From the BBC:
Every adult in Britain would be paid a basic income regardless of wealth or earnings, the Green Party will say in a commitment to appear in its manifesto.
But Natalie Bennett, the party's leader in England and Wales, told the BBC a Citizens' Income of £72 a week would take time to implement...
Critics have suggested it could cost £280bn.
That depends how you define 'cost'.
The total amount nominally paid out (including lower amounts to children and double that amount to pensioners) plus running costs, fraud and error would be approximately £280 bn. Nobody's disputing that.
It would all be 'paid for' by scrapping an equal and opposite amount of existing state pension/welfare payments and tax reliefs (notably the tax-free personal allowances for income tax and NIC) and reducing running costs, fraud and error. (Housing Benefit and disability related benefits would continue for the time being) In other words, the cash 'cost' is exactly the same as the current system. That's the whole point.
It would take no time at all to implement; for pensioners and children we use the existing system as for state pensions and child benefit; existing welfare claimants continue claiming what they are getting (but in return they get a BR tax code so pay full income tax and NIC on all their earnings, if any).
The majority of adults who are in work just get an appropriately higher personal allowance (i.e. £72.40 x 52 ÷ 32% = £11,765) but no cash paid out (it nets off with the PAYE they would have had deducted). There's a bit of faff with people who less than the new higher personal allowance, but it is a lot less faff that the existing system, in particular working tax credits.
There will be a few winners and losers, but we are talking relatively few people affected and relatively small gains or losses. A really simple system like this is inevitably slightly less 'progressive' or redistributive than the current system because on the whole, low to middle earners are likely to gain at the expense of non-earners, but so what?
The only debates to be had are whether £72.40 per week is too low or too high; what to do with Housing Benefit; and whether we ought to start tinkering with 'transitional measures' for the small number of people who end up with less money in the short term.
Tuesday, 7 April 2015
From the BBC:
My latest blogpost: "Critics have said it could cost £280 billion"Tweet this! Posted by Mark Wadsworth at 16:37