Debate Magazine

It is Easy to Rubbish Something If You Wilfully Misunderstand It

Posted on the 01 June 2016 by Markwadsworth @Mark_Wadsworth

Spotted by ShineyMart, in article from FT:
Yet simple arithmetic shows why these schemes cannot work. Decide what proportion of average income per head would be appropriate for basic income. Thirty per cent seems mean; perhaps 50 per cent is more reasonable?
The only meaningful debate to be had is what level the basic income could be (whereby £zero is a number worth considering). Pitching it at a random target like 30% or 50% is idiotic. So a sensible start would be to set it at current unemployment benefit rates of about £80 (excl. Housing Benefit)). That is perfectly affordable, assuming it replaces most cash welfare payments and the tax/NIC-free personal allowances. Relatively few people would be noticeably better or worse off (more than £10 a week either way).
(Personally, I'd like to see it a bit higher than £80 a week, maybe £100 or £120, but that is pie in the sky for the time being).
To see the average tax rate implied, add the share of national income taken by other public sector activities — education, health, defence and transport. Either the basic income is impossibly low, or the expenditure on it is impossibly high.
No, set the rate correctly (£80 a week) and nobody's tax rate would go up - for those on means tested benefits would see their tax rates fall dramatically.
There could be no low-paid or part-time positions. Few work as refuse collector or shelf stacker for the love of the job. So such employment must pay more than the guaranteed basic income. Higher unemployment and radical redistribution of income would follow.
Yes there would, provided you can keep most of your earnings and lose none of the basic income (instead of under current rules where you lose half your earnings and all of your unemployment benefit - hence the whole sanctions regime). To be fair, he is attacking one specific proposal which recommends means testing the basic income, in which case it is not a basic income, full stop.

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