Hmm.
One of the bright ideas in my Bow Group tax and welfare simplification report was that all benefits would be paid into bank accounts and banks would have to allow welfare claimants and pensioners to open basic bank accounts (on pain of losing their banking licence).
This would enable such people to pay their utilities by Direct Debit (you can have weekly or even daily Direct Debits, apparently) timed to leave the account the same day that their money goes in. That helps them save 15% or so on their utility bills.
Just sayin', is all.
Friday, 22 August 2008
"Tories plan energy discount card"
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4 comments:
I think your excellent paper (arguing for very real redistribution of wealth) sticks out like a sore thumb compared to the rest (which seems to be mostly very basic right wing twaddle by Tories and ex-Tories - for example, it stretches the imagination to the extreme to claim Livingstone made the bus service in London worse).
I think the biggest problem with your radical proposals will be the transitional costs and resistance. The inertia of the system is titanic and there will be huge vested interests to be overcome.
Also, I always thought the big advantage of a basic citizens income, is its universality.
By only paying it to the unemployed and low waged - there will still be a financial disincentive to work - especially as there would be a massive 38% tax on all earnings (with no personal allowance) unless the BCI was given up.
I think this is not simple enough! Pay everyone - it is then simple to administer and there is no financial disincentive to work. Pay for it with vastly increased easy to collect indirect taxes on anti-social products and services rather than just on income.
Like you say 8m people do not work in this country and probably most of these people could work if we did away with the benefits trap that makes them financially worse off at work. We have to pay out huge sums that leave millions stuck in an unproductive, depressed state of poverty. Lets make it worth their while to work - most people want to work.
"Also, I always thought the big advantage of a basic citizens income, is its universality.
By only paying it to the unemployed and low waged - there will still be a financial disincentive to work - especially as there would be a massive 38% tax on all earnings (with no personal allowance) unless the BCI was given up."
Good lord, I find myself agreeing with Neil Harding. Except...
The Citizen's Basic Income as so envisioned will be very expensive: roughly £250 billion at my last calculation. That's why I have softened my support for it of late...
DK
NH, I suggested a straight choice:
If you earn more than £11,000, you choose a personal allowance of £11,000 and save £4,200 income tax (38% x £11,000). If you earn less than £11,000, you claim your £80 a week CBI (=£4,200 p.a.) but pay 38% income tax on all income. That's got to be better than paying 70%-plus benefit withdrawal rates and also it makes it easier for short-term/temporary employment.
DK, a CBI of £30 (kids), £60 (adults) and £120 (pensioners) wouldn't 'cost' any more than current mish-mash of welfare, pensions, tax credits, tax exemptions 'costs' (in cash terms).
See also switcheroo explained above, that would reduce 'cost' and tax revenues £ for £.
Too right you can have weekly or daily Direct Debits. Read the small print "the amounts to be deducted are variable and may be deducted at any time".
That's what it always says. And it means they can take whatever they like whenever they like.
Just say No.
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