Jan 12, 2014

Don't try to build Rome in a day

Free Money for All - The Only Way Forward on Welfare ,Joseph Finlay
The above is a good post arguing for an unconditional basic income for UK, of £10,000 per adult per year.

Here is its funding calculation:

How would this be funded? Assume 49 million adults in the UK: £490 billion a year is needed to pay them a basic income. This sounds a lot, but not when you consider that UK GDP was around £1.5 trillion in 2012. Firstly, the current benefits and pension system, with its inefficient and intrusive system of means testing, currently costs around £200 billion a year. The abolition of pension relief nets another £40 billion per annum. Since the basic income would be almost double the current state pension this is more than justifiable. We could raise another £15 billion from inheritance tax by dropping the threshold (the 'nil-rate band') to £80,000. Finally, and most importantly, abolish the income tax personal allowance and tax all income at 46%, netting an extra £242 billion a year. That might sound a high rate of income tax, but when you include the £10,000 basic income, everyone earning less than £30,000 would be better off. Those total £497 billion, enough to pay the Basic Income with a healthy £7 billion left over for administration costs and contingency. That's just one funding suggestion - there are other options, such as increasing capital gains tax, corporation tax, or instituting the so called 'Tobin tax' on Financial transactions used by bankers. It's clear from these figures, however, that a Basic Income would be eminently affordable.
The proposal tries to get a big unconditional basic income instantly. There could be quite a lot of pain somewhere. A painless strategy is that of the Alaska Permanent Fund, where money is accumulated from common wealth and the dividend is distributed. Another example is Norway's sovereign wealth fund. The fund investment return alone can distribute $5,000 per citizen, young or adult.

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