Soldato
Does anyone foresee a London weighting to cover higher rents there?
Universal basic income
- Thread starter terley
- Start date
No, I would see a rework of social housing with a percentage of income based rent and no guaranteed tenure.
Location is not entirely a choice for people who work, who have to balance desirability with cost. Why should those who don't work not have the same responsibility?
UBI will have to be revenue neutral. While there can be some significant savings in reducing some benefits/pensions, tax will have to increase to cover some of the short fall.
So whether you are a winner or looser will depend on your exact financial situation. Tax might go up 2-3% for example.
A lot also depends on the level of UBI. At the low end then reductions in benefits and pensions will cover most of the UBI costs, but this is not really the goal of UBI and many of the advnatages come about when UBI is a little higher.
UBI and other benefits are not mutually exclusive. It could very well be the case that you have UBI + housing benefits + child support for example.
It all depends what level the UBI is at. If you planned to removed all benefits entirely then you would have to set the UBI much higher, so then the question is somewhat moot.
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Firstly: Anyone who claims that the tax code is complex because of multiple tax bands clearly has absolutely no understanding of taxation. The UK tax code is something like 10,0000 pages long, with the separate tax bands taking up the whole of 2-3 pages. The US has something like a dozen tax bands, creating a much smoother function which has lots of benefits when going through pay rises, receiving bonuses , calculating deductions etc. It would be great if the UK moved to a more continuous function,; start tax at 15% and increment it by 2% each band to you hit the current 45%.
Secondly: you are on your own thinking there is a more issue with multiple tax bands. Countless philosophers and economists conclude otherwise, and the reasons are quite obvious. Money doesn't have a linear value for starters, and there is already a moral problem that salaries are vastly different despite people working similar hours and just as hard. Then there is the entire debate around the existence of taxation in he first place, but basically if you want to live and work in the state then the states' tax rules apply in absolute.
Flat rate doesn't replace the current benefits system, not without a significant UBI, but these are not necessarily linked. Current tax already treats everyone equally (all people earnings the same with the same deductions pays the same tax) and there is no moral case for avoiding taxes. The problem with flat tax is it creates a system that is extrmely sensitive to the tax threshold, and if implemented you will find a lot more people not paying any taxes what so ever, many more people paying at a higher tax band, and the wealthiest will carry on trying to avoid taxes. E.g. you set the tax free threshold to 20K and everyone above that pays the 45% tax rate. Someone that used to pay a little tax on their 18K income now doesn't pay a penny, their friend who earns 24K finds the selves with a very steep marginal tax rate, and they find them selves simply working less hours because anything earned above the 20K sees a large deduction from their paycheck. If instead you had 20 different tax bands then the change in marginal rate is so gradual it is invisible.
Here is a good article on flat tax: https://www.wsj.com/articles/SB10001424052970204358004577032311610518008
In regards to complexity, the tax code is not complex due to the levels of taxation, it is complex because of the definitions of income and permissible deductions (short term capital gains, long term capital gains, child tax credits, mortgage interest deductions, state sales tax reductions, capital losses, dividends, royalties, medical expenses.
Corporate tax is basically flat, and I have yet to hear anyone say that corporation tax is simple.
In regards to complexity, the tax code is not complex due to the levels of taxation, it is complex because of the definitions of income and permissible deductions (short term capital gains, long term capital gains, child tax credits, mortgage interest deductions, state sales tax reductions, capital losses, dividends, royalties, medical expenses.
Corporate tax is basically flat, and I have yet to hear anyone say that corporation tax is simple.
well it isn't really moot, if you wanted to set it high enough to give an equivalent maxing out the benefit cap in greater London then you'd inevitable be overpaying people in other parts of the country... not to mention it wouldn't really be affordable
if however you want to keep other benefits then it is a bit of a different version of UBI to that which is perhaps being envisaged by some in this thread, you don't then get a simpler system but rather you're introducing something new on top of all the other benefits etc.. I mean aside form changing how people are taxed perhaps by removing the tax free allowance thanks to having UBI or essentially some sort of negative income tax you're still potentially keeping everything else
Or perhaps you simply sort out housing as well.so it's not an issue. Plus in a future with ubi. Chances are people would spread out more. No need to work if you don't want to. So no need to be in London.
http://www.telegraph.co.uk/business/2017/10/23/universal-basic-income-may-hurt-seeks-help/
OECD study re: what I mentioned earlier, we already dish out substantial benefits in the UK, introducing UBI would leave plenty of people worse off.
Central London will likely continue to be expensive for the foreseeable future regardless of increases in telecommuting etc..
OECD study re: what I mentioned earlier, we already dish out substantial benefits in the UK, introducing UBI would leave plenty of people worse off.
Central London will likely continue to be expensive for the foreseeable future regardless of increases in telecommuting etc..
You could have different weighting based on local living costs. If UBIU is to replace all benefits then yes, there owuld be much more expenses and taxes would have to increase quite a lot. Which is why a more realistic version is a lower UBI but maintaining some of the existing benefits.
Some of the ideas people in this thread have are completely ridiculous though, so that isn't surprising. Quite clearly, a system with UBI that left millions of the poorest destitute would be a monumental failure so aren't really worth talking about. It is an inevitability that any useful UBI will benefit the poor, and will likely have a cost to the highest earners.People having a wet dream about screwing over the poor even further are living in a fantasy land.
UBI can be used to replace some of the existing benefits, it certainly coudln't replace all of them without a substantial cost. That still means you can simplify some aspects of the system. One of the main benefits of a low level UBI is to prevent benefits traps, which will still exist if there is some level of benefits on top of the UBI. For example, Job seekers allowance could be removed, thereby people are incentives to work at least part time without the feeling that they are loosing their benefits
But JSA is currently paid to relatively few people as a % of the population... even just dishing out the equivalent of JSA to every adult in the UK is going to come at a significant cost. I doubt any savings from not having to check up on the small % of fraudsters is going to come anywhere near the extra expense of dishing out the equivalent amount to everyone. People are still going to want help getting back into work etc.. job centres etc.. would likely still have a purpose, you'd perhaps just eliminate the mandatory regular meetings for JSA recipients.
That is under the assumption of a revenue neutral UBI scheme, which clearly wont work. UBI will have to be paid for by increased taxes on the wealthy, with some offsets from current welfare
JSA was just one example, you can also obviously reduce disability and pensions by the UBI amount. Pensions are by far the largest part of the UK welfare and UBI can be a direct replacement. Depending on how high the UBI there may need to be a suppliment, or perhaps UBI can increase for those beyond retirement age etc.
No one said UBI would be cheap and it is completely wrong to think UBI is a replacement for all welfare and benefits. If UBI was a complete replacement then it would be massively expensive and require huge tax hikes which seems unlikely,. Instead, when seen as an addition to the current welfare that is at least partially paid for by some reductions in certain areas of benefits like pensions, then we see a much more viable and functional system. Ultimately it needs to extend the transfer of wealth to the poor, not the inverse.
Soldato
What will be the benefits to those who pay more tax as a result?
Soldato
Personally I think we are at a point in time where everyone on the planet should expect to have as a bare minimum:
- A roof over their head
- Food and water
- Access to healthcare
- An internet connection
But I think if you have to rely on the Government or Council to have any of those things, you do so on their terms not your own (specifically housing).
Soldato
Please can somebody elaborate with what the changes are?
Caporegime
More loopholes and top level accountants jumping for joy.
This is all hypothetical, so it would depend on what changes you image would happen. UBI can be very different depending on the amount.