Free money for all!

[andrewducker]

There's a new political party in the UK. It's got numerous ideas I don't agree with, but one of them is something I've been meaning to mention for a long while - Universal Benefit.

The main problem with most benefits is that they either discourage people from getting jobs or they have a gap where you'd be better off not earning a bit more money. It makes no sense to me to discourage people from working, but I also believe that the government should provide a safety net for people so that they don't starve on the streets.

In addition to this, many low-paying jobs treat their employees like shit because they know they can't leave easily. If there was a way for people to leave terrible jobs, there'd be no alternative but for employers to make the job less terrible if they wanted staff.

I was therefore glad to see that the idea of Universal Benefits is getting an airing. The basic idea is that all people are given an amount of money necessary to cover basic food, clothes and housing. This replaces the current (in the UK) income support, housing benefit, family benefit, pension, student grant (not that this really exists much anymore), etc.

In order to cover this, a simplified tax system is put into place, whereby a flat x% is paid by all people with no income bands, personal allowances, etc. - after all, now that your essentials are covered, anything else is technically luxury of some kind. Poorer people will still be significantly better off because the benefit will be a larger proportion of their income.

The simplification of the benefits system should slice away a whole layer of bureaucracy, making it easier for poor people to get access to money they need and allowing for more flexibility in the labour market because people will find it easier to leave a job and take another despite their being a gap in between.

Apparently as an idea it's been around on the fringes for a while, but this is the first time I've seen it proposed by a political organisation (albeit one that doesn't stand a chance of being elected). Hopefully, it'll catch on.

Comments

[cangetmad.livejournal.com]

Um, it's actually a core policy of a political party with an MSP: the Scottish Greens. AFAIK, it's also policy with the Greens down south, who have London Assembly members.

[andrewducker]

Ooh, cheers. I didn't realise that, I'll have to do an investigation when I have a moment.

Out of interest, do you know of any decent critiques of it? I'd like to know what attacks there are against it so that I can work out some defenses :->

[cangetmad.livejournal.com]

citizensincome.org has a lot of articles, but obviously they're pro-CI, so there's not a lot of critiquing going on there...

[kpollock.livejournal.com]

I always thought that this sounded sensible. IIRC somebody worked out that the saving in admin meant we could pay every adult about £100/week.

It will never ever ever happen though. Most people have a nasty side if they think somebody else is geting money for nothing (even if they get it too). Imagine the fuss about immigrants!

[heron61.livejournal.com]

I remember seeing something similar proposed in a column in an old issue Analog Science Fiction Magazine from the 60s that I found in a yard sale. This idea makes excellent sense. I can also see the virtue of making the tax progressive (wealthier people pay a higher percentage) but I would in no way object to the proposed system. If this ever happens in Britain, I'll likely change my mind about moving there. Also, I'd imagine that such a plan is considerably more likely to pass in the UK than the US, although admittedly considerably more likely means little when the respective chances are amazingly unlikely vs. utterly impossible.

[allorin.livejournal.com]

These are two separate issues - what state benefits should be provided, and what is a fair tax? Yes, they can be run in tandem, and it makes sense to do so, but one can exist without the other.

Myself, I have been continually disappointed that Labour continue to shy away from introducing the only possible 'true' socialist tax policy - a straight x% income tax for everyone, and no other taxes. At the moment, Joe Poor pays the same amount of tax for his petrol as Mike Rich does. If everyone was taxed say, 35% on their income, then proportionately the rich would pay more than the poor - which is socialist policy. The rich would still be richer, but they'd be contributing more according to their means.

[andrewducker]

Under your system, poor people woukld pay nore tax and rich people less. I really can't see the Labour party doing that. Not without some other means of providing poor people with the money to cope (like a universal benefit).

Hmm

[johnbobshaun.livejournal.com]

Looked at some of their proposals for the Scottish elections. I really don't think that Scotland needs its own upper house of peers. If you are going to adopt a whole bunch of policies that suppoosedly make the goverment more accountable to the people you need a more represenative second chamber if you need one at all.

And I'm firmly against proportional systems of income tax, you need a progressive system (what we have now, effectively).

Re:

[allorin.livejournal.com]

Eh? What you said makes no sense. Under my system, you would pay a proportion of your salary as tax, and that would be the only tax you pay. How the heck would poor people therefore pay more than rich people?

Re: Hmm

[andrewducker]

I'm in favour of a progressive system at the moment, because poor people need a higher proportion of their income just to survive. but once people have 'survival money', I don't see any reason why all the rest of people's incomes couldn't be taxed equally. Of course, I'd set the combined tax at 50% (and abolish National Insurance, thus getting rid of the disparity of no NI at higher levels of income)

[andrewducker]

More than at the moment and less than at the moment.

The whole idea of lower tax breaks for poor people is that when you only earn £60 a week, you need nearly all of that, but once you earn £500 a week, you need much less of it. Of course, you still _want- lots of it, but your needs are proportionally less.

[allorin.livejournal.com]

D'oh! You completely miss the point.

The person who earns £60 a week still pays tax - on fuel, clothes, food etc. You pay tax practically every time you spend your money.

And that's the point - the person who earns £6000 per week pays the exact same tax on their petrol etc as the person who earns £60. Therefore, proportionately, the person who earns £60 a week is paying more tax (ignoring the higher tax bracket).

The point of a flat tax is that the person who earns £60 a week would not pay more tax. They'd pay a larger amount directly out of their salary, but then no tax on any consumer items. They would therefore _not_ be worse off. Additionally, the £6000 a week person would be paying far more tax, and therefore supporting the system more, and yet still be proportionately better off.

I can't see where the debate is - this is true socialist policy.

[andrewducker]

A true socialist policy is any policy that's redistributative and comes close to "from each according to his abilities, to each according to his needs"

The amount of tax also varies largely depending on wht you buy. Tax on food is non-existent, ditto tax on books and clothing for children. Tax on petrol, alcohol and cigarettes is extremely high.

In fact, at the moment, poor and rich people pay different amounts of tax on their income and then rich people pay more becuase they buy more expensive stuff too.

Oh, and companies buy a hell of a lot of stuff, which would suddenly be untaxed too. Think of all the money that comes in from fleets of company vehicles buying petrol.

I suspect that to cover the same amount of income that we would otherwise get, the flat tax would have to be much, much higher.