A ubi is a good idea but

Not this one perhaps:

However, the authors, economists Howard Reed and Stewart Lansley, argue that a transitional system could be created at an annual cost of £8bn, which would leave many means-tested benefits in place. The tax-free personal allowance, currently worth £11,000, would be abolished, and tax rates would rise; but every adult would receive a payment of £71 a week – or £51 for pensioners – and £59 for children. They say such a system would cut child poverty by 45%, and 60% of those in the bottom fifth of the income distribution would gain more than 20%.

That’s actually plunging us all further into the state maw, not reducing its power over us.

41 thoughts on “A ubi is a good idea but”

  1. Not with half the middle East and North Africa on the march for free handouts in the West, its not. Short of building a bloody big wall and arming the populace how would this work in the real world.

  2. I sneeze in three

    So the effective tax rate for someone on £11 grand would go from zero to 13.5% (ish). Good luck selling that.

  3. How would this fare in a democracy? If you have more than 50% are net beneficiaries, the incentive’s to keep voting for a higher UBI

  4. Citizens only….

    Except EU rules won’t allow this. Which would mean……….. :/

    In any case, the Swiss just voted more than 3:1 against a UBI 🙂

  5. @SEvil, the politics of “good” UBI are awful – it’s basically a benefit cap at 10k or whatever – just look at the outrage with the 24k cap…

  6. While I acknowledge there are benefits to UBI, I’m not comfortable with how the more extreme proposals scrap various disability benefits. That is an instance of “needs-based” payment where someone really does need more cash to live a quality of life remotely resembling the rest of us – and isn’t usually in a position to just go out and earn it.

    Would be happy with a lot of other benefits being scrapped though if UBI replaced it. Realistically you are going to need a transitional model even if this isn’t a good one.

  7. Here is one for the wonks.

    Friedman supported negative income taxes instead of UBI iirc.

    Mirrlees showed, among other things, that for “second-best” taxation, the tax rate should always be non-negative iirc (“first best” is lump sum taxes based on ability which is not feasible on practice).

    Is there any way of resolving the apparent contradiction there. What made Friedman so keen on negative rates?

  8. 1. UBI, as Howard Reed imagines it, is just a massive increase in the welfare bill.
    2. Do you seriously think the likes of Howard Reed would ever want to limit this to citizens.
    3. And of course a ubi would obviate the need for a minimum wage, which is why Reed is proposing. .. Except of course he bloody well ism’t.
    4. Reed and Lansley do economics spelt P.O.L.I.T.I.C.S.

  9. “Citizens only….”

    Once they are physically in the country ‘citizens’ can be created with the stroke of a bureaucrat’s pen.

    The article on the BBC site about the Swiss version was interesting. They quoted two people, one in favour, one against. The one in favour talked of poverty, kittens etc. What was interesting was that despite not a single MP supporting it, the BBC still chose a “right-wing” MP to oppose it, with dog-whistle quotes about foreigners flocking to the country. They could have chosen a socialist, but did not. An interesting illustration of their everyday bias.

  10. @Rob, indeed, even the socialistische Partei opposed it. Only the super-loonies were for it.

    Of course, it was all to be paid for with the “Panama Papers” magic money tree….

  11. Realistically the left in this country won’t allow the great mass of benefits to be abolished or even reduced (I agree that getting rid of disability benefits completely would be wrong).

    So the benefits of a UBI are quite academic. Simply wouldn’t work in the real world.

  12. @CS – indeed. To be fair, it’s not even worth the time and effort to look into the economics of it, since the practical politics of it are so awful and unfeasable.

    So I expect it to be on Corbyn’s manifesto for 2020 if he makes it that far.

  13. “While I acknowledge there are benefits to UBI, I’m not comfortable with how the more extreme proposals scrap various disability benefits. That is an instance of “needs-based” payment where someone really does need more cash to live a quality of life remotely resembling the rest of us – and isn’t usually in a position to just go out and earn it.”

    And therein lies the death of UBI – once you decree there are categories of people who get more than UBI, then the ‘trick’ is to get yourself placed in that category. And once decisions have to be made and people categorised, we are then talking bureaucracy, and the inevitable tendency for more rules, more people to qualify, and the slow but sure death of the universal nature of the benefit.

    For example, the biggest single source of disability claims is depression. Would that qualify for extra UBI payments?

    @abacab has the best description I’ve seen of a UBI – a benefits cap at the level of the UBI. Which is about as politically acceptable as a bucket of cold sick for every citizen.

  14. Ironman

    I raised the question on who would be entitled to UBI before I was barred from TRUK with Reed and his response was ‘good point – we haven’t worked out yet exactly who would be entitled – we envisage some kind of mutual agreement’ Apparently the governments of Eritrea and Libya (for example) will be able to fund the hordes of Britons looking to work in Asmara and Benghazi…….

  15. Van Patten

    To be fair the hordes of Brits currently working in Benghazi (known colloquially as either ‘special forces’ or ‘mercenaries’) are quite well funded.

    But we digress.

  16. @Jim, I thankee for the kind words.

    The funny thing with UBI is that, under EU rules, it would have to be paid to EU citizens resident in the UK. Which means, under the way the UK applies the EU freedom of movement rules, that anyone fresh off the tunnel or the ferry with an EU passport could claim it.

    And then anyone’s 17th cousin 8 times removed brought in from Farawayistan as a “dependent” under family reunification would have to have it too.

    And it goes to prove the Libertarian point that you can have a generous welfare system or free movement of people, but not both.

    And that you can in principle have a UBI (ignoring the impossible politics of it) or EU membership, but not both. Although I bet that doesn’t bother the lefties who want to have cake and eat it many times over…

  17. To re-iterate, “good” UBI would only work if it absolutely did result in the withdrawal of all other able-bodied benefits. All of them. And was taxable to get it back from those who earn well.

    Cue the lefties screaming about rich people being given free money, poor people being ethnically cleansed from London and other expensive places to live, “benefit cap”-like hysteria on steroids once it’s got through their thick skulls that this is what it means in practice.

    Make no mistake about it, the people (on the Left) pushing this see it as an extra benefit more or less within the existing framework (UBI + housing benefit + child benefit + whatever…), not as a let’s scrap the benefit system and start over, which is the only way it could work economically.

  18. abacab

    And even if we did get rid of the other benefits, we would probably still need to have disability benefits – which would instantly see a rise in “the disabled” – and much screaming if we attempt to try to limit it to those really need the money – as we just saw with PIPs. I no longer give to disabled charities after their disgraceful behaviour on the PIPs.

  19. It’s not a UBI if it’s taxable. You are back in the situation where those who fund other peoples’ free money through their taxes don’t get the full amount of free money themselves. And, of course, that is exactly what will happen. Over time, the ‘rich’ will not get UBI because ‘they don’t need it’ and it would be wrong for them to receive any of the money that has been taken off them. At the other end of the spectrum, certain groups will have their UBI enhanced because they are ‘disadvantaged’.

  20. @DocBud – indeed. And then you end up with a fustercluck that’s not exactly so different from what we have today (particularly as enough noisy people think the tax free allowance is a “subsidy” already that “the rich” shouldn’t benefit from…)

  21. I hope this is the referenced report. In neither of the two given options do we see the benefits, KISS, of UBI appear. This is a complete fail. I can’t even use it as a source. One important problem is the skew towards poor people with kids. One look at their pretty graphs shows we can expect an upturn in welfare babies, something we really don’t want.

    At this point any system that does not end up in a standard payment to all funded by a tax on all, non-UBI, income should be thrown out. Further the tax rate needs to be the same for any income, different rates will lead to the rich getting exemptions and not paying their fair share. Any final system that maintains means testing is not worth doing.

    If anyone want me to give an overview of how the US could affordable set up a UBI at the poverty line I am more than happy to keep typing.

  22. I disagree with abacab about UBI being taxable, we would have to raise the benefit amount and overhead would just eat up the tax revenue.

    I don’t see people who don’t work being forced out of London as a problem. The choice is move somewhere you can afford or get a job. Even with no minimum wage Starbucks will have to pay enough to make it worth someone’s time, I could even see barista wages going up as the layabouts move somewhere with a lower cost of living.

  23. As always, the devil is in the details. The biggest obstacle in the US is our healthcare system. Unless we can get our costs down, even recreating the NIH would be an improvement, UBI is affordable.

  24. And remember, this is a bad UBI, with means-tested benefits surviving.

    It’s transitional, because a simple abolishing-and-replace will leave the poorest worse off.

  25. Well then, they are effectively means tested. The whole point of the ubi is to put a flat amount if money in everyone’s hands. Tax it and, well, you haven’t. And then you have the bureaucratic nonsense of our employers adding the ubi to our salaries and wages before alculating PAYE deductoo s; robbing Peter to pay Paul.

  26. “A ubi is a good idea but…”

    Yes Tim, and a “carbon” tax is a good idea but…

    And the “but” is always the reality of human nature; i.e. cunty politicians and other parasites using the “good idea” as a baseline for further exploitation.

    Only ideas which accept and incorporate the realities of human nature (free market competition, checks and balances, etc) will succeed. Others are mere fanciful wank that have the cunties rubbing their hands with glee.

    But, hey, religious belief is probably in our genes.

  27. “different rates will lead to the rich getting exemptions and not paying their fair share.”

    Different (progressive) rates are what we have now, leading to the ‘rich’ paying disproportionately more tax than those on lower incomes. A single tax rate would be much fairer and would remove the incentive for the majority to vote for a high top rate tax that they will never pay.

  28. So Much For Subtlety

    ukliberty – “It’s transitional, because a simple abolishing-and-replace will leave the poorest worse off.”

    It will leave them financially worse off. The point about a UBI or a NIT is that it will encourage them to work and so leave them better off in any number of ways even if they end up with less money.

    Again the solution is not a UBI but a poll tax. If the poor are forced to earn, they will earn. If they are paid not to earn, they won’t earn.

  29. DocBud,

    When Mitt Romney pays a higher effective rate than I do then it is progressive. I’d be happy if he paid the same rate I do. I’m not happy that someone with so much more pays a lower percentage of his income than I do.

  30. I look forward to a UBI so me and mine can ‘fine tune’ the rules.

    Ah yes, a fountain of corruption, dripping, gravy from the carcasses of roasted long pig tax payers, the grease running down my jowls as I chew their crackling skin.

    What, wait, where was I, oh yeah, in Richard Murphy’s daydream.

  31. Liberal Yank,

    Personally speaking, I have always believed that there should be a cap on what an individual pays in tax and I’d reckon $1.9 million would be above that limit. Surely you’ve done your bit if you tip $1 million into the exchequer? On top of the tax, he and his mrs donated $4 million to charity. To me, that is punching well above your weight.

    I consider the problem is that those of us on high incomes have no choice to pay high tax rates to subsidise those who are punching way below their weight. I’m certainly not subsidising the likes of Mitt Romney.

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