A Citizen\’s Income

Well, yes, like the idea but…..

This new social economy will challenge liberal market capitalism and its ideology of neoliberalism. It will introduce a citizen\’s income (CI), an unconditional, non-withdrawable income payable to each individual as a right of citizenship. To meet minimum income standards, it will be worth £10,000 per annum. A partial citizen\’s income to incentivise work would be £4,600, the same as children\’s CI.

For the what, 48/50 million adults in the country that\’s £480 billion/£500 billion.

Around and about the total current tax take. I don\’t really see us either increasing tax sufficiently to cover this (taxing \”the rich\” won\’t manage it. The top 10% of familes only have some £60 billion of post tax income.) nor doing without all the things like the NHS etc that tax currently pays for.

12 comments on “A Citizen\’s Income

  1. Unless that plan for a CI comes with massive privatisation of just about everything (bar Defence?) it could only work if what was given with one hand was taken with the other without much scope for avoiding it. All that needs to be afforded is the difference.

    If it doesn’t come with the privatisation it has to be a con?

  2. £10 000 a year for doing nothing looks pretty good. Especially if you have a partner — there’s £20 000 a year for doing bugger all. Or you and a bunch of mates living in a share house — £50 000 for the household! A lot of people would be tempted to say “Screw work” and just have a good time — £50 000 a year will buy you and your buddies a lot of good times.

    But such an attractive scheme will attract more and more people – esp. young people — into taking the basic income and choosing not to work (were I were 18 in such a scenario, this is what I would do). So the scheme costs more and more, while the tax intake needed to pay for it decreases as there are less workers, and it gets harder and harder to cover the costs. So the remaining taxpayers have to be squeezed even more, in which case the taxpayers either riot, or more of them just give up and join the spongers, which means the scheme becomes even more unfeasible, and the whole thing becomes a positive feedback loop, which only ends when the whole thing either financially implodes, or the taxpayers take to the streets.

  3. It’s amazing how some people can lecture economists about how unrealistic their models are, lecture banks about how foolish they are trying to model risk etc. and then turn around and endorse ideas based on the most witless economic analysis you could imagine.

    I hope I’m not being unfair – I have had a quick look at the article in the citizensincome.org newsletter the author claims shows the plan is affordable. I can see no attempt to estimate how labour supply decisions will be affected by every adult receiving £10,000 pa, nor how labour supply decisions will affected by changes to the tax rate. Nothing about what’ll happen to prices either. As far as I can tell, they’re taking the national accounts, and presuming you can carve it up as you like, holding GDP etc. constant.

    I know some advocates of the CBI think that by solving the marginal taxation problem when coming off benefits, it will increase the labour supply. I think there’s a large probability they are completely wrong about that, and that people, who are currently working but would choose not to work, would dominate. That is, if prices stay where they are and £10,000 stays worth £10,000.

  4. Halve the figures and it makes alot more sense. £5K per adult and perhaps half for kids. Cost £250bn. Given we spend approx one third of public spending on pensions and benefits, which would be circa £200Bn alone in 2009, you’re not a million miles from squaring the circle. A few cuts of pointless other spending and bingo.

    Plus at£5K per person its enough to subsist on (ie not starve) but not enough to live too easily that you wouldn’t want to work. A family of 2 adults plus 2 kids would get £15K before any earned income. Probably about what they get now in benefits, if neither worked. But chances are people WOULD work as well because they would keep more of their extra money than they do now in the benefits trap.

  5. I’m not sure how politically popular scrapping pensions and replacing them with a CBI which gives kids half would be with pensioners.

    I’m now wholly convinced by Smidgeon’s point – just adding more and more people to a household to get larger and larger CBI grosss amounts is not really an argument. However I do imagine we might see a lot of people spending time abroad.

  6. I agree with Letters and Jim. If the current benefits bill was turned into a basic income, then it wouldn’t cost any more. Since the money would be spread around more people, people currently getting benefits would get *less money* *and* not be in the benefit trap. So it wouldn’t decrease work.

  7. Charles Murray suggested (in In Our Hands) giving each US citizen (I think) $10,000.

    The other side of the equation was that that would be it – no other benefits, and it you pissed it up the wall that would be down to you.

    If you fathered children and elft them, a lot of the money would stay with the child.

    Very interesting and well worth reading.

  8. Brian,

    That was exactly exactly the question that jumped out at me. If the fractional part is set at 3/5, then I am sure there are lots of Americans eager to tell you, some of them will even tell you correctly.

  9. Matthew, I think you missed my point (as far as I can understand your brief comment). You might not choose to not work if it only leaves you with £10 000, when you have to pay for rent, etc. with that. But if you pool your resources with your mates, that leaves you with a lot more money to spare, and then the non-work option becomes more attractive.

    My basic point is that it makes not working too attractive. And that may not be sustainable for the economy, esp. if it’s already costing us the current total tax intake. I’m not saying it would definitely crash the economy and cause big divisions in society, but I can’t see it ending happily. Anyway, it’s too big a risk to take.

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