Debate Magazine

Killer Arguments Against Citizen's Income, Not (32)

Posted on the 24 October 2020 by Markwadsworth @Mark_Wadsworth

With my Citizen's Basic Income Trust hat on, I had a Zoom call with somebody doing an MA on the topic yesterday.
He asked me about "political feasibility", given all the other (spurious) objections.
The answer is, do it softly-softly behind the scenes. For example (ignoring the fact that they are trying to lump a lot of this into Universal Credits):
1. There is a significant couples penalty in the welfare system. A single adult gets £74/week Income Support (in its various guises) and a couple gets £117/week. So just hold the single person rate fixed and gradually bump up the couple's rate to £148 and allow them to put in two separate claims. Then get rid of the tick box that asks whether you have a 'partner' or not.
2. Gradually align Working Tax Credits (basic amount £3,040 a year for a single adult working more than 16 hours/week or £3,865 for a single adult working more than 30 hours/week) with Income Support Rates and reduce the 16 hours/week threshold down to 1 hour.
3. So Working Tax Credits would end up at £74 x 52 weeks a year = £3,848, even if you are only working 1 hour a week.
4. Gradually reduce the earning threshold for Working Tax Credits withdrawal down to £nil, while at the same time gradually reducing the total withdrawal rates for Working Tax Credits and Income Support down to 32% for every £1 of income (from their current overall rates of about 60% to 100%).
5. 32% is of course the current real basic tax rate (income tax + Employee's NIC). At this stage, you no longer need a parallel means-testing system - claimants are just given a PAYE code with no personal allowance (a BR code) with a tick in the box for "Income Support/WTC claimant - no NIC threshold". They do this with the extra 9% tax for people with student loans, it's perfectly realistic . So they get full amount of benefits and these are "means tested" via normal PAYE.
6. Gradually reduce Statutory Maternity/Paternity Pay (£151/week for 39 weeks) to the same as Income Support or Working Tax Credits, while extending the eligibility period from 39 weeks to "until you are old enough to get the old age pension". Claimants get the same adjusted PAYE code as above.
7. Married people who earn less than the Personal Allowance can transfer part of the notional tax saving to their working spouse, it's a tax saving of a laughable £250 a year. This one will keep the Daily Mail readers happy. Allow the lower earner to transfer the entire unused part of their personal allowance, and/or allow the lower earner the lost tax saving on the unused part as a cash payment (to the extent they are not getting Statutory Maternity/Paternity Pay, see above) and gradually bump up the cash payment to the same as Income Support - WTC - SM/PP rates.
8. Gradually phase out all the "looking for work" conditions, do interviews every three months instead of every week, reduce the number of hours people have to pretend to be looking for work down to 1 hour a week.
And so on - in five or ten years, we'd have a UBI system (or Negative Income Tax system) and nobody would have noticed. Most people wouldn't have a clue what all these things mean, so won't have a strong opinion if some obscure sections in some obscure social security acts are amended a bit every year.

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