Time to do away with "benefits" altogether.

[*_ash_*]

Paid for by who?

 

Taxation, what else?

 

It's late and I've only skim read it, but the way I see it is that there would have to be the SAME high taxation on non-income based tax (i.e oil/VAT), AND with non of the £160b [minus pensions] being paid out, and probably the NHS would have to be scrapped too. That would create about £200b (or £3332 for every person in the UK)

 

Is that what is being suggested? (not rhetorical btw, I know Vague and I1 will be able to answer this, that's all)

[I1L2T3]

It's late and I've only skim read it, but the way I see it is that there would have to be the SAME high taxation on non-income based tax (i.e oil/VAT), AND with non of the £160b [minus pensions] being paid out, and probably the NHS would have to be scrapped too. That would create about £200b (or £3332 for every person in the UK)

 

Is that what is being suggested? (not rhetorical btw, I know Vague and I1 will be able to answer this, that's all)

 

I think there would still be VAT and duty but personal taxation would be simplified (income tax and NI rolled together) and the benefits system would be very minimal and simplified. There would be no need to scrap the NHS.

 

And no, it's not universal credit as the government is currently implementing it.

 

There would need to be serious reform of other areas of tax too.

[Sharky123]

Two points ;

First it's wrong when people are better off not working than doing a days work. I see lads early 20s physically fit, who toss the days away, playing footy on the streets, going and hanging about in the parks etc and they don't have any intention of working.

 

Secondly - Child Benefit should be awarded to either first or first 2 children in a family. It might discourage people who pop out a new baby every 18 months and sit at home as a family of 12 living 100% on benefits. If you want 10 kids, then make sure you can afford them and not expect the state to pick up the bill.

[dawny1970]

how about stopping winter fuel payments for rich pensioners and those million or so living abroad, that would save about 1 billion straight away

 

 

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[anywebsite]

I assume that what would happen is everyone would recieve the citizens income (CI) say £800 per month and anyone working would pay back that amount from their wages upto their entire pay packet but would not pay any income tax or national insurance

 

so if you earned £700/month it wouldn't be worth working as CI is more.

If you earned £900/month you'd get £800 CI and £100 from your employer.

 

As much as i think the idea is good, many people on incomes just above or even slightly below CI would soon realise that working in low payed jobs doesn't pay. The reason many people take low paid jobs is because they don't want to fight a benefits system for their money and then get hassled about finding work. Those who know how to work the benefits system will continue to do so.

 

You assume wrong & you're totally missing the point. You're describing what happens with the current benefit system.

 

You'd get a basic income, then be taxed at a percentage of what you earn, similar to income tax now, except we wouldn't need any allowances or different rates of income tax.

 

So, say you get £800 a month CI & are taxed at 40%, if you earn £900 a month you'd get £800 CI & then you'd be taxed at 40% of the £900 you earned, so you'd get...

60% of your wages = £540 after tax, plus £800 CI, totalling £1340 each month - effectively getting £440 a month extra in benefits due to your low wage.

 

If you earn £8000 a month you'd get £5400 from your wages plus £800 CI so you'd get £6200 (effective tax of £1800 a month).

 

No matter how much you earn, if you earn another £1 you'd know it'll make you 60p better off.

[Zamo]

You assume wrong & you're totally missing the point. You're describing what happens with the current benefit system.

 

You'd get a basic income, then be taxed at a percentage of what you earn, similar to income tax now, except we wouldn't need any allowances or different rates of income tax.

 

So, say you get £800 a month CI & are taxed at 40%, if you earn £900 a month you'd get £800 CI & then you'd be taxed at 40% of the £900 you earned, so you'd get...

60% of your wages = £540 after tax, plus £800 CI, totalling £1340 each month - effectively getting £440 a month extra in benefits due to your low wage.

 

If you earn £8000 a month you'd get £5400 from your wages plus £800 CI so you'd get £6200 (effective tax of £1800 a month).

 

No matter how much you earn, if you earn another £1 you'd know it'll make you 60p better off.

 

Doesn't add up.

 

You are proposing paying everyone (adult I assume) £9,600 CI each year but the average income is £26,500, which would net you £10,600 for everyone working person.

 

But we have 10 million people over 65 and 7.7% of working age people out of work. You will not even have enough coming in to cover CI... let alone everthing else that has to be paid for.

[Cyclone]

Like the sound of that. Squirrel away what I can before it comes into force then do bugger all till death.

 

You could do that under the current system... So what do you imagine the difference is that would make it more attractive to do if this proposal were enacted?

 

Personally I'd like to see some actual figures that show how this will cost the country less than the current system...

 

---------- Post added 07-10-2013 at 11:29 ----------

 

Doesn't add up.

 

You are proposing paying everyone (adult I assume) £9,600 CI each year but the average income is £26,500, which would net you £10,600 for everyone working person.

 

But we have 10 million people over 65 and 7.7% of working age people out of work. You will not even have enough coming in to cover CI... let alone everthing else that has to be paid for.

 

Presumably though it would be possible to modify the CI until the numbers do add up.

 

It needs to do more than break even though, the government needs an income...

[anywebsite]

Doesn't add up.

 

You are proposing paying everyone (adult I assume) £9,600 CI each year but the average income is £26,500, which would net you £10,600 for everyone working person.

 

But we have 10 million people over 65 and 7.7% of working age people out of work. You will not even have enough coming in to cover CI... let alone everthing else that has to be paid for.

 

The numbers given were for illustration purposes only, the CI may need to be lower & the tax rate may need to be higher. Maybe it'd need to be more like £6000/year & 50% tax. It could encourage more people into work since benefit claimants wouldn't be blocked from taking part time work.

 

 

 

---------- Post added 07-10-2013 at 11:41 ----------

 

 

Personally I'd like to see some actual figures that show how this will cost the country less than the current system...

 

Just look at the sheer number of different benefits & their conditions, they all cost money to administer.

 

A negative income tax would cost about the same to administer as regular income tax does.

[Cyclone]

To administer yes, but it would cost more to actually pay.

 

There's no way to say whether it's a good idea until there are some real numbers shown to indicate a) cost and b) saving.

[anywebsite]

To administer yes, but it would cost more to actually pay.

 

There's no way to say whether it's a good idea until there are some real numbers shown to indicate a) cost and b) saving.

 

We can discuss the actual rates paid once agreed on the principle, you shouldn't base your figures on my example numbers, they were only intended as a rough explanation of the formula. The CI amount would need to be adjusted each year. It'd need to be affordable & ideally it'd cover basic living expenses.

 

The DWP costs over £250m a year just in staffing costs... https://www.gov.uk/government/publications/dwp-staff-numbers-and-associated-costs-2011-to-2012

 

The savings would be reduced admin costs, the DWP could be almost shut down. That saved money could either be paid to people as CI or a saving for the exchequer.

 

If we take the Telegraph's figure of £208 million paid out under the current system this year, that's nearly £3500 for every person in the country, including children... http://www.telegraph.co.uk/news/politics/9775955/Britains-benefits-and-state-pensions-bill-to-hit-record-high.html Under my proposal we'd get rid of tax allowances & income tax rates lower than the highest (they wouldn't be needed, since the CI would make a high flat rate income tax progressive), so there would be an increased tax take which would cover quite a bit too.