Scrap Benefits and pay every adult, working, non working or retired, an unconditional basic income of £15,000 a year? Discuss

[CorruptBstard]

Hi

Ok Mumsnet, what do you think of this?

Pay every adult in the uk £15,000 a year, with no conditions attached, so that every adult is free to use their time to do stuff, just for the love of it.

This basic income would cover basic needs for food and shelter, if people wanted to earn more money they could go and work for someone else or start a business of their own

This would abolish poverty in one fell swoop.

Wheres the money coming from to pay for it?

well apart from scrapping all "state benefits", we could also scrap income tax and fund it all by taxing money every time its spent.

ie Government gives me £5. I pass that £5 round a group of 10 friends. By the time the £5 comes back to me, it has been "spent" 10 times. Creating a turnover of £50. If the government taxes that spending at 20%, it raises £10 in tax. Making a profit of £5.

Thoughts?

If you recieved £15,000 a year unconditionally, what would you do just for the love of it?

niceguy - if it was just £10k and we removed all tax allowances, raised a flat income and capital gains tax of 35% on individuals and firms and scrapped all benefits except free NHS and education that surely does the job?

corruptbastard - QE involves buying low risk assets. we havent given away the money to the banks, we have put more cash in the system and bought their assests.

its not the same as giving away money to individuals.

more beta - so would you tax company profits at 35%, then dividends at 35%?

so i pay 70% tax. no thank you!

Tilly - no profits would not be taxed twice. Just ensure they at least get taxed once which is not always the case now.

I would get rid of all the Film Schemes and other special investment schemes that people on an ordinary income cannot access and ar enothing to do with people building their own businesses.

It wouldn't even come close MoreBeta.

Mnhq has copyright on posts here. You've lifted my post, and wilfully misinterpreted it. I suggest you remove it.

Your still not really understanding basic taxation are you CorruptBstard.

Full marks for effort and rather blatant attempt to build your blog, but I don't think Robert Peston has much to worry about.

@CorruptBstard

fair point. i am really interested in peoples opinions though. maybe i should delete this post and post again without the link?

We don't often do this but we will remove the link to your blog for your OP as we really don't like removing the OP of a thread. We have also deleted the other posts which contained links to your blog - as we don't allow this.
Thanks
MNHQ

You're

Mnha. No worries, interesting experience this has been. Thanks

So many responses, both critical and positive, and I?m trying my best to respond to all of them, but the 2 main critisisms that seem to be repeatedly posted are

1. VAT does not work in the same way as a Sales Tax would
2. Giving People an Unconditional Basic Income would cause Rampant Inflation

Here are my responses to these Critisisms

1. VAT is a tax that is charged on the ?Sales Price? of a limited amount of products. If you are not VAT registered, then you cannot reclaim the VAT you pay on any product that you buy. Therefore the VAT you pay on that product you buy (i.e the SALE that has been made) is collected as TAX. Therefore VAT is a SALES TAX.

The reason VAT has been mentioned is that someone suggested that collecting tax on all sales would make the money eventually disappear out of the system. ie pay £5 for something, £1 goes in tax, leaving £4 to the seller. The seller then spends £4 on something, £0.80 goes in tax, leaving the new seller with £3.20. After 2 transactions, £5 has diminished to £3.20 because £1.80 has been taken by the tax man. However, this is how VAT already works at the moment, and the money does not dissapear, so why would it with a full sales tax? Also, under my proposal, the money collected by the Sales Tax, is put back into peoples pockets as Basic Income, giving them new money to spend, to replace the money being taken out of the system, by the tax man.

1. ?Quantative Easing?, which is printing money from thin air and putting it into the system, has not caused Rampant Inflation. ?Bailing Out The Banks? which is also printing money from thin air and putting it into the system, has not caused Rampant Inflation.

So far both these measures have ?Cost? £350 Billion. Paying every adult an Unconditional Basic Income of £15,000 would ?Cost? £750 Billion. Ok this is double as much, but hardly a Rampant Increase. Also, someone said, Landlords and Utility companies would know people had this income and would increase their prices to get this money off people. The national average wage is £26,000. The Basic Income I am proposing is only £15,000. Its way less than the national average as it already exists. Why arent they already increasing prices to get our £26,000 off us? Finally, the Unconditional Basic Income is Index Linked to Inflation. Free Market Equilibrium would prevail eventually anyway.

Except to say that the £350 billion quantative easing has happened relatively gradually since 2008. You are talking about pritning more than double that amount each and every year.

Furthermore, we have had higher than expected inflation - as much as 5% per annum in a time of financial contraction. The big fear at the time was of deflation and QE has certainly been succesful in preventing that. Under normal economic conditions, i.e. without a deflationary threat, inflation would be rampant.

This will have an effect on the value of money.

FAO: AMBERLEAF. I put your question to the basic income community and this is the best reply I got. It's from someone else, not me, but I agree with everything she says.

I think that it is underestimated the transformative impact of a universal livable income, it is a transition to a more community minded society because it would allow us to redefine work to something like "only that work will be called productive that really produces, maintains and enhances life" (Mies and Bennholdt-Thomsen in The Subsistence Perspective). So all the unnecessary and wasteful jobs for jobs sake would no longer be using up all our time and resources and that time and resources could be used instead on necessary things, like improving life for people with disabilities for example.

Given that the number 1 impact on health is poverty (The Spirit Level and Richard Wilkinson's other books go into social determinants of health at length) and given that the biggest public expense currently is health, then a basic income could be thought of firstly as a health initiative.

And by doing away with other benefits and rolling them into a basic income, does not mean we are doing away with health services. What she needs is extra help because someone in her family has a health concern, they have a disability, this would be a health service and there would be vastly more resources for health services since public health in general would improve under a universal income.

The Manitoba Mincome data from the experiment where a whole town got a guaranteed income for 3 years showed fewer hospital visits and more teens staying in school instead of leaving school for work, so since public health in general will improve, that means resources can be put towards other essential health concerns.

I became an advocate of guaranteed income when I was a single mother of 3 on a very low income. My best friend had 3 boys and the oldest had cerebral palsy and she was low income too. She did have a caregiver come and help him a few times a week paid by the government under a health program. She did need extra help, but the main thing that both of us noticed in our sleep-deprived state of permanent exhaustion, was that our friends and family were not available to help us because they all were too busy working. And when you would try to use some kind of moral pressure to try to get more help, any mention of work would trump any peer pressure or moral pressure. 'well I can't help you tomorrow because I'm working" means you give up and don't bother asking them for help.

Currently the job trumps everything. In families who need eldercare, it is often the sibling with the fewest paid work obligations who is expected to do the most unpaid family care. With more people having more time, then more people can share in doing the care work and community volunteer work.

I just wrote an article where I wrote about my friend and her son now that he is a young adult with a disability and he is so isolated because no one has any time to spend with him.... because they are all working. Here is the article: Time to Change to World

www.livableincome.org/atimetochange.htm

For a short time in BC in the 90s they had changed the welfare rules so that single mothers on welfare didn't have to look for work until their youngest was 12 years old. And single mother volunteers flooded into all kinds of community initiatives and started all kinds of programs.

I think people, especially parents, would quickly organize things when needs emerge. That's my argument in the Time To Change article, that we would have time to organize and respond to things.. and that is where the main transformation of society would come from: time.

Time freed from useless make-work jobs that make everyone miserable, could be put towards those things that improve and enhance life.

What many people need to make their lives easier is other people's time. People would need care and provide unpaid care, currently get isolated by the commodifcation of time in the market system. All that would change when we get a universal income.

Hope this helps. Most of it is in the Time article, and you can also go to the Health section of the website too: www.livableincome.org/health.htm

and for the Manitoba Mincome data see the report: The Town With No Poverty www.livableincome.org/reports.htm

Hope this helps in your great Transformation work you are doing!

Cynthia

My dh earns a silly amount. If you gave us an extra 30k that would be wrong and we would not spend more, it would go to our dcs future, college or property owning, maybe a fancy wedding. Maybe one each dd1 could go to college, dd2 could have a nice wedding, we could buy ds a flat.

Stupid idea. Count me out. Look after the people that really need it.

I'm going to read this properly tomorrow. It's interesting.

Has anyone except carer mentioned people who can't work? I haven't seen a decent reply to her but will read again more thoroughly. I'm on ESA. I have a long-term illness. My benefits come to just under £15k net - so no difference for me on the face of it, but things would go up because of your universal tax. Inflation linking wouldn't help because you couldn't do it quick enough - I already have to go without basics when a price increases.

A sick person with children, or one with medical expenses, needs a heck of a lot more than I do to live. You would be forcing them into horrendous poverty, even faster than our current idiots are doing.

Plus: I'm convinced a sudden influx of currency would cause runaway inflation. I've lived in an economy with that. It's very difficult - you have to spend all your money on pay day because it will buy much less by the end of the month!

While I think this idea is a bad one, I do believe in demand stimulation and feel that a way must be found to compensate people for not working. With the means of capital generation being concentrated in ever-fewer hands (and moving out of the country), we've got to accept that jobs for all is a thing of the past and look at fresh ways to keep everybody healthy, with cash circulating faster. A more fluid consumer economy will prompt more ground-level initiatives as there will be more customers for them. This should seed a new cycle of growth.

So: Nice line of development, but crap idea as proposed!

FAO GARLICBUTT. I recommend reading this post first. It answers the "people who can't work" question.

FAO: AMBERLEAF. I put your question to the basic income community and this is the best reply I got. It's from someone else, not me, but I agree with everything she says.

I think that it is underestimated the transformative impact of a universal livable income, it is a transition to a more community minded society because it would allow us to redefine work to something like "only that work will be called productive that really produces, maintains and enhances life" (Mies and Bennholdt-Thomsen in The Subsistence Perspective). So all the unnecessary and wasteful jobs for jobs sake would no longer be using up all our time and resources and that time and resources could be used instead on necessary things, like improving life for people with disabilities for example.

Given that the number 1 impact on health is poverty (The Spirit Level and Richard Wilkinson's other books go into social determinants of health at length) and given that the biggest public expense currently is health, then a basic income could be thought of firstly as a health initiative.

And by doing away with other benefits and rolling them into a basic income, does not mean we are doing away with health services. What she needs is extra help because someone in her family has a health concern, they have a disability, this would be a health service and there would be vastly more resources for health services since public health in general would improve under a universal income.

The Manitoba Mincome data from the experiment where a whole town got a guaranteed income for 3 years showed fewer hospital visits and more teens staying in school instead of leaving school for work, so since public health in general will improve, that means resources can be put towards other essential health concerns.

I became an advocate of guaranteed income when I was a single mother of 3 on a very low income. My best friend had 3 boys and the oldest had cerebral palsy and she was low income too. She did have a caregiver come and help him a few times a week paid by the government under a health program. She did need extra help, but the main thing that both of us noticed in our sleep-deprived state of permanent exhaustion, was that our friends and family were not available to help us because they all were too busy working. And when you would try to use some kind of moral pressure to try to get more help, any mention of work would trump any peer pressure or moral pressure. 'well I can't help you tomorrow because I'm working" means you give up and don't bother asking them for help.

Currently the job trumps everything. In families who need eldercare, it is often the sibling with the fewest paid work obligations who is expected to do the most unpaid family care. With more people having more time, then more people can share in doing the care work and community volunteer work.

I just wrote an article where I wrote about my friend and her son now that he is a young adult with a disability and he is so isolated because no one has any time to spend with him.... because they are all working. Here is the article: Time to Change to World

www.livableincome.org/atimetochange.htm

For a short time in BC in the 90s they had changed the welfare rules so that single mothers on welfare didn't have to look for work until their youngest was 12 years old. And single mother volunteers flooded into all kinds of community initiatives and started all kinds of programs.

I think people, especially parents, would quickly organize things when needs emerge. That's my argument in the Time To Change article, that we would have time to organize and respond to things.. and that is where the main transformation of society would come from: time.

Time freed from useless make-work jobs that make everyone miserable, could be put towards those things that improve and enhance life.

What many people need to make their lives easier is other people's time. People would need care and provide unpaid care, currently get isolated by the commodifcation of time in the market system. All that would change when we get a universal income.

Hope this helps. Most of it is in the Time article, and you can also go to the Health section of the website too: www.livableincome.org/health.htm

and for the Manitoba Mincome data see the report: The Town With No Poverty www.livableincome.org/reports.htm

CorruptBstard I had a thought last night. If this is totally beneficial to the wider economy, with no adverse effects at all, why 'only' give away £15k? Why not give away £30k, or £100k, hell why not just give everyone a hundred million quid a year? Think of the poverty you'd eradicate then!

Could you please explain how you arrived at £15k and why that number is right, yet £30k would be wrong please?

Thanks for the reply Corrupt.

Hmm. That looks like I'd be at the mercy of kind strangers then. I don't have any family who are able to help me anyway and tbh not many people can deal with my son. So I wouldn't fancy my chances under your proposals tbh.

I understand the ideology behind it, I just don't think it would work and I know it would make me feel out of control and like a nuisence.

Interesting idea which could make a lot of sense (haven't both the greens and lib dems toyed with it?) - but it would have to be part of a package of measures to deal with income inequality. Otherwise, inflation would erode the value that comes from this approach.

Currently reading Joseph Stiglitz's 'The Price of Inequality' - an interesting economic analysis of the inefficiencies that arise through income inequality and why it stunts growth.

Mr judgypants. Because £15,000 would cover basic needs at todays free market led prices. Paying £30,000 or even £1,000,000 would of course lead to the rampant inflation you talk about. Ie if I give you £1 to buy a loaf of bread then that's what it costs today. If I give you £1,000,000 to buy a loaf of bread of course the baker will put the price up to £1,000,000 because he knows you want to pay that much for it

One other point. We all seem to be taking about this as if its going to be adding money into to current system, without taking into account that the current financial system is about to implode. The fact is we will have to start all over again soon anyway. The balloon has already burst, the banks are going to collapse. It's inevitable. What I'm really talking about is a new way to start the new system once the current has finally folded. Give everyone £15,000 to meet their basic needs, tax money every time its spent or transacted, give people the freedom and time to do stuff just for the love of it and let free market economics do the rest. Simple

I thought you'd say that. So you can see where we are coming from when we say that running the printing presses, and giving that money away, leads to inflation.

Why then, does this not cause inflation when we are talking about giving away £15k, but it does cause inflation when we give away £30k?

Well asked, Judgey.

Corrupt, I don't know whether it's simply that your quotes are coming from American authors or you are a US citizen, but they seem to be missing the fundamental benefits of living in a (still, just about) benevolent capitalist society like the UK. Needs are not considered equal here. Those with greater needs and fewer capacities receive help from the State. By equalising everyone's benefits, you remove the underlying tenet of a compassionate society.

Amber wrote a more polite reply but I will take strong issue with this: ... family has a health concern, they have a disability, this would be a health service and there would be vastly more resources for health services since public health in general would improve. It displays profound ignorance of a life with ill health. It's not all about health services. There are mobility and transport issues, severe constraints on social activity, lack of access, lack of free time, problems in running a home and much much more besides. Who would fund the stair-lift; the waist-high power sockets; the ramps? Appropriate benefits allow the recipient extra money to spend as needed. That's the theory, anyway, and it's still better than treating everybody like all in life is a matter of choice.

In the UK, elderly and disabled people living in cold homes can get state-funded central heating and insulation. I did, thanks to taxpayers :) Would you say I should have spent 20% of my pathetic annual income on it or suffered hypothermia? When the analogue TV was switched off, I got a state-funded freeview box. That would have cost me a fortnight's income. The list goes on.

You would have to be an idiot not to see our current banking model is broken. Merely changing the way consumer income is distributed won't fix it. While I recognise that all currently offered alternatives are very flawed, I prefer the Positive Money-based approaches.