Wednesday, 27 November 2013

Citizen’s income.

The idea that every citizen should get some sort of basic income is gaining popularity. What’s to be said for the idea?
Strikes me everyone already gets some sort of basic income. I.e. 99.9% of the population are, 1, in work, 2, on benefis, 3, on a pension, or 4, children living with their parents.
You could of course pass a law saying everyone is entitled to a basic  income paid by the state. Let’s say that income is whatever a single person gets on unemployment benefit (which, in turn might be about equal to the basic state pension).
But then there’d be a whole host of people on benefits entitled to more, e.g. because they have two or more kids. So the total amount of bureaucracy wouldn’t change much.
As to those in work, government would have to collect a huge additional amount of extra tax in order to pay the basic income to those in work. So for the sake of argument, government could collect that money via a tax on employers and employees. But there’s a problem there as follows.
Say government takes £Xbn off employers and employees and then gives it all back to them. Everyone is back where they started, except that about fifty thousand bureaucrats are needed to collect the extra tax and dole out the basic income to employees.
It could be argued that with our now being much better off than a hundred years ago, we can afford to let the work-shy not do any work. But we’ve actually made substantial moves in the latter direction over the last few decades. That is (at least in the UK) it’s been possible for for the work-shy to live for decades on end on invalidity benefit on account of fictitious invalidities. I know people who have done it.
So if we move from the latter “underhand” basic income system to a more open or official basic income system, nothing much would change in practice. Except that there’d be a reduced incentive to work, so GDP would decline. And is that what we want? Plus isn't there a basic obligation on able bodied fit people do something worthwhile, amongst other reasons so as to contribute to the upkeep of those who cannot work (pensioners, the genuinely disabled, etc)?

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