I posted one of my usual articles here a couple of weeks ago pointing out that if you add up all the cash benefits paid out (incl. state pensions, excl. housing- and disability-related benefits); the value of the tax -free personal allowances; add on all the 'welfare for the wealthy' tax breaks; and then distribute that total pot equally across the UK population, you end up with something like £180/week for pensioners, £90/ week for working age adults and £45/week per child (+/- £10, no point arguing over precise numbers). Disability and housing top-ups can stay as they are for now.
To reduce 'churn', people would then have a straight choice between a) claiming the tax-free personal allowance, which most working age adults would do, and b) claiming the Basic Income amount. You can tweak the numbers to ensure that people in steady jobs are slightly better off sticking with the personal allowance.
I then tweeted a link at Citizen's Income Trust, inevitably, the usual left wing argument came up: "So you are just redistributing between people on low or no incomes?".
To some extent yes, but so what? How is this an argument against? If we got accustomed to the Basic Income system, then there would be (say) five million working age claimants, getting £95/week each. If some innumerate lunatic suggested weeding out some subjectively 'undeserving' recipients and paying the remaining 4 million people £119/week each and letting the rest starve (for the same total cost), wouldn't that also be "redistributing between people on low or no incomes?"
How is that better? Marginal utility suggests that you reduce poverty most by paying everybody the same, end of. And seeing as part of the point of any welfare system is to reduce social unrest/improve social cohesion and give people the impression they are all equal citizens (same as one man, one vote), why not have a system where nobody can claim that one group is being favoured and some other group being disadvantaged?
This cuts both ways. Current claimants can't be stigmatised, they just get it as a basic entitlement. The unemployed and single parents have also the same right to vote or use the NHS as everybody else, AFAIAA. Daily Mailexpressgraph reading stay-at-home spouses get £90/week plus £45/week for each child as well, so they've no excuse for looking down on single parents etc.
Thursday, 14 April 2022
Killer Arguments against Citizen's Income, not (35)
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32 comments:
I'm for giving people who contribute towards tax revenue an extra vote for each £1,000 paid. That allows everyone to have a vote, but the minority who actually pay for things to have a greater voice than those voting to give themselves more of other peoples money.
M, that is one of the worst ideas I have ever heard.
Less representation without taxation.
Matt, my fantasy house of lords reforms includes a version of this. Some proportion of hereditary and life peers, plus a proportion of elected temporary 'peers' elected proportionally based on people's non-state funded income tax advice the basic single vote.
@M, @k - then they would happily pass laws that lets them extract as much income as possible from the low income people that have lesser representation and marginalise them even further.
PW, ta for back up.
Hence why this would only apply in the lords, and then only in part to keep done level of checks and balance.
Or current system has allowed people to vote themselves access to the national treasury with no cost, at least no short term cost to themselves.
Focusing on income tax paid is incredibly simplistic. It makes no allowance for the non-financial advantages people receive from the state. If people who are earning more are doing so because they've been advantaged by the state, giving them more political power will just entrench that state of affairs.
"If people who are earning more are doing so because they've been advantaged by the state, giving them more political power will just entrench that state of affairs."
Ummmm.... NHS Managers, senior council officials, employees of fake charities, quangos, the BBC and of 'the state' in general don't this then?
M
PL, agreed.
Sh, that's an example of what PL said. But those aren't the big ones. Most rents are backed by government.
@ Piotr
You rebuttal is erroneous on a number of points:
* When you state then they would happily pass laws you mean that the parliament elected would do so (as a proxy for the electorate).
Assumption being that they can ignore the votes of those with less tax contribution. This leads to...
* The redistribution of votes would significantly impact the results of elections.
Rich people are more concentrated in the South East and therefore this would impact more on constituencies that are likely already voting for a particular political party (the Evil Tories for example). The FPTP voting system also works well in this scenario to balance representation. In any case, even if the above isn't correct...
* That people with more votes (higher tax contributions) would vote as a single block and for the same political party or policies.
It's unlikely that Tim Wetherspoon and JK Rowling would band together to repress the poor further. Or that head teachers would vote with stock brokers, union leaders with CEOs etc.
From my analysis of the tax revenue broken down by bands, 59% of votes would still be cast by basic rate taxpayers, 16% by higher rate and 25% by the additional rate.
So the basic rate taxpayers still hold the majority of votes. What this does do is make it harder to justify a high tax & spend government as the other 41% will need to be taken into account (currently they make up 3.5% of the electorate).
Already elections are being gerrymandered - not by boundary changes (which are pretty limited), but by imported demographic population changes. I think my proposal is a much more honest approach than what is already happening.
Matt: "Already elections are being gerrymandered - not by boundary changes (which are pretty limited), but by imported demographic population changes"
In the real world, the main demographic impact is the large number of baby boomers relative to other generations, which has skewed the actions of governments to pander to their interests at the expense of everyone else. I don't think there is any robust justification for moving away from a system of equal votes, but if it were to happen, it would make more sense to balance out the demographic impacts by reducing the value of votes of people in age bands where there are more voters, or make the votes of older people worth less.
@ Paul
Young people are poorer because they (generally) have no useful work experience or qualifications. They also leave school/university with ideas that have proven time and again to not work (see Zimbabwe, Venezuela, South Africa etc for examples). This means they think that the fix for all the worlds ills are the simplistic ideal of wealth redistribution.
Once they have grown up, they make more money, have a family and get old and (sometimes) gain wisdom. They become the older generation that votes to keep the country from doing anything really stupid.
I also doubt when it came to it that many young people would want to disenfranchise their parents and grandparents.
@Matt: "They become the older generation that votes to keep the country from doing anything really stupid."
Hilarious! I actually thought your comments were being made seriously. You got me.
"I also doubt when it came to it that many young people would want to disenfranchise their parents and grandparents."
Except, presumably, if they were being disenfranchised on the basis of being retired and paying less income tax, when they would be fine with it, because reasons.
Matt, I have normal office job with plenty of people in their 20s. They are no different to how the oldies were at that age. They want to earn money, have a bit of fun, save up the rest as a deposit for a house, get married have kids. All pretty boring and mainstream. Not a Commie among them.
We can live with an earnings pyramid, where today's kids are being royally fucked over is house prices and rents.
Matt, firstly I agree with PL.
Secondly, who do think is paying a third of their wages in tax (NIC) to pay pensions to the old folks? It's all working people, including the young ones.
If you are down with the idea of vote buying, pensioners are net benefit recipients so should get no votes at all. If and when I'm a pensioner, I shall feel gratitude towards every working person subbing my retirement AND allowing me to vote.
Like I say, vote buying is a terrible idea.
@ MW
You posed the question why not have a system where nobody can claim that one group is being favoured and some other group being disadvantaged?.
I suggest that the rich (for some definition) are being disadvantaged by the tax system & government spending and that the poor are being favoured.
This went on to become a old vs young argument but it could have equally become North vs South or cities vs countryside, celtic nations vs the English, people with children vs those without, those who got free university education vs students now, people who own houses vs those who rent, defined benefit vs defined contribution pensions, public vs private sector compensation etc. The list of gripes is endless.
For me, the correct macro-policy to address imbalances of the types above is to ensure that people keep the vast majority of the money they earn so it can be spent providing maximum utility to each individual. Not having the state direct how it is spent instead.
Once the state has less money to spunk away, then vote buying won't be needed because their won't be a trough to stick snouts (of any kind) into.
"I suggest that the rich (for some definition) are being disadvantaged by the tax system & government spending and that the poor are being favoured."
And I would suggest that you are wrong and, in the main, have it back to front. If somebody is gaining significant advantages from the state, I would expect them to be in the better off section of society.
"why not have a system where nobody can claim that one group is being favoured and some other group being disadvantaged?"
I suggest that the rich (for some definition) are being disadvantaged by the tax system & government spending and that the poor are being favoured.
However, Mark was not talking about the tax system, he was talking about the benefits system. If a penny saved is a penny earned, the tax breaks, which are enjoyed largely by the rich, are benefits just as much as housing benefit etc.
In any case, if we are talking about the tax system, the rich still end up with the advantage. They may pay a slightly larger proportion of their income in tax, however they are still left with a vastly larger income afterwards. Nor is fiddling with the way people vote going to change anything. Once the government is in power, it is an effective oligarchy and will behave as as such for four and a half years out of the five, including shovelling money at it's friends and making sure that they are not taxed too much.
Matt,
old vs young - obvs working age get lower BI than pensioners, in turn today's young will get more when they are older and really need it
North vs South - same BI in each
cities vs countryside - same BI in each
celtic nations vs the English - same BI in each
people with children vs those without - those kids will be paying the pensions of the childless when they are older. And the childless got Child Benefit when they were young.
"ensure that people keep the vast majority of the money they earn so it can be spent providing maximum utility to each individual"
Correct. So don't tax earned income at all. If people want to spend their income on living in a nice house, they pay more LVT.
"Once the state has less money to spunk away, then vote buying won't be needed because their won't be a trough to stick snouts (of any kind) into"
Landowners are quite happy for workers and businesses to be heavily taxed to pay for all the amenities that give land its value in the first place. That's the trough and snouts for you.
And a tax system designed by the super-rich would be just poll taxes. Which is the antithesis of BI and therefore a terrible idea.
There are plenty of countries run by and for the super-wealthy, insiders, oligarchs, sheiks, kleptocrats etc and they are all totally shit. is that what you want?
PL, again, ta for back up.
Poorer people are less likely to vote anyway, so not sure what 'problem' is trying to be 'solved' here. Imported demographic changes are in the balance a good thing as time and again immigrants have been shown to contribute more than native born folk. And with a crashing birth rate, how are we going to provide all the goodies that boomers keep voting for?
One person one vote is the worst system of government apart from all the others.
I really like this system because it would mean that people who don't work wouldn't be able to afford housing in London that I could not dream of.
However, a lot of people would hate it because they would have to move somewhere cheaper.
One question how would this work with council housing? It seems a bit unfair that someone in council housing paying a lot less rent than someone in private gets the same amount.
LF, the only answer on council housing is build enough so that everybody who wants or needs it gets allocated something.
The London v everywhere else issue can only really be solved by having higher council rents in London.
Just imagine we all lived in council houses for cheap rent, we'd have twice as much £££ to spend on actual goods and services that other people produce, so we'd have more people working, more businesses, and more good stuff. It would be a massive boost to the economy!
MW Double bubble with the MW benefits simplification plan, as it would also mean that millions of state bureaucrats could be released to find more rewarding work in real wealth creating private business.
"LF, the only answer on council housing is build enough so that everybody who wants or needs it gets allocated something.
"
I can't see that happening in London to be honest - well not getting allocated where they want.
"
The London v everywhere else issue can only really be solved by having higher council rents in London."
Sounds fair to me. There is more demand there.
" that people who don't work "
Do you mean the retired?
@Bayard
Sorry I should have said people who have NEVER worked or at most only for a few months.
LF "I can't see that happening in London to be honest - well not getting allocated where they want."
True. In Olden Times, they'd build the council housing further out in new towns. The older ones were nice enough, but from the 1960s on, a lot of them were badly designed and connected.
That's clearly wrong, they should be done properly so they are nice places to live for lower earners and pensions. But beggars can't be choosers. An hour bus or train into central London is not a major hardship.
LF, ah, you mean rentiers!
"Just imagine we all lived in council houses for cheap rent, we'd have twice as much £££ to spend on actual goods and services that other people produce" -- but if we all lived in council houses, shouldn't the rent differ between the best places and the worst places, roughly mimicking the "market"? otherwise if I get allocated to a site much more valuable than the cost of thestatutory rent, I would not want to move away, and for the opposite situation, if I get a worse place, I'd rather rent or buy privately? Even if absolute rents were much lower than the "market rents == full site surplus", surely they cannot be uniform accross the country? and how would councils be guessing the right rent level without private rents to observe?
Mark, ultimately, low cost housing in London and other expensive places is subsidising the rich, who can thus employ people to work for them for less. As Brexit demonstrated, if you reduce the available labour for low-paid jobs, then those remaining will demand more, because they can and no-one is going to live in London if they cannot earn enough to pay the rent.
PW, think it through...
A century ago, 90% of households rented privately. So they could have started building slightly nicer council housing for slightly lower rents (and capping private rents and buying up).
Sooner or later, we're all in state-owned housing, crappy stuff, really nice stuff, whatever.
The state can then bump up the rents to 'as much as they can get' (= market rents), pays the normal costs, runs a massive surplus and uses that for some mix of...
a) funding public services that further enhance land values
b) reducing taxes on income (which were very low a century ago, so they would still be modest at worst)
c) paying off national debt
d) dishing it out as basic income.
It's be a Singapore-Georgist system without the faff of an actual 'in your face' land value tax (which is just happily paid over as part of the rent).
B, yes, it's an equation with lots of unknowns.
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