Universal Income.

lionking said:
Again utter nonsense.

The Age Pension in Australia is a “Universal Benefit” but you can’t get it if you earn over a certain amount.

Oh, you can claim it but you won’t get it.

Do you realise how ridiculous you sound?
Click to expand...

Do you realise how ridiculous you sound? I've explained how it works over and over again and you still insist on not understanding.

You can claim Child Benefit and you will get it (as long as you have a child or children, of course). If you earn more than £50,000 a year your income tax will go up by a bit. If you earn more than £60,000 a year your income tax will go up by an amount that equals the amount of Child Benefit.

But you still receive the Child Benefit! It appears in your bank account every two weeks. (Often, it tends to be the mother who receives the Child Benefit, and the father who pays the tax, so for some couples where the father earns more than £60,000 and the mother doesn't, effectively it's a way that the father transfers money to the mother.)

All of this was brought up because psionl0 insists that Universal Basic Income could be structured in some way so that people earning above a certain amount won't benefit from it, although as it's a universal benefit, everyone will receive it. He keeps saying this would be done by the tax system, but he hasn't really explained the nitty gritty of how this would work, and the way Child Benefit works in the UK seems to be the only way I could think of that would explain it.

But if there's another way it could work where everyone gets a UBI but people above a certain income don't benefit from it, I'd love to hear it. Regardless of how it would work, it would seem to end up having pretty much the same outcome.

(My own view is that this isn't how UBI would work, but I'm not the one proposing that, psionl0 is, so you'll have to ask him.)
 
Belz... said:
Universal for parents only.
Click to expand...

Yes, as I pointed out in the sentence you just quoted. You DO have to have a child to receive Child Benefit. I would have thought this didn't need explaining, but perhaps it does. It's not strictly "universal", in that everyone in the universe doesn't receive it. It only applies to people who have children. And, of course, it only applies in the UK, not every country in the universe. Are there any other qualifications I need to add? Please feel free to add your own if necessary.
 
Matthew Best said:
That's correct. Child Benefit is a universal benefit, as I've been saying from the start. The only qualification is that you have to be the parent or guardian of a child. Your income doesn't affect your ability to claim it.
Click to expand...
It was the "most people who earn more than £60,000 don't bother to claim it" bit that confused me. Obviously if they are paying more tax then they would want to offset it by the Child Benefit.
 
psionl0 said:
It was the "most people who earn more than £60,000 don't bother to claim it" bit that confused me. Obviously if they are paying more tax then they would want to offset it by the Child Benefit.
Click to expand...

Its a stupid system but it is as Matthew described.

Basically if you are a high earner you can claim it and pay it back at the end of the tax year, or you can not claim it.

Its actually even more complicated because if you are in a couple then the person receiving it might not be the person taxed to recoup it. it only needs one high earner in the couple. Note - not combined earnings but only if one of you individually crosses the threshold!

Its not joined up at all because the Child Benefit and Tax people are separate - I've only just received a tax demand for Child Benefit I received in 2017 - so the benefits people wont or cant stop you claiming it no matter your income. Its then down to you to declare you got the benefit to the tax office so they can bill you for it to pay it back.
 
Archie Gemmill Goal said:
Its actually even more complicated because if you are in a couple then the person receiving it might not be the person taxed to recoup it. it only needs one high earner in the couple. Note - not combined earnings but only if one of you individually crosses the threshold!
Click to expand...

Yes, this is a particularly stupid aspect of it.

If you're in a couple where one of you makes £60,000 and the other makes nothing, then you pay all your Child Benefit back in income tax (the correct term is "High Income Child Benefit Tax Charge").

But if you're in a couple where both couples make £49,000 (thus a total of £98,000) you get to keep all your Child Benefit.

I believe the rationale for this was to make it simple and thus cheap to administer, but it still seems ludicrous.
 
Matthew Best said:
Yes, as I pointed out in the sentence you just quoted. You DO have to have a child to receive Child Benefit. I would have thought this didn't need explaining, but perhaps it does. It's not strictly "universal", in that everyone in the universe doesn't receive it. It only applies to people who have children. And, of course, it only applies in the UK, not every country in the universe. Are there any other qualifications I need to add? Please feel free to add your own if necessary.
Click to expand...

Right, so it's not universal. That's my point.
 
Matthew Best said:
It's the other way round. They only pay more tax if they claim the benefit.
Click to expand...
I guess the UBI equivalent would be a wage earner choosing whether to claim the UBI as a tax rebate at tax time or receiving the UBI and not claiming the UBI rebate at tax time. If they chose the rebate option then less tax would be docked from their pay they end up with the same after tax amount of money either way.

I suspect that doing UBI this way would be more administratively expensive. For example, if you lost your job then you would have to apply to have the UBI deposited into your bank account instead of being deducted from your tax. Administrators would need to keep accurate records of which tax payers get UBI deposited into their bank account and it could be particularly cumbersome if some tax payers only got a partial UBI deposited into their account (for example, they got a $500 tax rebate each month and the other $500 deposited into their account).
 
Belz... said:
Right, so it's not universal. That's my point.
Click to expand...

And my point was that this seemed to be a way of paying out a benefit that, while paid to everybody, only actually financially benefits people on lower incomes. Which would seem to be a way of lowering the cost of instituting a UBI, because if you pay absolutely everybody a basic income, including people who are high earners, then it seems like it might end up being prohibitively expensive. I'd be disappointed, because I'd rather like an extra £1,000 a month or whatever, but I guess I can understand why giving it to me might not be a priority while giving it to someone working a minimum wage job might be.
 
Matthew Best said:
Which would seem to be a way of lowering the cost of instituting a UBI, because if you pay absolutely everybody a basic income, including people who are high earners, then it seems like it might end up being prohibitively expensive.
Click to expand...
What part of my post didn't you understand? Slugging somebody an extra £1,000 in taxes (because they get £1,000 of UBI) doesn't cost anything. It is just a change in the tax scales.
 
psionl0 said:
What part of my post didn't you understand? Slugging somebody an extra £1,000 in taxes (because they get £1,000 of UBI) doesn't cost anything. It is just a change in the tax scales.
Click to expand...

So where are you setting the “too rich for UBI” line?

And of course a UBI would cost much more. People below your “too rich” line would get more income than now, unless your UBI is less than current benefits. This has to be paid for by higher taxes overall, or unsustainable deficits.
 
lionking said:
So where are you setting the “too rich for UBI” line?

And of course a UBI would cost much more. People below your “too rich” line would get more income than now, unless your UBI is less than current benefits. This has to be paid for by higher taxes overall, or unsustainable deficits.
Click to expand...
Again you have ignored every single word posted about UBI.

According to you everybody gets either a wage or welfare so switching from welfare to UBI should cost nothing.
 
psionl0 said:
Again you have ignored every single word posted about UBI.

According to you everybody gets either a wage or welfare so switching from welfare to UBI should cost nothing.
Click to expand...

According to you we are going to overhaul the entire system so nobody can be any better off at the end of it because everyone is just going to get what they get now.

And then you wonder why people are confused??
 
psionl0 said:
What part of my post didn't you understand? Slugging somebody an extra £1,000 in taxes (because they get £1,000 of UBI) doesn't cost anything. It is just a change in the tax scales.
Click to expand...

Yes, that's exactly what I was saying.

If you do it in the way that the UK does Child Benefit, it's not going to be as expensive as if you do it the way the current tax system works (which is that extra income gets taxed at your marginal tax rate).
 
Just "changing the tax scales" isn't going to work in the way you suggest, I don't think. You'd have to completely overhaul the tax system to make an extra £12,000 a year of income for high earners lead to an extra £12,000 a year of income tax.
 
Matthew Best said:
Yes, that's exactly what I was saying.

If you do it in the way that the UK does Child Benefit, it's not going to be as expensive as if you do it the way the current tax system works (which is that extra income gets taxed at your marginal tax rate).
Click to expand...
Why would it be cheaper to assess how much money to deposit into each individual's bank account than to just deposit the UBI into everybody's bank account?

Matthew Best said:
Just "changing the tax scales" isn't going to work in the way you suggest, I don't think. You'd have to completely overhaul the tax system to make an extra £12,000 a year of income for high earners lead to an extra £12,000 a year of income tax.
Click to expand...
Who is proposing a 100% marginal tax rate?
 
Last edited:
Matthew Best said:
Just "changing the tax scales" isn't going to work in the way you suggest, I don't think. You'd have to completely overhaul the tax system to make an extra £12,000 a year of income for high earners lead to an extra £12,000 a year of income tax.
Click to expand...

Probably time for a worked example?

If we take 4 people one on benefits (10k a year) one working (25k a year) one a high earner (60k a year) and one rich (1m a year)

Lets take some tax bands - up to 10k 0%, up to 20k 10%, up to 50k 25%, over 50k 40%

Based on this ....

Person on benefits earns 10k and takes home 10k
Person on 25k is taxed 2.25k and takes home 22.75k
Person on 60k is taxed 12.5k and takes home 47.5k
Person on 1m is taxed 388.5k and takes home 611.5k

(I think those numbers are right. Let's call this the status quo)

Now if we introduce 10k of UBI to replace welfare.

Person on benefits still get 10k and pays no tax.

Person 2 now has 35k earnings. He should pay an extra 2.5k in tax so he's 7.5k better off.

Person 3 now has 70k in earnings. He should pay an extra 4k in tax. So he's gained 6k.

Person 4 now has 1m 10k in earnings and is also 6k better off.

Presumably we don't want Person 4 being 6k better off. Or even person 3. Or according to psion person 2 either. How are we proposing fiddling with the tax rates to balance this out?
 
You must log in or register to reply here.

Back
Top Bottom