Time to do away with "benefits" altogether.

[Zamo]

At the moment, on average, around £5,000 a year is paid out in benefits for every adult in the country, that's under the current system.

 

If you're getting free money from the government that reduces your overall tax rate, so even if it was set as high as 50% you'd only be paying close to that if you were earning an extremely high wage, like with higher rate tax now. The free money would replace the need for tax allowances, basic rate income tax, NI, etc.

 

The tax rate or the CI level can be adjusted, there's no need to spend more & collect less than under the current system, it's just a different way of distributing it that doesn't disincentivise work. There would also be a saving in administration costs for benefits by simplifying the system.

 

This Wikipedia gives a pretty good description: https://en.wikipedia.org/wiki/Basic_income_guarantee You can find more on Google, it's not a new idea.

 

---------- Post added 08-10-2013 at 08:19 ----------

 

 

Because everybody is paid it, so it automatically makes the income tax progressive.

 

I'm going to give example numbers chosen for simplicity here...

 

At 10,000 income & 50% flat income tax...

 

somebody earning 20,000 would overall pay no tax & get no free income, they cancel each other out, so it's the same as if allowances were set at 20,000

 

somebody earning 40,000 would pay 20,000 tax & get 10,000 income, so they'd pay 10,000 or 25%

 

somebody earning 100,000 would pay 50,000 tax & get 10,000 income, so they'd pay 40,000 overall, or 40%

 

By adjusting the income level & flat rate you can get a similar effect to having tax allowances & different rates of income tax. There's no need to use different rates, allowances & a basic income together, the income does the same job as allowances & lower rates. It doesn't only replace the benefits system, it works at higher levels of pay too.

 

50% would still be a high rate, the highest I'd support, it'd probably need to be over 40% though. I only chose that number to make the maths easy.

 

It shouldn't really cost much more to administer than current income tax, we could get rid of a large government department that only seems to exist to make people's lives more difficult & reduce the size of a few others.

 

would all income be taxed like this? What about capital gain, dividends and interest? What companies pay by way of corporation tax?

 

What would the policy be for immigrants? Will you have to change imigration to stop a flood of people overloading the system (assuming it isn't overloaded anyway)?

 

Wouldn't there be a huge increase in fraud - I can think of a few schemes straight off that would almost certainly spring up?

[psynuk]

I'm with you. A basic income for everyone. If you want more out of life, work for it.

 

Yep, That's exactly how it should be.

When your born onto an island that is already owned by everyone else. Without the means to disentangle yourself from the essentially fuedalist/capitalist society your forced to live in. you should be provided for in a decent manner and if you want to 'get more' you should have to do more (or abandoned, not sure which).

 

 

"We wouldn't have pointless arguments over 'benefits', which is essentially compensation in the form of a minimum income guarantee for the poorest due to the removal of economic freedoms due to the privatisation of the nation's land, in order to avoid a revolution."

nail/head...

[I1L2T3]

Well said psynuk. Benefits are a payment to compensate for economic exclusion, or for economic under- participation. Without them, in a system that must because of the way it operates produce losers, not providing the payoff would cause social chaos. It's hush money.

 

Best to do away with it. Once we do we can forget about the shirkers which has to be one of the most unhealthy debates going.

[psynuk]

I was once trying to explain to someone that you can't opt out of the system in this country. You're supposedly free, but with a huge set of restrictions that are enforced by the Queen's army/police etc.

If I wanted to live off the land I'd soon be trespassing and upsetting the queen/or someone else in some way or other.

His response was in the order of 'well get a job and buy your own land'.

 

There will always be people who just simply don't wish to be a part of the society they're born into. In an older time they'd be left to nature and their own devices and that'd be that.

In our modern society we don't wish to witness the demise of those who can't be bothered or suffer the consequences of their desperation. Hence benefits.there should always be provision or those in our kind of society but that has to go hand in hand with greater reward for those who contribute.

[I1L2T3]

I was once trying to explain to someone that you can't opt out of the system in this country. You're supposedly free, but with a huge set of restrictions that are enforced by the Queen's army/police etc.

If I wanted to live off the land I'd soon be trespassing and upsetting the queen/or someone else in some way or other.

His response was in the order of 'well get a job and buy your own land'.

 

There will always be people who just simply don't wish to be a part of the society they're born into. In an older time they'd be left to nature and their own devices and that'd be that.

In our modern society we don't wish to witness the demise of those who can't be bothered or suffer the consequences of their desperation. Hence benefits.there should always be provision or those in our kind of society but that has to go hand in hand with greater reward for those who contribute.

 

Agree. With the citizens income being a basic subsistence payment the argument about shirkers ends. If you are faced with the opportunity that every pound you earn you add to your income then by sitting back on the basic income and not working makes you an idiot, not a shirker. The rest of us can forget about the intentionally idle and get on with looking after ourselves.

 

It's a unique policy. On the face of it very socialist but an the same time it allows for fierce individualism - how you use the platform is entirely up to you.