To think a basic income/citizens wage is a blinding idea?

[Littlefluffyclouds81]

For anyone unfamiliar with the concept, the idea is that each adult citizen, regardless of their working status, money in the bank etc, gets a basic amount of money for free, each month, for example £1000.

Sounds a bit nuts, but bear with me.

The benefits would be that everyone, whether they are homeless, or whatever, knows they have the security of this money coming in each month. There are no costly administrative procedures in determining whether someone is eligible for benefits, or sanctions for those who break the rules.

But, surely everyone will just sit on their arses and not work? Well no, because actually most people have an innate desire to be successful and do well, and let's face it no one is going to be living the high life on a grand a month. It would actually get people out of the benefits trap, because as it stands people are hesitant to come of benefits because if the job doesn't work out, they have to start their claim all over again, or they might have worked out that they would be hardly anything better off by working, so it's not really worth it. With a basic income, they could work as much as they liked knowing that they will still have this money behind them.

So how will it be paid for? Once you have removed the humongous costs of means-testing benefits, and assessing fitness for work with disability benefits, and all that, well that's the government a good few quid up, right there. Also bear in mind that the fund currently used to pay benefits would just be transferred to pay basic income. Raise corporation tax which the coalition sneaked down, and maybe a little bit more tax for the very highest earners, and that's job done.

The theory is, that as it stands, a lot of people have nothing. They are scraping by on the bare minimum of benefits, living in fear of sanctions and being forced into work fare. This way, people would have options, they would all of a sudden have opportunities in front of them to do courses, move to better accommodation, or whatever they needed. It would give people hope. The stigma of being 'on benefits' would be gone, as it would be universalistic. Equality would be massively improved, and with it so would would wellbeing, and health, which would also save the government millions.

I realise with the latest turn of political events there is approximately no chance of this happening, but I think it makes a bucket load of sense.

Sorry, I've just realise the figures I gave for poverty-line income of 5K per adult and 3K per child are after housing costs. So they would need to be uprated by an amount for housing, if we are to get rid of housing benefit.

Some interesting arguments - and to the poster upthread who asked how it would reduce inequality - well because as it stands around 20% of benefits which should be claimed are not being claimed, these people would be in a much better place with universalistic benefits. Those at the top with high earnings would still get it but pay more tax so effectively have it taken away again, but I don't think they'd really miss it.

Once upon a time (pre 1948) I'm sure the suggestion of free health care for all would have seemed like a crazy idea to many, and similar arguments would have been raised. How on earth can the nation afford to do that? What's the point in giving people who can afford to pay for it free health care? But, I think most people can accept now that it worked.

As for the posters saying they would stop working if they had £1000 a month - that may not turn out quite like you'd hoped. My money coming in as a single parent is three times that and I wouldn't say I'm loaded, I still have to be quite careful with money. You could get by and have enough money to be able to eat well and pay your bills, but there wouldn't be anything left over for much else on £1000 a month.

Also I made up the figure £1000 (obviously). It could be £700, or £800, somebody better at sums than me would have to work that bit out ??

People with serious disabilities who need carers etc. could not live on £1,000 a month.

I think this sounds like a great idea to people who don't need the £1,000 and can't imagine why anyone else would need more.

After a quick google, I reckon add another 2.5K per person for housing. (Nationwide average rent for three-bedroom away from a city centre, £843 per month, time 12 months and divided by four people to get 2.5K per person.)

So citizens income of 5.5K per child up to 14 and 7.5K for anyone over 14.

Thanks Theoritician. I knew somebody good at sums would come along

It's been a really interesting topic to me, fluffy. I remember similar debates in college!

I'm disabled and at that amount I would be seeing a serious drop in income, which would definitely make life a lot harder. I think you still need to take into consideration things like children and disability.

£1000 a month is more than full time on minimum wage. So why would you choose to work 40 hours a week if you could get more than you do now, whilst staying at home?

So my suggestion is that this person would get £625 per month basic income. If they earned an extra £1000 a month, say £450 would be deducted in tax, and they would take home £550, bringing their income up to £1175. I think the difference between an income of £650 and £1175 would be worth working for? (And note that they are now only receiving £175 net from the state. So the subsidies quickly disappear, if people work.)

Something similar is being proposed here in Spain. 750 euros per adult plus 250 euros per child. So my family would be paid 2,000 euros for doing nothing!

I tell you that the whole of Spain, especially in Andalucia would stop working! I know I would. Same if it happened in the UK, my DP and I would retire at age 35 and live quite happily on £2k per month.

As long as you own your own home and dont have a mortgage then a family can live very well on that. No way I am spending all my days in a boring office when I can be sat on the beach playing with the kids every day

Another who doesn't see how this could do anything except create inflation.

I think it'd have to be banded for different parts of the country if you're going to look at it from a housing POV.

For instance, I live in a 3 bed semi with large garden and garage in the E. Mids. A family of four could live here comfortably, so by your maths Theoretician we'd be getting 26K per year. Our mortgage is only 6K, so compared to families living anywhere in the south we'd essentially be getting a location-based bonus. I'm not knocking your point at all, just saying it's something else to consider if this is about striving for equality.

Personally I think it could work if the only qualifying criteria for a citizen's income would be turning 18 or becoming a parent - whichever happens first. Prior to that every child should continue to receive CB.

There is a big question mark over people who have additional needs such as adapted housing and carers, but really I don't think the person with those needs should be paying for them out of their citizen's income, otherwise that's like a tax on disability. Under a system such as this I'd have thought the carer should receive their CI and also a payment for working as a carer from their local authority.

756 Billion is how much it would cost per year based on the population of The UK. In 2013 550 Billion total tax revenue was generated.

Not to mention people on the whole would pay less tax. Be it by going part time or retiring early.

It's a bit like communism, good in theory but not in reality.

www.citizensincome.org/FAQs.htm

This link answers a lot of the questions and concerns people have raised (far better than I could). Including people with disabilities receiving a supplement.

My ds receives 5.4K per year in disability benefits. He would be 5.4K worse off than other children the same age. How can that be reducing inequality?

This concept was the nail in the coffin for any potential Green vote from me. It's bonkers, for all the reasons cited above.

Seems pretty daft to me. I would continue working for 3-4 years till my mortgage was paid off, then I would go part time till the kids are grown up, then I'd retire around 50. And I'm in a well paid job that I love. And then where would the taxes come from to pay for this?
A lot of my friends in their early 40s would do the same, it's the kind of age where you have worked for 20 years+ and start appreciating that life is not all about work, you want to spend more time with the children or doing stuff for yourself. Employers would have to increase wages to keep people in work and that will just drive inflation up.

I can't see any winners here apart from the work-shy who wouldn't get a job anyway and would have free money coming in.

How would he be 5.4k worse off lambsie?

He would be on exactly the same income as every other child the same age, before parental salaries on top of the citizens' income were taking into account.

If you are telling us that he has fixed and unavoidable expenses of 5.4k per annum due to his disability that had to be paid for out of his 12k, then he'd be 5.4k worse off, but not otherwise.

I think it's an interesting idea but it will never take off, because those at the top would lose the ability to Look Down On The Poor. Imagine not being able to judge people daily, sneer at them, blame them.

No complicated means-testing, no "Officials" to make decisions about people's lives based on zero compassion.

The Have's would no longer have the Have Not's to make them feel smug.

Unworkable.

ItsRainingInBaltimore - That's what DLA is for. The unavoidable expenses of being disabled.

It's such a disappointment, but Mengog is right - my calculations show that it would cost the country around £750bn to implement (I'm a tax adviser to governments, so do understand how the numbers would go together). And that's not assuming any top ups for people with disabilities.

Very roughly, the country spends around £250bn on welfare, including pensions (it depends a bit on how you classify managed expenditure, but it's in the ball park). So you've overnight added another £500bn per annum to public expenditure. Half a trillion pounds.

And we'd still need the non-welfare parts of the budget - health, education defence, etc etc - those collectively add up to another £600bn.

So you've just set our public expenditure to £1.35 trillion per annum.

Tax receipts are around £650 bn per annum (Mengog - I've added in local government receipts).

So how are you going to fund the shortfall of £700bn per annum?

To put it into perspective - corporation tax is around £40bn per annum. Even increasing it tenfold wouldn't pay the bill (and companies would leave the UK).

Income tax receipts are around £150bn. But, 1/3rd of this - £50bn - is paid by the top 1% of earners. Even if you doubled their tax - so that every penny they earned was paid over in tax - it would only raise £50bn.

Put in the basic rate of income tax? It raises around £5bn per 1p increase - so even raising the BR from 20% to 40% would only raise £50bn. You simply couldn't fund this proposal through BR income tax raises.

Put up VAT? A 1% raise in VAT raises around £4bn. So the VAT rate would need to rise from 20% to 195% to pay for your proposal.

It's just not achievable. I wish it were. But it isn't.

FWIW, the green party manifesto promises, like the SNP manifesto promises, are basically uncosted. They clearly don't add up. Cynics might think they simply published what they thought the public wanted to see.

I'd love to see this happen. I think it's a brilliant idea.

I came on to say what worksallhours said, but not as eloquently.

YABU

Cinnabar. The argument being used here in Spain is that there would be one rate of income tax - 50%

So each family gets there say £2k per month and then all other income from jobs, investments, BTLs, savings etc is taxed at 50%

So tax revenues increase, but of course there is a massive disincentive to work - which is the whole problem with the idea

People who like the idea forget that most people dont enjoy their jobs and wouldnt work if they didnt have to. I know I wouldnt, there is so much more to life!

i realise that lambsie but i think you phrased it in a slightly odd and misleading way!

An unexpected number of people promptly decided they would accept a lower standard of living, in exchange for more leisure time.

Of course they would! If you were in a low-paid, low status job and suddenly you got £1000 a month to sit at home and do nothing, would you still go to work? Of course you bloody wouldn't!

The concept of a citizens income completely disregards the reality of the price mechanism.

Yup - this too.

The idea has legs, but like every good idea the reality is not as straightforward as the theory.

Like most of The Green Party's ideas.