Universal Income.

JoeMorgue said:
//Tangentially related and not worth a separate thread//

How Much Money Is 'Enough'? This Simple Thought Experiment Gives You an Exact Number to Aim For



Article: https://www.inc.com/jessica-stillma...-exact-number-to-aim-for.html?utm_source=digg
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I suspect that the "winner" would be determined not by how much is actually enough, but by whoever is least informed about finance. For example, it used to be true that you could get a million quid, stick it in a bank, and live off the interest for the rest of your life (with the assumption that the interest rates would remain roughly the same).

For example, throughout the 80s, interest on savings fluctuated between about 10% and 15%. That's not true any more. 0.4% is seen as a good rate of interest. So rather than getting £100,000-150,000 a year, you'd be getting £4,000.

But I'd bet that at least one person out of the 5 had heard the whole "put it in a bank and live off the interest" thing and would say a million.

I mean, you could live off a million if you invested wisely, but learning to do so and then putting in the time and effort probably doesn't count as never working again.
 
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Archie Gemmill Goal said:
it can either be taxable or non-taxable income and the tax rates would reflect that. Obviously if it was non-taxable income it wouldn't be taxed but you would pay a greater % tax on your income than if it was considered taxable income to get the same net effect.
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Not necessarily. The population as a whole would pay more in tax in order to offset the net effect, but that doesn't mean that someone on £4,000 a year (£5,000 including the UBI) would. And how much you get taxed would not be dependent on how much UBI you get. If you lose your job in the middle of the tax year, as per your example, the subsequent income you continue to get from UBI would not affect the amount you're taxed.

Well the specifics kind of matter.
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With the greatest will in the world, the specifics are being pulled out of people's nether regions. None of the figures being bandied about have any connection whatsoever to reality.
 
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psionl0 said:
The money for this would have to come from somewhere (possibly increasing the marginal rate to 37c or more for people earning more than $45,000).
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That's the rub isn't it? At least you are now clear that UBI means tax rises. Have you thought about the scope of those given my rough estimate of costs above? Or did you have any major objections to those cost estimates?
 
Squeegee Beckenheim said:
Not necessarily. The population as a whole would pay more in tax in order to offset the net effect, but that doesn't mean that someone on £4,000 a year (£5,000 including the UBI) would. And how much you get taxed would not be dependent on how much UBI you get. If you lose your job in the middle of the tax year, as per your example, the subsequent income you continue to get from UBI would not affect the amount you're taxed.
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Sorry my point was just that if you earn £10k and get taxed 25% then if you took the UBI as taxable income then obviously the tax rate would only be 12.5% to recoup the same amount.

In the specific example we were talking about here I was working on the assumption (as had been suggested by at least some of those proposing UBI)
that anyone earning over X amount would pay back the full amount of UBI.

If you aren't bothered with that in this case, then yes the system would be different.

With the greatest will in the world, the specifics are being pulled out of people's nether regions. None of the figures being bandied about have any connection whatsoever to reality.
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Actually the figures I bandied around did have a connection to reality. They weren't accurate but they give ball-park estimates of the magnitude of costs being talked about. That's why I took the time to check things like the DWP budget, number of basic rate UK taxpayers, current UK income tax take etc.

As I said at the start I am not strongly for or against UBI but I'm somewhat suspicious of it.

Of course there are a million variants of the system that could be run but looking at my rough analysis it seems like you either give everyone a small amount which doesn't allow you to do away with existing welfare systems or you give everyone a substantial amount which is either prohibitively expensive or is going to need some serious rejigging of the tax system in ways that I am not sure I am comfortable with.

It's kind of annoying when you try to actually look at the reality of things and get accused (not by you i dont think to be fair) of just not understanding and being tied to the welfare system and yet don't get any alternative answers presented.
 
Archie Gemmill Goal said:
That's the rub isn't it? At least you are now clear that UBI means tax rises. Have you thought about the scope of those given my rough estimate of costs above? Or did you have any major objections to those cost estimates?
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I never said that some magic money tree would rain down cash on the poor and leave the rich unaffected. If some people get more money then others would have to get less - either they pay more taxes or the government cuts spending in other areas (increases in productivity or reductions in welfare bureaucracy not withstanding).

Your problem is that you never acknowledge this overall view. You just take out of context snips of what I have posted and say "gotcha".
 
Archie Gemmill Goal said:
In the specific example we were talking about here I was working on the assumption (as had been suggested by at least some of those proposing UBI)
that anyone earning over X amount would pay back the full amount of UBI.
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Anybody earning over x amount would pay back the full amount. But not because the UBI is taxable, but because their earnings from other sources are. Similarly, anybody paying over y amount would pay back more than they get from UBI.

Actually the figures I bandied around did have a connection to reality. They weren't accurate but they give ball-park estimates of the magnitude of costs being talked about. That's why I took the time to check things like the DWP budget, number of basic rate UK taxpayers, current UK income tax take etc.
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It's still making up a specific UBI proposal, when the truth is that we don't know what an actual proposal might look like. Everybody can come up with their own proposal and insist that it's the correct one, but little productive is likely to come from that, especially given that economics is a complicated and sometimes counter-intuitive subject, and saying "it will cost x amount and will therefore require an income tax rise of y amount, which will pay for it directly" is overly simplistic to the point of frivolity.

There's certainly no point in getting down and debating the exact tax rise needed in which precise brackets to the nearest 0.01 of a percent. The best you can really do is to say "yes, this is one possible way that it could be funded, although the reality will likely be a lot different and a lot more complicated".
 
Archie Gemmill Goal said:
What savings on welfare?

Nobody has proposed anyone getting any less than they get now.
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The costs of administering the current welfare (and benefits) system are considerable.

If UBI replaces the welfare and benefits system and literally every legal resident is eligible then the administration costs of the plethora of existing benefits should be reduced considerably.

The welfare savings could come from reductions in the cost of the welfare system, not by reducing welfare payments to recipients. It's been decades since I worked on DHSS (as it was then) systems but a lot of administrative time and effort went into determining eligibility for benefits such as Attendance Allowance (and the subsequent challenges, appeals and re-assessment).

Of course a reduction in administrative effort brings its own issues - thousands of people could find themselves without jobs but that's not a good reason to maintain the status quo IMO.
 
The UK Liberal Democrats seem to be supporting UBI as a matter of party policy.

Here is a discussion about the outcomes of their potential policies, which range from a £45 a week UBI to £95 per week, funded partly by a reduction in tax-free allowances (though there would still be costs to pay from somewhere, which they haven't clarified). The policy would not replace or change existing benefits, but UBI would be treated as income when means-testing benefits.

It's estimated that, even at just £45 a week, poverty would be reduced by 17% and deep poverty by 50%, and inequality would also be reduced.

https://www.ubicenter.org/lib-dem-policy-paper
 
Orphia Nay said:
This made today's news on ABC Australia.

"Tomorrow a conference [in Australia] called Basic Income after COVID-19 — Social Security, Work and Wealth will discuss the concept of giving a living wage to everyone who needs it."

Basic income is considered a radical idea. But in 2020 we lived it and some people want it back
https://www.abc.net.au/news/2021-12-09/basic-income-push-in-australia-after-covid-welfare/100681912
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From the link...

"This idea that if you just give people money, people do nothing, actually wasn't the case at all," she says. People are extremely busy, extremely productive. And we saw that with this natural experiment from the federal government that acted like a basic income."

"People used the money. They didn't have to ration food, ration medicine, they're able to afford accommodation"​

Exactly! When people spend money, the whole economy booms. Businesses do well. This is very likely one of the key reasons why the NZ economy rebounded so quickly after the Covid lockdown. The government paid most businesses enough so that they could keep paying their staff, so there was little or no long term contraction of the economy.
 
Yep.

On the TV news piece, the article author gave us some numbers.

The current amount spent on welfare is 200 billion, about a third of the total Australian budget. To implement the basic income would be an extra 20 billion. Social assistance groups said that this money normally went to them, but they recommend the basic income.
 
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