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?

CorruptBstard ^"there was me wanting to put a close to this thread as friends and you have to throw me that one LOL."

Right, where do I begin...?

The local currency idea, being backed by sterling at the rate of 1:1, means that the City of Bristol and the rest of the UK would be locked together in a one sided currency union. For obvious reasons, the Bank of England will not accept Bristolquids (TM) as legal tender, nor will they be under any obligation to exchange the Bristolquid banknotes for Sterling. Any exchange would have to be done in Bristol; presumably by Bristol City Council. To get the scheme off the ground Bristol Council would have to issue a promise that these notes would be held in parity - otherwise you get back to the dreaded inflation again! But, if these notes are guaranteed to retain their value against Sterling then there is no real problem. So far so good.

The problem will come when you start running the printing presses and begin conjuring up these banknotes out of thin air. Either you will have to honour your pledge that they will retain 1:1 parity, thus bankrupting Bristol City or you will have to abandon that promise and let the currency float freely and we're back to rampant inflation again!

"This would mean people start buying local goods"

Just how much food does Bristol produce? How much of Bristol's consumption is 'imported' from the rest of the UK? Or to put it another way, how self sufficient is Bristol? Because, if you need to 'import' a product from the rest of the UK, you can bet they will want to be paid in Sterling and not a currency that can only be spent in Britain?s eighth largest city. This will also apply to shops and supermarkets which source their produce from outside the Bristol area.

"to save a couple of pence on a tin of beans."

Again, no. Upthread you want to pay every adult £15,000 per year. To balance the books, you will need to tax every adult an average of £15,000 (If you don't do this you'll either bankrupt Bristol or have hyperinflation depending on your response to my point at the start of this post). To balance the books you will need to raise almost £300 per week, per person from your sales tax alone. I don't know about you my friend, but our weekly shopping bill comes to around £100. In Bristol, this would have to cost around £400 each week. That's a little bit more than a couple of pence on a tin of beans.

"I would like to acknowledge as well that any system is just that, a system, it can't in and of itself solve any problem, the problem but also the solution is human nature."

Agreed. Any system which fails to take into account how humans work is doomed to fail - and that, Garlicbutt, is an absolute policy which isn't flawed.

Corrupt I like you - should Bristol ever need a chancellor (and by God, if they elect you they will do!) I would be happy to serve.

Garlic yes good old human nature!

I guess that's why we tend to be keener on communism when we're young; inexperience (or naivety) about people

Agree, either young and inexperienced or older and overly optomistic!

I've just spoken more to him raising these points and he's now saying he won't allow greed....he's sounding more and more like a dictator by the minute. [Grin]

This is interesting when compared to the relative rates of tax that people pay when coming out of benefits.

At the moment, if you get a small amount of work, the state removes it all immediately. Punitive and no incentive to work.

With the universal credit, people moving into work will be paying effective tax rates of 65%. This seems very high - the highest tax rates in the system reserved for those in poverty??

The idea of the basic income is as a replacement for all sorts of benefits. When people are earning a certain amount, say £30k, we could increase taxes gradually so that they no longer have/need basic income, for example could have a standard rate of tax of 50%:

When you earn £10k, you keep £5k and are taxed £5K. This makes your income rise from £15 to £20k: good work incentive, and decent standard of living.

earning £20k: total income £15k + 10k = 25k, tax contribution = 10k

earning £30k: total income £15k + 15K = 30K, tax contribution = 15K

earning £50k: total income £15k + 25k = 40k, tax contribution = 25K

earning £100k: total income £15k + 50k = 65k, tax contribution = 50k

Which looks pretty good in terms of getting everyone out of poverty, work pays, and tax levels look reasonable, with a bit of fine tuning and checking required to make sure everything adds up.

I've got no idea why this hasn't been implemented, Chicken. I was on the New Deal - erm, 2005, maybe? - for the tiny amount of time it did work, and it was great. I was still poor, obv, but it was the only time since getting poor that I've felt securely confident about working my way out of it.
Unfortunately it only lasted a year or less. I never got to work out of the 'hole' as I suddenly started getting letters telling me my benefits would cease if I was earning. Gah!

ps: Your sums don't look right.

We would still need to give extra support to people with greater needs. What you've posted (guessing at what your numbers were supposed to be) is basically a £15k tax threshold with graded taxes thereafter. It would be nicer to come up with a system that left NO need for tax credits (in particular) or other income supplements.

The sums are right, I would want a study done to check details and ensure public finances etc would be viable and balanced.
With the government telling us people are getting 26k in benefits, this must be entirely workable, and would make savings without making people destitute. Children would also require basic income but at a proportional rate.

No, its not a 15K "tax threshold" at all - look at total income.

Housing would need a better system, as the current one of "think of a number" rent levels in London combined with imminent mass homelessness doesn't work.

What greater needs are you thinking of garlicbutt?

AMBER tell your son to keep believing in the potential of every human being for goodness as well bad. Because everyone has that potential. In fact there are an abundance of "good human nature" examples in the world. The news just tends to focus on the bad. As question for him and for you to add to your current discussion with him. How many good people and how many bad people do each of you know personally. What's the proportion? ;-) not a communist myself, but can understand a bit of the attraction to that system.

Thanks corruptbastard, I try to encourage him to see the good and he does on the whole and is certainly of a caring generous nature himself.

In our conversation last night I actually said that it only takes the greed and corruption of a small number of people to ruin it for the majority.

He has a very enquiring mind so lots of interesting conversations!

Chickenlkn
I think if I'm understanding it right that your suggestion again relies on everyone being physically able to work?
What about the sick, people with disabilities that prevent them from working and those that care for a disabled child/family member?

That's what popped into my mind when I read garlics bit about 'greater needs' not sure if that's what she meant though!

Yes, it was what I meant, Amber.

Chicken, are you proposing a flat 50% tax on all earnings above £15k? That's not a whole lot better for upcomers than 65% is it?? I would have thought it better to grade tax rates upwards, as you said in your fourth paragraph.

CHICKENLICKN: top post. Different way of funding it but I don't care about that, the effect is the same. Is vote for you ;-)

Right, I'm now about to read your post Mr judgypants ;-) here we go LOL

I would use my extra 15k to educate Corrupt + supporters on this thread with an Economics A-level so they could begin to comprehend what toshbollx they are talking. Thankyou.

Amberleaf - would apply to sick and carers too. Disabled people are sometimes able to work, and would gain the rewards for this - adaptations required could perhaps be funded through NHS/social care.

Garlicbutt - its better than the 95% current rate, (and 65% universal credit rate), because there is no "withdrawal of benefits" penalty.

Also, the tax is only applied to people NOT in poverty, whereas the current system taxes those in poverty punitively therefore keeping them in poverty.

Bootle - why wait? Or have you not done your A level yet? ;-)

ChickenLicknSat 07-Jul-12 00:53:55
With the universal credit, people moving into work will be paying effective tax rates of 65%

Please can you explain this. i cannot see how it is so.

Amberleaf - would apply to sick and carers too. Disabled people are sometimes able to work

I know. I'm talking about those that can't and their carers.

So again same as corrupts proposal the non working disabled and carers are worse off than they are currently.

This doesn't surprise me tbh as most people are unaware of the barriers to work faced by disabled/carers.

Hehe, Chicken, yeh- I did mine years ago. Mr Pants obviously understands a thing or too and has put forward how-the-fuck-it-wouldn't-work in alot clearer and more sensible language than I would use, but still doesn't seem to be getting his points understood. So perhaps my 15k would be utterly wasted on education. I'll have another think.

Can anybody point me to where it says a family of, say, five children with a single parent and disabilities can live comfortably on £15k a year?

First it would stop people having children without a partner or without livigint with their sister, mother and aunt which is a system we just cannot afford now as tax payers. So yes it might be hard as a single parent to live on £15k os may be you will ensure you aren't a single parent or get a job like the rest of us. It is atough to be kind reduction in benefits.

I would get £18000!!!!! housing benefit never mind state benefits if I did not work. i was astounded by how high the sum is. We need to reduce this.

I have often suggested a universal benefit - I suggested £200 a week per adult to include your housing needs to and if you cannot afford to house yourself on that move somewhere where you can, move in with family, share a room in a shared house or get a job.

The idea on the thread of no income tax was mooted recently. I cannot remember the source. The plan included baolishing IHT too and CGT, It sounded wonderful. You remove all VAT exemptions too including on food and children's clothes so you tax spending. Great stuff. Bring it on.

may be you will ensure you aren't a single parent or get a job like the rest of us.
Wow, just by cutting benefits you can prevent fathers walking off or dying? That's brilliant.

if you cannot afford to house yourself on that move somewhere where you can
Good thinking, Xenia, wonder why nobody's tried it

How do you propose people fund their en-masse moves to some cheap unemployment ghetto (like the one I live in)?

What will you do to ensure the sudden influx doesn't prompt a hike in rents, prompted by the ghetto housing shortage your policy has just provoked?

get a job

There are between TEN and FOURTEEN job seekers for EVERY SINGLE JOB in the UK. So a maximum of 10% could follow your advice. That's assuming they haven't already moved to an unemployment ghetto, and would be able to physically get to a job.

Do you have any more good advice for the unsuccessful 90%?

Hi Mr judgypants. I am about to post my answers to your post on the bristol quid, But its quite long and I also wanted to get some other thoughts from you. So am posting a second post first, rather than making a long one even longer.

I am fascinated by this rampant inflation question. And I trust that you really know what you're talking about so id also like your constructive criticism on these 2 thoughts/proposals

1. Basic income is index linked to inflation.

1. introducing an unconditional basic income will lead to a natural "free market reorganization" of what people demand & supply. Ie nobody would "need" a pension, so that whole industry would be drastically reduced, along with everything in its supply & demand chain. from Call centres & admin to fund managers & investors. This is one example of how money would be taken out of the money supply to compensate for the addition to money supply of the unconditional basic income. If the money supply doesn't increase, neither does inflation.

Yo judgypants. First of all, if only I could get the rest of the population to ask the questions you ask, id be very very happy and would have fulfilled my mission to get people thinking and talking about money and the basic income. Wouldn't it be great if people started asking "why won't the bank of England recognise and back the bristol quid?", "why is it illegal to print your own currency?" "How self sufficient is your local area?" "If the whole system collapsed, could we feed ourselves?" But I digress ;-)

I'm really enjoying this dialogue now, I reckon you probably like the idea yourself, but disagree that it can be funded and therefore its flawed as a pipe dream.

Here's my attempt to answer your questions.

1. Parity. The council will act as guarantor. They will Exchange 1:1 bristol quid for sterling pounds. Obviously if everyone came to Exchange their bristol quid for pound sterling all at once, the council would go bankrupt. Just like if everyone in the UK went to their bank to withdraw their pounds sterling, the banks and the UK would go bankrupt too. So what works for one has to work for the other.

1. Bristol pounds are acceptable to enterprises outside bristol, like food suppliers, because they're exchangeable at bristol council for pounds sterling, also they're exchangeable for goods and services sold inside the bristol boundary. A bit like a "foreign market". afterall, again on a national scale, the UK trades for food with all sorts of regimes. Nothing too different there either. Also maybe, with the free time a basic income would provide, more people in bristol would start growing food, and bristol may become more self sufficient over time.

1. the £100 shopping example, needing to raise £300 in tax, assumes that the £100 is spent once and it all ends there, but it doesn't, the shop owner who recieves your £100, spends it somewhere else, possibly on restocking his shop, the person who restocks his shop, spends the £100 possibly paying transport costs and wages to his staff. His staff spend the £100 on goods and services themselves, and so the chain continues. All from one £100 note. If we tax money everytime its transacted, that would be a tax on £400 of transactions on the above example alone. The sales tax is really the automated payment transaction tax and wouldn't need to be that big a tax percentage when you consider the vast amount of monetary transactions that there are on a daily/monthly/yearly basis, hense not needing £100 worth of shopping to raise tax of £300 as in your example.

As for the election I wouldn't worry about being chancellor, because I won't be winning it, it'll all end in humiliation just like the last time, with me as a laughing stock, but that's a small price to pay, for the chance to get into conversations like this about money and the basic income. Not so small a price actually come to think of it, with the 500 quid deposit and 2000 quid to get an electoral address, advertising the unconditional basic income in the official council "candidates electoral statements mailout" that goes to every household in bristol. But life is short, so may as well use it to the fullest eh ;-)

All money is nowadays is a measure of confidence. So if there was enough trust in the Bristol council to act as guarantor and everyone had enough confidence that the council had enough cash then it could/would work.

There are already Brixton Pounds, Stroud Pounds & a few others. None have really taken off at all.

The sole reason why the US dollar is still the international currency of choice is purely because there is confidence that the US economy is stable and their currency is more stable than the others. In time I predict this will wane and people will start to use the Yuan/Renminbi as the default.

I don't think it will be the Yuan/Renminbi, I think the Euro will be the next world reserve currency, and I think Britain will have to be part of it; it will be too strong to ignore.

www.huffingtonpost.com/alexander-goerlach/the-next-reserve-currency_b_1642382.html

www.cnbc.com/id/34855822/The_Future_Reserve_Currency_Is_the_Euro_Strategist