The principle is simple. Every qualifying person, without exception, in the UK would be paid a basic income by the state. This would be designed to prevent poverty. So, it would be greater than the current inadequate old age pension, and replace it. And the payment would, when joined with the payment due for each child (who would have their own entitlement) ensure that no family would live in poverty (defined as being income of less than 60% of the median wage).
This would be financed by giving a much reduced tax personal allowance (maybe just £2,000) and more progressive tax rates than now ending at a top rate of maybe 70%. Do however remember that everyone, including those on these top rates of tax, would get this universal basic income, tax free.
60% of median income is £12,600 a year. There’s 65 million people in the country. This would cost £800 billion or so.
That’s larger than the current size of the entire government. It’s also about 50% of GDP just on its ownsome for this universal “basic” income.
Sorry, Britain just isn’t rich enough to pitch a universal benefit at this level.
Just as a very broad brush the govt currently spends around 40% of GDP. About half of this (very broad brush) is on government and its services etc, half on income redistribution. That half on income redistribution gets subsumed into the basic income, but that other half on government itself does not.
So, government now handles 70% of GDP. I can’t actually think of anywhere at all that has managed to tax that much of GDP.
Which brings us back to what sensible people like Chris Dillow have been pointing out. We can have a universal *basic* income out of roughly the tax take we’ve got, perhaps a small rise in it. But that basic income has to be *basic*, around the current pension guarantee.
How odd that an accountant cannot do maths. Or sums even.