Citizen's, or Basic Income

Daphnedill is right Welshwife; this is being looked at all round the world with a few countries trialling it. One of the drivers is the possibility of a sharp downturn in jobs, at least for a period of time, as robotics and AI kick in.

Gettingonabit the whole point is that it is unconditional and is paid to all 'citizens'. This is how you take it away from the benefits system. It is looking at the support system in a totally different way. Also, unlike benefits, it is paid to the individual - each and everyone. NI is not relevant to this concept - although what constitutes citizenship would have to be decided.

grace I'm confused. If such a system is to be unconditional, where's the money going to come from to fund it? If people are not earning money, then there's no growth. If there's no growth, there's no money. You can't run a sophisticated economy on fresh air.

If there's no incentive to earn money because of a universal benefit, then those who DO earn more will end up supporting those who don't . Which is fine, but not a million miles away from the system we've got.

What am I missing?

Not all people will not be earning gettingon and taxation will be used to take back some of it from those with enough, earned or unearned, to really not need it.

Firstly it may be worth clarifying, that what we are talking about here is a 'partial' basic income. No one will be expected to live on it and, if it is taken up, some countries may wish to move to a 'full' basic income. But back to the 'partial' version we are talking about.

Let's say that the child citizen/basic income was set at £55/60. The various child benefits would disappear and so would some of the complex claiming. This, plus taxing it back off those at the top of the income table.

The adult one might be set at say £70/75. Again, no one would be claiming job seekers so this goes back in the pot. The amount of administration, cost of running job centres, etc., would also be put in the pot and again the tax system would work to take it back from anyone at the to of the tax system.

And let us say those reaching older age (67?) got a citizen/basic income was £155. This would mean that no basic state pension would be received. State pension is, in fact, paid from current NI contributions which is, in effect, a tax. It has never been a fund which mounted up before pensions were drawn. Again tax would be used at the top end and other savings would be made by simplifying the system.

That's my understanding of the basics. There are other areas where savings could be made and higher income achieved so either more tax paid into the exchequer or or less benefit paid giving more flexibility.

You're saying that JSA and admin costs would 'go back into the pot', but there would be no NI payments from anyone, working or not.

If this were to be only a 'partial' basic income, how would it be topped up if people are unable or unwilling to work? There would still have to be state support in some form, but paid for how?

Most people are willing to work. The tax system will be altered to reflect the basic income.

www.taxresearch.org.uk/Blog/2017/01/05/why-universal-basic-income-is-seizing-the-agenda/

1 Why would no NI be paid?

2 People would work, because people would want to have more than the basics.

3 Growth isn't actually necessary for a society/economy to function.

I think it would be many years before UBI would be politically acceptable in the UK as a whole. However, it will be interesting to see evaluation of the trials. There will, undoubtedly, be some unintended consequences.

It could work. Currently, approximately 70% of people take more from the state over their lifetime than they contribute. People are usually 'givers' during part of their life and 'takers' at other times.

It would need to be costed carefully and 'sold' politically. It would be interesting to know how many billions is spent on administering public money. Much of this could be saved.

No NI would be paid because it obviously wouldn't be part of the system.

As in any other system, it would depend on the government as to whether they would keep NI, or just subsume it into the tax system.
There really would be no need for NI, as there would be no need for any money to be hypothecated.
It might frighten some people if they realised that NI is just tax by another name, and saw how much they did actually pay.

"You're saying that JSA and admin costs would 'go back into the pot', but there would be no NI payments from anyone, working or not."

What I was reporting back on Ana, was that there would be no connexion between NI and the citizen/basic income. Everyone would get the same amount and NI, if the government chose to keep it would be exactly what it is now, another part of the tax system. I have a personal view on how it should be treated but if I go into that it would probably just add more confusion. Just remember that NI is only another part of the tax system and you could either be honest about the overall tax, setting it at the tax + NI amount, or carry on using it as an additional tax.

"If this were to be only a 'partial' basic income, how would it be topped up if people are unable or unwilling to work? There would still have to be state support in some form, but paid for how?"

There would be still be a benefits system while it was a 'partial' system but the costliest benefits must be those that pay the least. A country may decide not to take it to a total basic income so benefits would continue but a lot of people would be lifted out simply because it would become easier for them to work. A small amount of money that is paid on an unconditional basis can help people stay in a flexible hours job if that is what is available or what they choose. They could work more hours without fear of loosing this money. It can enable people to travel to a job, it could help with childcare, it might enable someone to train for a better job or do a less will paid job (caring, teaching) that they could not afford before. All these are choices people have made when trails have taken place.

We have falling tax revenue currently and if people lose jobs because of the progress in technology it will fall even more. This could start to bring it back up.

I am not advocating this system Ana, although it seems so far to have a lot of plusses in my opinion. I/we are really just finding out about it.

x post Jen.

Imagine how much better it could be if we didn't have to pay companies like G4S to mess up the system.
Imagine how much better it would be if people didn't feel like they were treated like dirt for needing to claim enough money to live on, and having to prove they are looking for work.
As I said earlier, most people want to work. That's what the trial in Finland is relying on.

Quite, durhamjen

I too believe that most people want to work. But work still has to pay; for many it doesn't, at the moment.

An interesting blog on UBI

It's being discussed at Davos, too.

www.weforum.org/agenda/2017/01/why-we-should-all-have-a-basic-income

Of course, we probably won't be told what they decide.

They would probably have to kill us if they did tell us Jen . That is a really good, if US biased, description of how it works and why it doesn't cost as much as many would assume and some of the unexpected positive effects.

Hadn't thought of that, Gracesgran.
Better just hope they don't tell us; just look for the extra $1000 per month in our bank accounts.

Guy Standing from BIEN is giving a talk at Davos about universal income.

www.weforum.org/agenda/2016/12/the-precariat-populism-and-robots-is-basic-income-a-political-imperative

I doubt very much whether you would get an extra $1000. If the system really were to be rolled out to all citizens, the basic state pension would have to be factored into the costs. You would probably find that the UBI would replace the state pension, although people would be free to contribute towards an additional pension.

That was just the example given from the first Davos link, daphne.
Even Richard Murphy only suggests £16,000 for an adult, or £300 a week, the sort of level needed to alleviate poverty.

Finland is starting a trial this month. www.bbc.co.uk/news/world-europe-38593513

It will be interesting to see how the experiment in Finland works out. Only unemployed people of working age have been chosen for the experiment and it pays approximately the same amount as unemployment benefit (so nowhere near £300pw). It will be interesting to see how the costs can be sustained five years down the line, when some of the unemployed will have found work but still keep their UBI. Housing benefit will still need to be paid.

We were told (hmm) that the original intention of Universal Credit in the UK was to stop the 'cliff edges' which happen when people move in and out of insecure work. UBI would also stop the cliff edges, because people would keep what they earn rather than being penalised for a few hours of temporary work.

I have long argued that JSA and ESA should be merged, while keeping PIP, which would mean that people not well enough to do a full-time job could do a few hours without losing all sorts of other benefits. Rather than a race to the bottom, I would want to see all unemployed people paid the ESA rate. I haven't done the sums, but I know many billions could be saved on assessments and 'courses', which could be paid instead directly to claimants. UBI could be part of that.

If UBI is introduced in the UK, I guess tax credits would stop, so some kind of transition arrangements would need to be made so that people don't lose out in the early years. Over a lifetime, 70% of people in the UK take more from the state than they pay, once family allowance/child benefit received as a child, state pension and any tax credits or other benefits are taken into account. The question really is whether this amount should be paid as a lifetime allowance, which would mean people would have to save for the hard times or paid out when needed, which involves the expense and hassle of means testing. JobCentre staff could even be retrained to do what they were originally supposed to do - help people find work.

Are robots good or bad?
Eu is looking at universal income because of robots taking our jobs.

basicincome.org/news/2017/01/european-parliament-report-robots-artificial-intelligence-basic-income/

I read an article claiming that Amazon's flying warehouse will only need three members of staff.

Basic income hasn't been forgotten about. Various bits of research going on all over the world. It just takes a while to get results.

theconversation.com/how-a-basic-income-could-help-build-community-in-an-age-of-individualism-74125