Texas Republican Rep. Dan Crenshaw said Michigan Democratic Rep. Rashida Tlaib’s “deeply immoral” plan to give taxpayer money to middle- and low-income Americans is a basic “misunderstanding of economics.”
Tlaib’s proposed bill would directly offer an annual payment of $3,000 to individuals and $6,000 to families as a way to raise wages and alleviate poverty in the U.S., according to a report from The Washington Post published last week.
Crenshaw discussed the proposal Monday night with Fox News anchor Martha MacCallum.
After a brief discussion of California’s plan to give illegal immigrants taxpayer-subsidized health coverage — a move Crenshaw called “immoral” and “not fair to the taxpayers living there” — MacCallum turned the topic to Tlaib’s proposal.
“It’s a misunderstanding of basic economics and also human nature,” Crenshaw explained. “It’s a misunderstanding of economics because, one, we always have to ask the question, ‘How will we pay for it? Are we going to put our children into even more debt? Are we going to raise taxes on somebody else?'”
The Texas congressman noted that the U.S. already has “one of the most progressive tax systems in the entire world,” but such proposals entice “people not to work.” (RELATED: Dan Crenshaw Provides On-Location Report From The Border)
“If you are making more than $49,000 a year then you’re gonna have an incentive not to take that extra job or extra promotion because you’re gonna lose your benefits,” he said. “It’s not a smart or efficient way to do welfare policy.”
The “better way,” according to Crenshaw, is “earned income tax credits or work requirements for able-bodied people to receive welfare.”
“That encourages them to get a job and to keep working and to promote themselves, to actually be self-reliant. That would be the moral thing to do,” he said before explaining why it also gets human nature wrong:
It also misunderstands human nature, because it’s basically making people dependent on government. We have to ask ourselves the question, ‘Why wouldn’t she just propose a tax cut?’ She’s not proposing a tax cut because she wants you to be dependent on government. This is deeply immoral. It’s just not the right thing to do. We don’t want another bureaucracy handing out money. We just want people to keep more money, so why doesn’t she work with us on tax cuts?
Alaska has a universal basic income (UBI policy) that distributes unconditional cash payments of $2,000 to each resident of the state. In a study by the National Bureau of Economic Research that examines the impact of UBI in Alaska, researchers found that the payment did not entice people to stop working full-time:
It is reasonable to expect an unconditional cash transfer, such as a universal income, to decrease employment. A key concern with a universal basic income is that it could discourage people from working, but our research shows that the possible reductions in employment seem to be offset by increases in spending that in turn increase the demand for more workers.
Part-time work, however, increased by 17%.
Forbes notes that there was also a “noticeable difference in various sectors. … For instance, in sectors where the goods or services produced could be traded outside of Alaska, part-time employment went down, but this appeared to be more than offset by increases in part-time employment in the non-tradable sectors of the Alaskan economy.”
Tlaib reportedly called the plan “earned income tax credits on steroids” and a “broader umbrella for families that make $50,000 or less if you are single, or $100,000 or less if you are a family.”
However, as Justin Haskins pointed out, how many more of the nation’s millions of unfilled jobs would remain unfilled “if people were encouraged by checks from the government to cut back their hours or avoid work altogether?”