed income at 79 and 74 percent, respectively.

This guide provides state-level advocates and policymakers with information regarding the choice points in program design, the positive impacts shown by existing research, and special considerations for states including options for guaranteed income implementation, interactions with existing public benefits programs, opportunities for public funding, and promoting racial equity.

States have an opportunity to boldly reimagine the social safety net, learn lessons from local programs, and lead by example by implementing permanent, publicly funded guaranteed income programs. Historically, states have played a critical role in testing concepts to improve the lives of low-income residents and can create blueprints for national implementation, contributing expertise and momentum to the movement for a much-needed federal guaranteed income. States have greater revenue raising powers to fund larger scale programs and in the immediate term have an opportunity to leverage federal COVID relief funds provided by the American Rescue Plan Act.

Many people in the United Stated are struggling to meet their basic needs, and the COVID-19 pandemic has worsened already unconscionable trends of increasing income and wealth inequality. Recent federal relief policies such as increased unemployment insurance, an expanded and fully refundable Child Tax Credit (CTC), and stimulus checks have led to burgeoning support for permanent cash transfer programs like a guaranteed income, and provided further proof that cash is effective in helping people meet their needs. Political gridlock and polarization threaten to frustrate attempts at a federal guaranteed income in the immediate term, but states have an opportunity to lead by funding permanent programs representing a significant step toward realization of a federal program.

As states consider the creation of large-scale, publicly funded guaranteed income programs, they should evaluate options for implementation, the impacts on existing means-tested benefits programs, opportunities for revenue raising, and the promotion of race equity.

States can adopt one of the following implementation strategies:

• Expanding the State Earned Income Tax Credit (EITC): Enact reforms to create a more generous state EITC that broadens eligibility, increases credit amount, removes work requirements, and ensures payments are monthly.
• Dividend from an Invested Public Fund: Establish sovereign wealth funds to grow revenue for a state-level guaranteed income administered via a periodic dividend from the fund. Alaska’s Permanent Fund Dividend Program is the most prominent example and has paid every Alaskan an average of $1,600 annually since 1980.
• Building a New Program: Leverage existing benefits-granting agencies to administer a guaranteed income in addition to other core means-tested programs. State agencies may also have the ability to utilize applicant eligibility information from existing programs easing the burden on applicants.

Protecting Benefits Is Key

Guaranteed income supplements the existing social safety net, and steps must be taken to protect existing program eligibility. Because of means-testing, any additional income from a publicly funded guaranteed income program could impact eligibility for SNAP, TANF, Medicaid, and housing benefits. The frequency of payments (lump sum or recurring) and the state’s chosen implementation strategy will be highly relevant in assessing whether publicly funded guaranteed income payments can be excluded from the eligibility determination under federal law.

Raising Revenue to Pay for a Guaranteed Income

In the short term, there are opportunities to utilize federal dollars from the American Rescue Plan Act (ARPA), which provides $350 billion in funding to states, counties, metropolitan cities, and municipal governments, to fund guaranteed income programs. However, in order for a state program to be permanent, there must be a permanent revenue source. Guaranteed income envisions a program that is redistributive – funded by taxation of people and entities who have the most income and wealth. Institution or recalibration of state income taxes, or wealth or inheritance taxes, are potential strategies for ensuring equitable revenue raising.

Centering Race Equity Builds Stronger Communities

Public benefits programs continue to enact racist practices that embrace and perpetuate white supremacist features, such as “family caps” and work requirements. A guaranteed income rejects racist narratives and structures that permeate the current safety net and uplifts a vision where every person is entitled to have their basic needs met and live with dignity. Some models even contemplate additional payments to Black families in recognition that the wealth created in the U.S. is inextricably linked to Black labor, sweat, and tears, without Black people ever receiving the benefits of that labor. States also have an opportunity to include robust immigrant eligibility in contrast to a long history of exclusion of immigrants from federal benefits.

Every person deserves to be able to meet their basic needs, and by implementing guaranteed income programs funded through equitably raised revenue, states can progress toward economic justice for their lowest-income residents regardless of employment status. Together we have the resources to provide for each other; it is not only possible and practical, but immoral to do otherwise.