Negative income tax/basic income vs minimum wage

[epiphany]

Correct me if I'm wrong, but you never hear debates on mainstream platforms regarding viable alternatives to the minimum wage. All you hear about is how terrible the country would be without it.

 

The basic income (or negative income tax) has been advocated by several Nobel economists from both the "left" and "right". Perhaps this is one of the reasons why the debate surrounding its implementation is not encouraged by the media and government - it spoils the illusion that policy making is concised to an over simplified, linear, left-right spectrum of partisan ideologies.

 

I'm not saying that a basic income would be the answer to our economic problems, but if nobody even knows about the alternatives to what seems to be a very inefficient way of dealing with poverty and exploitation, how do we expect to make truly informed decisions regarding the election of our political leaders?

 

If the only debate that is being sparked and encouraged is "minimum wage vs laissez faire", then we are doomed to be stuck in an extremely narrow, dichotomous way of thinking.

[Rupert_Baehr]

Aren't Income Support and Child Tax Credit forms of negative income tax?

[epiphany]

Aren't Income Support and Child Tax Credit forms of negative income tax?

 

No since most recipients pay tax. I'm talking about negative income tax as implemented through a basic income system.

[Rupert_Baehr]

Are you suggesting a 'Citizens' Income (As proposed by the Green Party)?

 

"The Green Party would [address this problem by] introduce[ing] a Citizen’s Income. This is an unconditional payment made to each individual as a right of citizenship – like a tax credit paid to everyone whether they’re working or not.

 

The introduction of a Citizen’s Income

will:

• Guarantee that everyone’s basic needs are covered by a non means-tested weekly payment, as of right.

• Replace benefits such as Job Seeker’s Allowance, as well as replacing personal tax-free allowances with a payment which is worth much more.

• Ensure that anyone who takes paid work will be better off financially for doing so.

• Make working part-time an option for many people who would prefer it, but who are currently discouraged from doing so.

• Put an end to demeaning benefits procedures and form filling.

• Act as a safety-net to those considering self-employment, so that they have less to fear if their business isn’t successful.

[epiphany]

I think we should consider it as an alternative, but based on a non-partisan proposal. While the Green Party are essentially advocating a basic income, their specific proposal is not the only way to implement and pay for it.

[Rupert_Baehr]

The Green Party's specific proposal is ludicrous. It simply wouldn't work

 

They said: "Guarantee that everyone’s basic needs are covered by a non means-tested weekly payment, as of right."

 

The Policy Document says everybody would receive the Citizens' Income.

 

If you were single, living on your own in Central London, how much would you need to:

Rent a Flat (no rent assistance - the CI will replace ALL benefits - so you pay market rent.

Pay the Property Tax

Pay for Heating and Lighting

Buy Food

Buy clothing

Lead a reasonable social life

 

(These are all things described by the Green Party as 'basic needs', so all must be covered by the Citizens' Income.)

 

Could you live on £300 a week? (It would have to be tax-free; there's not a lot of point in giving somebody enough to live on and then clawing some back in taxes.)

 

Assuming you could, then the Citizens' Income would be £300 a week, payable to everybody.

 

Consider Mr & Mr Jones, married with 4 kids living in Sheffield. It's a non means-tested income and it's payable to every citizen, so given that there are 6 people ín the Jones family, they would have a tax-free family income of £1800 a week - £93,600 a year after tax. Not too shabby.

 

I think I see why they're called the 'Green' Party.

[epiphany]

The Green Party's specific proposal is ludicrous. It simply wouldn't work

 

I don't see much value in debating the Green Party's, or any partisan proposal. It's about as useful as debating Leninism to gauge whether or not "communism works".

 

Incidentally, I have a feeling you've exaggerated/distorted their policy. Where does it say that children would get the same as adults? Also, the only real indication of amount they give is "A Citizen’s Income would initially be introduced at no less than the present level of Job Seeker’s Allowance for adult". Isn't that about £60 per week?

 

I certainly could live on less than £300 per week, however.

[Rupert_Baehr]

Where does it say that children would get the same as adults?

 

Where it says: "...The Green Party would address this problem by introducing a Citizen’s Income. This is an unconditional payment made to each individual as a right of citizenship – like a tax credit paid to everyone whether they’re working or not..."

 

Children are individuals. If the payment varies with age, location or anything else, it is hardly 'unconditional'.

 

Also, the only real indication of amount they give is "A Citizen’s Income would initially be introduced at no less than the present level of Job Seeker’s Allowance for adult". Isn't that about £60 per week?

 

Not so. They say "The introduction of a Citizen’s Income

will:

• Guarantee that everyone’s basic needs are covered by a non means-tested weekly payment, as of right.

• Replace benefits such as Job Seeker’s Allowance, as well as replacing personal tax-free allowances with a payment which is worth much more."

 

If the Citizens' income is going to pay for all basic needs, is going to replace benefits such as job-seekers allowance and is going to replace and be worth more than personal tax allowance, it is going to be rather more than £60 a week.

 

I certainly could live on less than £300 per week, however.

 

No doubt. - But yours is an individual case. I'm sure there are single people living in central London and (particularly as the CI is going to be non means-teated, it would have to be adequate to cover the needs of such people.) Given that housing benefit would disappear, then people living in expensive cities would have to pay market value rents.

 

I've no idea hw much it costs to rent a one-bedroomed flat in, say, Chelsea but I doubt you could do that and cover all your living costs on £300 per week.

 

Back to your original post, how would the negative income tax system work?(How does it differ from tax credts?) (Serious question.)

 

I have no objection to the government increasing the basic tax threshold (I no longer have dependents) but the present tax system in the UK is regressive.

 

The personal tax allowance in the UK is currently £7,475.

 

A single person gets that.

 

A family where the wife (or the husband) stays at home to look after 2 children gets that.

 

Why doesn't each individual get that? Why are tax allowances not transferrable? (particularly if there is only one wage earner?)

[epiphany]

All the definitions of citizens income I've read state that it is age related more for elderly and disabled than working adults and more for adults than children. A payment is guaranteed, not a fixed amount for everyone. I'm 99% certain the Greens would not be proposing to give children the same as their parents!

 

Also, I think it is correct to assume that living costs would be worked out relative to location.

 

Again I think it's more useful to learn about these alternatives from non-partisan groups (e.g. http://www.citizensincome.org , http://www.basicincome.org , http://www.globalincome.org)

 

The main debate seems to be around how it would be paid for, and I think the public dividend option seems to be the most logical. This, however, would require a change to our banking/investment system, of which politicians seem reluctant to do anything but nibble around the edges.

[Rupert_Baehr]

So there would be conditions which would have to be met ... hardly an unconditional income.

 

Thanks for the links, btw.

 

http://www.citizensincome.org uses the words 'unconditional' and 'payable to each individual as a right of citizenship'.

 

Infants are individuals, as are children, teenagers, adults and OAPS. If 'age' is used to determine whether an individual receives the income - or if age is used to determine the size of the income - it is not an unconditional income. It has conditions.

 

The BIEN site says 'A basic income is an income unconditionally granted to all on an individual basis without means test or work requirement.'

 

If it is an income UNCONDITIONALLY granted to all, then everybody gets the same amount. If people do not all receive the same amount, then that can only be for reasons of discrimination, arbitrary reasons or because there are CONDITIONS attached.

 

The GBIF site says: "...A Global Basic Income (GBI) will have to be introduced gradually, starting, for example, with an amount of $10 a month. This means that a family of five would get $50 a month. "

 

It appears that they do mean that everybody would receive the payment and that everybody would receive the same amount (irrespective of age or where they live.)

 

The GBIF brochure says:

 

"GLOBAL BASIC INCOME: TWO OPTIONS

... A GBI can be implemented in two different ways:

 

1. a global system: the UN, or another international agency, collects the funds and distributes a GBI to all people worldwide;

 

2. a global pact: an agreement which contains the agreed upon criteria and financing mechanism, but delegates the responsibility for the actual distribution to the national level."

 

Fine words. Consider the first option:

Does anybody really think the UN could (or would) 'Collect the funds and distribute a GBI to all people worldwide'? How much would end up in the pockets of UN officials (or members oftheir families?)

 

There isn't (AFAIK) 'another International Agency'. Who would set up such an agency?

The World Government?

Who would staff that agency?

How much would it cost to run?

 

Now the second option:

 

The developed world already provides significant amounts of aid to developing countries. The responsibility for distributing that aid is already delegated to the national level.

 

Is that delegation successful? Does that aid go to the people in those countries who really need it, or is a large amount trousered by already wealthy people?

 

The British government has said recently it is increasing aid to Pakistan. There are very many impoverished people in Pakistan. The country is so poor that it can afford nuclear weapons. There are, however, many wealthy people in Pakistan.

 

There are very many poor people in India (another impoverished developing country which can find money for nuclear weapons.) There are also many billionaires in India.

 

The wealthiest people in most developing countries have far more than the poorest in the UK.

 

Perhaps, to be eligible for handouts from the developed world, the developing nations should first sort out their internal wealth sharing problems?