The Corsica Assembly votes for a Negative Income Tax with a notional basic income
On 30 April 2020, the six political groups met through video conference to deliberate on a long-awaited report. Since 2017, an ad hoc committee has been studying the possible advantages and conditions for a Basic Income in the island of Corsica. The report was proposed by Jean-Guy Talamoni, the chairman of the Assembly, who got deeply involved in the preparation work.
The mechanism proposed by the report is inspired by Tony Atkinson’s “basic income flat tax proposal”. * Since 2019 the French tax administration has been aware of almost all of the income of individuals on a monthly basis. Using this data, a monthly tax is computed using a personalized rate. For most of the top 20% of incomes, the tax calculation follows a strict formula: 30 % of the income less 498.52 euros per individual (thus 498.52 for a single person and 997.04 for a couple).
As a matter of fact, the amount granted to the least advantaged in the society – known as the RSA – is almost the same: 497.01 euros for a single person, often supplemented by housing and family benefits. The Corsican project proposal is for a monthly Negative Income Tax to bridge the income tax calculation and the allowance for the poor.
Each month the tax administration would compute the difference between a 500 euros notional ‘basic income’ for each adult and 30 % of the income earned during the past month. This way, all people with a monthly income below 1,667 euros will receive their 500 euros less the tax by automatic transfer to their bank account. Those with higher incomes will automatically be charged monthly by the tax less 500 euros.
The next step of the project is to gain support from the French ministry of Finance to implement an experimental monthly income tax calculation in Corsica.
For many decades, millions of tourists flew to Corsica because of its unique landscape, beaches, mountains, culture and history. The island of Napoleon Bonaparte will certainly continue to welcome visitors and maybe display in the near future the pride of experimenting with the first wholly financed genuine Negative Income Tax with a notional basic income in Europe.
A translation of the Corsican report is available here for international review and comments.
* A.B. Atkinson, Public Economics in Action: The Basic Income/Flat Tax Proposal, Oxford: Clarendon Press, 1995
Marc de Basquiat is Chair of the French Association pour l’Instauration d’un Revenu d’Existence (AIRE)