by Guest Contributor | Jan 5, 2023 | Opinion
NIT, UBI, Guaranteed Income et al, are ultimately functions of our tax, fiscal, and monetary systems. Whatever initialism is used the same end results will be realized. A NIT is the most appropriate way of describing how a UBI etc. will be implemented and ultimately paid for.
The Case Against UBI
The image that pops into mind with UBI is that of a monthly cheque showing up at everyone’s door whether requested or not. Such a program will not come to pass.
UBI, through the magic of the internet and social media, has come to represent for many, the tip of the government’s spear into control over the individuals daily affairs. This negative branding has lost a sizable percentage of “never will buy into the idea” citizens.
The universality of UBI, like government-paid healthcare, is a non-means-tested entitlement with the only caveat being a citizen has to want it and ask for it. In other words just because open heart surgery is “free”, most healthy individuals won’t seek it out or want it. This caveat puts an end to the notion of an unrequested cheque showing up (or worse being automatically deposited into a bank account.) Why? Taxes, clawbacks, and the associated paperwork. A great many will still want, request, and be quite happy to fill out any required slips in order to receive what they determine to be as needed additional income.
How much monthly income is too much income is up to the individual to determine. Therefore, this amount will and should vary between $0 and a maximum (universal) amount, as determined by program administrators. As with most other forms of income, a government provided income will be taxed, and at the end of the tax year, tallied.
The behemoth that is the government’s tax department is not going anywhere anytime soon. The tax avoidance programs that higher income individuals enjoy are not going anywhere anytime soon. Government income is next to impossible to not declare, but there do exist systems of deductions and tax credits that can be used in order to reduce (avoid) tax obligations.
A standard, universally-understood tax reduction device that is built into the income tax system is the basic personal tax credit (usually the first line in the tax deduction portion of a tax calculation form). This “credit” assumes that the tax filer has in essence prepaid this amount, and therefore may reduce this from his or her taxable income. The personal credit reduction is available as a whole number, not an integer, i.e. not allowed to go into the negative and therefore not refundable. Enter NIT.
By allowing the Basic Personal Tax reduction to enter into the negative, lower and zero income tax filers will find a tax refund that will reach up to the total amount of the stated tax credit. (The personal tax credit amount usually hovers around a nation’s poverty line.) These tax refunds theoretically could be returned as a lump sum, but it are more likely and preferably to be returned as a monthly installment. Here we have the basic framework of a guaranteed monthly income program, albeit based on a persons previous year’s situation.
By tweaking the regulations in the tax system, a monthly, taxable prepayment of a refund (based on a zero income for the current year assumption) can be made available to all.
Article by Ward Smith
by Peter Knight | Nov 30, 2022 | News
The Richer, the Poorer charts the rollercoaster history of both rich and poor and the mechanisms that link wealth and impoverishment. This landmark book shows how, for 200 years, Britain’s most powerful elites have enriched themselves at the expense of surging inequality, mass poverty and weakened social resilience. It reveals how Britain’s model of ‘extractive capitalism’ – with a small elite securing an excessive slice of the economic cake – has created a two-century-long ‘high-inequality, high-poverty’ cycle, one broken for only a brief period after the Second World War.
Why, he asks, are rich and poor citizens judged by very different standards? Why has social progress been so narrowly shared? With growing calls for a fairer post-COVID-19 society, what needs to be done to break Britain’s destructive poverty/inequality cycle? The book has two chapters on the way forward and this includes adopting a guaranteed income floor through a modified basic income along with a top-up social dividend paid through a citizen’s wealth fund.
For a review, click here.
by Peter Knight | Nov 17, 2022 | Events, News
UBI Lab Food is organizing an online event about ‘Universal Basic Income and the Cost of Living Crisis’ on Monday, 21 November 2022, from 6:00 to 7:30 PM UK time. The panel will consist of Ian Byrne MP, Lucy Antal (Feedback Global), Mary O’Hara (Author), Penny Walters (Food Poverty Campaigner) and James Anderson (Depher UK CIC). The meeting will end with a general discussion and Q&A session. You can register and find out more here.
by Guest Contributor | Oct 8, 2022 | Research
My name is Jonathan Berg. I have been working as a medical anthropologist doing research with people living in poverty and marginalization since 2012. I currently work at the Erasmus University. In the past few years I have been involved as a researcher with an experiment in the Netherlands which I think might be of interest to BIEN website visitors.
For a period of three years, a group of 14 people under forensic psychiatric care (meaning having a criminal history and a severe mental affliction), received an almost rule-free extra income to find out if taking away their financial stress (scarcity theory) would reduce the amount of public nuisance they caused and crimes committed. All they had to do to keep receiving the money was: 1) not be incarcerated, 2) have an address in the city where the experiment took place, and 3) talk to researchers every 6 months.
We did a longitudinal qualitative study using the case history method to carefully map all developments and thus were able to study and describe the lives of the participants and observe changes in their behavior. When we first met the participants, many of them were living in in cycles of: poverty, debts, violent or criminal behavior, psychiatric troubles, and drug use. With little to no perspective of any improvement, many lacked the ability to see a future for themselves and some saw only death as a way out of their misery.
Since these participants often had a history of substance abuse, there were worries that they would spend the income of alcohol and drugs. However, a negligible amount the money actually was thus spent. Instead, they spent it making their houses more livable, and on food, self care, medical costs, transportation, and social activities. For most of the participants the money meant a world of change and we noted an overall improvement in their mental wellbeing and a decrease in the risk of recidivism.
We saw three ways in which the steady extra income helped reduce violent or otherwise criminal behavior. Firstly, the extra money provided income security. This made them less dependent on undeclared work and crime to make ends meet. Secondly, they had less financial stress, so they could control their impulses better and were better able to cope with setbacks that would have otherwise triggered, for example, violent behavior. Thirdly, they cherished the improved quality of life due to the extra income, and did not want to risk loosing it. Therefore, they were more thoughtful about any behaviors that might come with the risk of incarceration, since that would (temporarily) stop the monthly payment.
Unsurprisingly, during the experiment the participants did not turn into model citizens and we observed many other influences inhibiting them from living in the ways that they wanted. But, as one of the participants said: “Money is not everything, but everything is money”. It seems that for people living in extremely marginalized situations, like forensic psychiatric clients, a guaranteed minimum income could help shape preconditions needed to escape their chains of poverty, psychological afflictions, stress, and criminal or aggressive behavior.
Our research report, including all the inspiring and sometimes confrontational stories of the participants, is currently only available in Dutch. We will work on publishing it in an international academic journal at a later stage, but that will take some time.
The initiative for this experiment was taken by Irene Veldhuis and Wouter Boekweit, who at the time both worked in forensic psychiatric care. The Research was done by Jonathan Berg and Dorien Mul.
Jonathan Berg
PhD candidate
Erasmus School of Health Policy & Management
Mobile: +31 634402726
Email: berg@eshpm.eur.nl
by Peter Knight | Oct 5, 2022 | Events, News
Leading thinkers, politicians and policymakers come together to debate and explore basic income pilots, macro-economic models, the prospects for basic income in developing economies, and political economy of social and economic change.
Join Bristol Ideas for ‘Back to Basics: Income for Everyone?’ – the third conference from the University of Bath Institute for Policy Research (IPR) and Bristol Ideas, supported by the Basic Income Forum.
In recent years, interest in basic income has grown around the world. Basic income is an unconditional income paid to every individual. It is a payment that is not means-tested or made conditional on work-status. Advocates of basic income argue that it represents a fair, simple and efficient way of supporting individuals, in contrast to the complexity and intrusiveness of existing welfare states. Many also argue that automation and the rise of precarious work makes a basic income necessary to replace or supplement wage labour.
The Covid-19 pandemic and cost of living crisis has thrown these issues into sharp relief, as governments around the world have scrambled to close gaps in social safety nets and prevent people falling into poverty. At the same time, treasuries and central banks have mobilized the full range of fiscal and monetary policies to prevent today’s crises tipping economies into deep recessions. State intervention in the economy has expanded, while ideological support for austerity has sharply receded. Arguments about whether a basic income is affordable are being made in a dramatically changed intellectual and political context.
Read more here.
