A new film is hoping to answer the question of whether life itself should be subsidized. Directors Sean Blacknell and Wayne Walsh have produced a new documentary “The Cost of Living” which discusses the mental and physical burden placed on those with unstable incomes and whether basic income is the right remedy.
The film interviews many prominent basic income scholars, such as Guy Standing and Barb Jacobson. It is focused on the issues specifically facing the United Kingdom, where there are “3.5 million people in ‘in-work poverty.’” With the arrival of COVID-19, the film-makers argue the discussion about basic income is even more pertinent than ever.
The filmmakers expressed that many of the current programs in the UK are failing to rise to the moment with extreme distress around the country, such as the universal credit which they called “dehumanizing.”
“You have to prove you are deserving,” Blacknell said.
Steve Botrill, the deputy chief executive of Urban Outreach Bolton, is interviewed in the documentary. He said that much of the current stress on the poor in the UK is due to reductions in benefits and more stringent conditions placed on social services.
As a result, Botrill said that this is a cause for the “astronomical” growth of food banks in the UK in recent years.
In the documentary, it is argued that much of a person’s wealth is dependent on luck, such as where a person is born.
Initially, the film was going to take a broad look at social programs, but narrowed to basic income as they moved forward. In the long-run, the filmmakers noted that this discussion around basic income will continue to be important because of the changing economic and technology trends around the world.
However, the filmmakers emphasized that after interviewing many scholars they do not believe basic income is a “panacea” on its own. By interviewing a wide range of viewpoints, they hoped to create a “more nuanced take” on basic income.
With new spikes of COVID-19 around the world, Wayne and Blacknell hope the film can reach a wider audience to facilitate this debate. It is now available on Amazon Prime for streaming.
In Canada, certain conditions apply to the unconditional and not everyone qualifies for universal benefits. [version française]
The Basic Income Earth Network (BIEN) defines a Basic Income as a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.
I do not think this idea will ever be fully implemented in Canada nor anywhere else in the world. This causes me little concern because UBI will forever exhibit the traces of its origins in the very imperfect social safety net we have today and have always had. Human institutions evolve from common ancestors: two very different policies are still linked by evolutionary history. A horse’s leg corresponds to the bones in our middle toe, not the same function at all, yet equivalent from an evolutionary point of view.
There are no social programs in Canada that are universal. Some condition always applies to reduce the amount and eventually eliminate the benefit completely. This is quite apart from any discussion of whether the program is sufficient, necessary, feasible or even appropriate.
When Canada implemented income tax in 1917 one of the features of this temporary program was the personal exemption: $1,500 for singles and $3,000 for others, $24,500 and $50,000, in today’s dollars. While this benefit was cash, it was hardly a transfer, since you just got to keep some of the money you already had. It was individual, a couple getting twice the benefit of an individual. It was unconditional in the sense that there were no strings attached, no work requirement, no declaration of any means (property or possessions) other than income. It was universal, except that the amount depended on revenue. The 4% of earnings on the first $1,500 dwindled to nothing if you had no income.
Fast forward 99 years to when the Canada Child Benefit (CCB) was introduced in 2016. Today we distinguish between reimbursable tax deductions and non-reimbursable tax deductions. The personal exemption is one of the later. Benefits only pay down your tax burden. You get no benefit if you pay no income tax. The Canada Child Benefit is one of the former and is a bona fide Basic Income, even if certain conditions apply.
The Canada Child Benefit (CCB)
The Canada Child Benefit is paid out even if no income tax is due. It is clearly a cash transfer.
Is the CCB universal? It’s paid to all families with children. Or is that all children with families? Of course you can’t send a monthly cheque to a toddler. The caregiver receives the money with no strings attached. When Universal Basic Income is distributed to all adults, its universality is never questioned in proposals such as BIEN’s or Andrew Yang. Is restricting the benefit to children less legitimate because they are dependants? In fact, children “without families,” that is “maintained by an agency” also receive the benefit. The amounts are identical; just the name of the program changes. I think that this settles the question: it is a benefit for children, not a benefit for families with children.
Is the CCB individual? If you consider that it’s paid to families, then no. If, however, as I argue, it benefits individual children and is just turned over to their caregivers, then yes.
Is the CCB unconditional? All social programs have some condition which excludes some recipients or reduces benefits. Universality and unconditionality are inextricably linked.
Both arise from a desire to allocate or distribute ostensibly scarce resources according to the opposing principles of fairness and efficiency. The issue is presented as a trade-off: Either the quantities are sufficient to fulfill the needs of the recipients and not everyone receives the benefit or everybody receives a diminished allocation and no one has enough.
The application of such conditions which eliminate recipients or slash benefits is what is referred to as means-testing. This exists in Canada. The welfare system is the classic example. Benefits are cut dollar for dollar if your earnings exceed a paltry threshold. For example, in Quebec, welfare provides $690 per month: 29.6% of what it takes to avoid poverty. Any earning above $200 is deducted 100% from your cheque. The welfare system intrudes into your private life: a couple receives 29% less than two individuals, so undeclared roommates are committing fraud, as far as the authorities are concerned.
Another way of distributing scarce resources is what is known in Canada as income testing. Benefits depend on how much revenue you declare on your income tax returns, which brings us back to the personal exemption of 1917.
You may not agree that this taxation feature qualifies as an embryonic social program and find it far-fetched to call it a cash transfer. Identity of form and function is not required to establish evolutionary kinship.
Means-Testing vs. Income-Testing
Means-testing and income-testing certainly have the same ancestor: the need for a fair and efficient distribution of putative scarce resources. In form they are virtually identical yet in the Canadian context, their function could not be more different.
Means-testing is a human activity whereby a bureaucrat gathers information on helpless and vulnerable people to determine how little they deserve. It is directed specifically at lower-earning people to make sure that they don’t receive more than they deserve. It is an evil system in which, if you are not destitute enough, requires that you divest of your property or savings regardless of your interests. Means-testing is a social policy tool reserved for those living in poverty and designed to punish them for their condition.
Income-testing is an algorithm which applies in the same way to everyone based on tax returns. The testing part of income-testing is achieved through tax self-reporting. Canadians don’t consider filing your income tax as an invasion of their private life. In any case, the government already knows how much tax you’ve paid because your employer turns over your tax deductions to the authorities every month and has been doing so since 1943. Revenue Canada doesn’t know or care what you do with your take-home pay nor tell you how to spend it. Unlike with means-testing, there is no stigma attached to phasing out benefits for the rich.
No one questions the practice of taxing back from the rich funds equivalent to the Canada Child Benefit from which they derive no important advantage and thereby recover some of the cost of a program which is immensely useful for everybody else. Conscientious objectors to means-testing will insist that even when this clawback is done specifically for the purpose of recouping UBI payments, it does not infringe on the principle of universality because it is done in separate operations, the right hand not knowing what the left hand is doing. In Canada, we tend to view this as an elaborate and unnecessary fiction. Covering up the mechanism does little to hide the process, which serves no other purpose than to claw back UBI from the rich.
In the FAQS page of BIEN, under the caption: “WHY PAY MONEY TO THE RICH WHEN THEY DON’T NEED IT?” we read:
“It is efficient to pay the same level of income to everybody of the same age and then tax it back from those who don’t need it. The alternative is to means-test incomes so that only those who are poor receive them: but that results in complexity, stigma, errors, fraud, and intrusive bureaucratic interference in people’s lives.”
First of all, “those who don’t need it” is a very unfortunate choice of words. There is no more reason to ask the rich than the poor to justify their needs, as means-testing does. Only the poor bear the brunt of the evils of means-testing. “Taxing back,” never questions your needs. That is all that “income-testing” is.
This distinction between means-testing and income testing is not hotly debated within BIEN: Most mainstream member philosophers and economists dismiss it out of hand, considering both concepts violations of the principles of universality and unconditionality. I can’t accept this argument because it is based on concepts which aren’t actually found in the real world. At least not in Canada!
UBI vs. NIT
Another thorny issue in the Basic Income community which may seem quibbling to the un-initiated is the distinction between Universal Basic Income and the Negative Income Tax. Every party to the debate agrees that in terms of net income in the pocket of the beneficiary, these measures are identical. Also, their net cost to the state is also the same. Finally, both programs can be engineered so that the beneficiary is unable to tell the difference. Doesn’t that make all discussion of their relative merits moot? Perhaps I am missing something. Let me quote Davide Tondani in full:
From the distributive point of view, the constraint of equal spending leads to distributive outcomes where NIT is effective at the bottom of the distribution, while UBI also distributes income to the middle incomes. This seems to suggest that in NIT, a minority of “poor” citizens are financed by people with middle and high pre-tax income. In UBI, a minority of wealthier citizens redistribute part of their income to people with lower incomes. Greater efficiency in fighting poverty by NIT and the presence of high marginal tax rates on low incomes reduces the labour supply formed by the same individuals. On the other hand, in UBI the lower benefits for poor people associated with lower marginal tax rate provide an incentive for low-income people to participate to the labour market. Preference for NIT seems to favour redistribution towards a wider range of low-income people. In the absence of a legal constraint to accept a job offered by the government, no personal effort in terms of a more intensive labour supply is required from these individuals. Opposite to this is a model of “residual welfare,” UBI on the other hand is less efficient in raising low incomes, but is more sensitive to inequality and social inclusion, and supporting labour supply and citizenship.—page 18
Tondani comments further on how identical outcomes can arise from divergent aims:
“Although NIT and UBI policies tend to lead to very similar, if not identical, distributive outcomes there is great epistemological difference between the two. Treating them as equal can thus lead to the risk of very real confusion about the real distributive aims of the policy maker.”—Tondani page 44
So there is no confusion about outcomes, only the aims of the policy-maker. I don’t see why motivation is relevant when outcomes are identical. If the road to hell is paved with good intentions, it might as well be paved with bad ones.
Shouldn’t good policy even backed by bad intentions be preferred over bad policy supported by good ones?
Scarcity vs. Policy
A final point about scarcity. The paucity of resources is often presented as a fact. It’s actually a policy decision, a choice of priorities.
A frequently heard argument is that if you give resources to those who don’t need them and provide free services for those who can afford to pay for them, you are depriving others who don’t have the resources and can’t afford the services. This argument only works if the resources and the services are scarce. This is not a question of objective fact. Scarcity is a question of political choice, the setting of priorities. For example, public housing could be more abundant if battleships and fighter jets were scarcer.
It is not often that rationing of a resource is unavoidable.
Conclusion
What social programs are, the intentions behind them, and their history is of little importance in comparison to what they do.
I have argued that the Canada Child Benefit is a Canadian-flavoured Basic Income which is as close as it gets to a UBI in the real world. It is universal because all humans go through childhood, it is individual because strictly based on headcount and it is unconditional because you don’t have to do anything special to deserve it, and you can do with it as you please, no questions asked. Furthermore, it is a regular, predictable, cash transfer paid monthly, for which you can sign up before you are even born. Does it deviate in some way from the ideal, orthodox form of Basic Income? Of course! Where do we find ideal forms in the real world?
Some will claim the Child Benefit is not important as a putative example of a UBI or will argue that the Child Benefit is not close enough to being a UBI to qualify as such. How close is close enough? What constitutes important? There is no objective way to decide these questions. The answers are not falsifiable.
Will calling the CCB a Basic Income hurt the brand and confuse people about what a Basic Income really is? The confusion has nothing to do with the shortcomings of the Canada Child Benifit as a Basic Income. Every example helps promote the concept, regardless of deviations from the ideal. And the more familiar the public is with Basic Income, the more likely it will spot the points to improve in existing implementations such as the CCB. It is the scarcity of concrete examples to point to that makes it difficult for people to establish connections. The more examples you find, the better people will understand. Far from confusing people, a consistent terminology with variegated examples will help crystallize the concept in peoples’ minds.
Basic Income is not something that can be summed up in a definition, it is a living thing, constantly adapting to a changing local environment. It is less man-made than responsive to conditions. Certain conditions apply.
By: Carlos Alvarado Mendoza y Jonathan Menkos Zeissig Translation: Julio Linares The Spanish version of the article can be found here.
Recently, the Central American Institute for Fiscal Studies (Icefi) proposed for Central America the implementation of a universal basic income (UBI), seeking that the States of the isthmus have a minimum guarantee of social protection, while contributing to counteract the impact of the Covid-19 pandemic. A UBI, accompanied by other public, social and economic investments, would accelerate the fulfillment of the 2030 Agenda for Sustainable Development and, by proposing a change structural in the welfare and economic growth model, could be the basis for the discussion of new social, political, economic and prosecutors in Central America.
Central American governments have implemented actions in order to contain the spread of the virus and reduce the impacts on people’s health and economic activity. However, these states have faced a complex scenario, although to varying degrees in each country, as the pandemic has exacerbated structural problems mainly related to the lack of equity in access and care of public health systems, the weak health care system and social protection and the low capacity to generate formal employment and productive transformation, which has as a consequence lead to high levels of inequality and poverty. Indeed, prior to the crisis, 45 out of every 100 Central Americans (about 22.5 million people) lives in conditions of poverty; furthermore, 82 out of every 100 poor Central Americans lives in Guatemala, El Salvador, and Honduras.
According to estimates by the Institute, the current crisis could cause the loss of up to 1.9 million jobs, and induce a significant increase in general and extreme poverty. Especially in Guatemala, El Salvador and Honduras, the current crisis could add at least 4.9 million people to poverty, according to data from the Economic Commission for Latin America and the Caribbean (ECLAC), which would further erode the weak social fabric of these countries of the region (Economic Commission for Latin America and the Caribbean (ECLAC), 2020, “Latin America and the Caribbean in the face of the COVID-19 pandemic: economic and social effects”, Special Report COVID-19 No. 3). Among the main measures that have been implemented by most Central American governments to limit the impact on the population, in terms of ensuring income, food security and basic services, particularly for vulnerable groups, are: food delivery; the creation of new monetary transfers; suspension of payment for basic services (particularly water, power and telephone); and, the increase in the amount of previously existing monetary transfers. Likewise, different types of protection programs have been put in place for workers in the formal sector, among which are teleworking, paid absence from work, unemployment insurance, reduction of working hours, among others. Additionally, additional direct support has been provided to individuals and families, consisting of credit payment facilities, support for workers in the informal sector, among others.
Although the measures adopted by the governments of the region are limited and of a temporary nature, they indicate the urgent need to implement permanent actions, from a long-term perspective, that make it possible to guarantee the gradual reduction of poverty in the countries of the region until they are eliminated and the rights of the people by strengthening States through the universal provision of social protection that allows rebuilding the social fabric of those countries.
Faced with the above, the Icefi has urged the Central American States expand and strengthen their social protection systems in a way that protect the population, prioritizing traditionally excluded groups and the most vulnerable, the economic and financial damages derived the crisis and accelerate the process of economic recovery. To achieve these objectives quickly and effectively, the Institute proposes the implementation launch of a universal basic income (UBI) that eliminates extreme poverty and significantly reduces general poverty. In its III Report Central American fiscal policy ―whose first chapters were published in July―, the Institute has calculated the costs and effects of the application of a universal basic income.
For the implementation of a UBI, the Icefi proposes to assign a sum monetary to each member of society, equivalent to the amount associated with the international threshold of extreme poverty (USD 1.90 per day in parity of 2011 purchasing power). From that account, you would also be paying the achievement of the 2030 Agenda of the Sustainable Development Goals (SDGs), in particular goals 1, 2, 3, 5, 8, 10, 12, and 16. The application of a UBI has an operational simplicity that pays to its rapid execution, avoiding creating more bureaucracy, opening paths to corruption and keeping beneficiaries in the trap of poverty. By being assigned unconditionally, it would allow not only to eradicate extreme poverty, decrease overall poverty, reduce inequality in income distribution, increase levels of economic activity and create the conditions for new jobs, but also the measure should provoke the modernization of fiscal policy and rebalancing necessary of responsibilities between citizens, companies and the government. From that account, when proposing a structural change in the welfare and economic growth model, UBI could be the basis for discussion of new social, political, economic and fiscal pacts in Central America.
The initial estimates made by the Institute suggest that the annual investment required for the implementation of a UBI ranges from 1.2% and 7.5% of GDP for the six countries of the region, Honduras being the country that would require more investment due to the size of its GDP and the number of inhabitants of the country. Similarly, Nicaragua would require an investment of approximately 5.8% of GDP; while in Guatemala and El Salvador, investment necessary would reach between 5.0% and 5.3% of GDP, respectively. In contrast, the countries that would face the least fiscal pressure to implement this policy are Costa Rica and Panama, whose investment would be around 2.2% and 1.2% of GDP, respectively.
Figure 1: Central America: necessary increase in public spending by the central administration to implement a UBI from threshold poverty level (2020-2030, figures as percentages of GDP).
At the Institute’s discretion, the implementation of a UBI could be carried out gradually, as shown in Figure 1 ―in a maximum period of ten years and serving the population in the territories with the highest poverty and less development, consistent with the achievement of the Sustainable Development Goals and with the necessary institutional, fiscal and economic restructuring that guarantees the effectiveness and sustainability of this policy over time. This way of gradually achieving the universality of basic income would allow States to advance comprehensively in the universalization of other public goods and services related to education, health, water and environmental sanitation, housing, among others.
According to estimates by the Institute, among the greatest impacts of executing this agenda, in addition to the elimination of extreme poverty, is the generation of 2.0 million direct jobs; the increase average of 20% in the rhythm of economic activity, mainly driven by domestic production; as well as improvements in the indicators of social welfare and equality. For the general fulfillment of the SDG2030 Agenda in the Central American region, the Institute has identified various probable sources of financing, among which the increase in tax collection stands out. As a result of the reduction of illicit capital flows, smuggling, evasion of taxes and fiscal privileges; as well as by the increase of some taxes that, additionally, could improve the global progressiveness of the tax system. In some states, indebtedness can also be considered as a financing mechanism. Additionally, the Institute reiterates that, on the side of public spending, it is possible to generate spaces additional prosecutors through two channels: by eliminating the items that are not oriented towards development goals, so that resources can be reallocated to programs that have such an orientation; as well as by improving efficiency of those that can generate better results in economic and social terms.
Table 1: Fiscal Space on the Taxation Side
The gradual implementation of a universal basic income, together with the advancement of public investments that guarantee the fulfillment of development goals, and a comprehensive fiscal reform ―more income, public spending based on results, greater transparency and an effective fight against corruption – are the elements that will allow Central Americans to successfully face this health and economic crisis, expanding rights and rebalancing social responsibilities. For this reason, the Institute urges all of society – peasant movements and promoters of individual human rights, workers, businessmen, academia, political parties and governments in office – to promote an open and sensible national dialogue, with a vision of the future, that has as objective of transforming States through a social, economic and fiscal pact that changes current political and socioeconomic trends and sets Central America on the path of sustainable, inclusive and democratic development to which the great majority aspire.
In particular, the states of the countries of the region must advance in the strengthening of their social protection programs, a central element of policy that allows reducing existing inequalities, not only in terms of income, but also from an inclusive perspective in economic terms and social that promote social cohesion. Furthermore, for Icefi, reducing the exacerbation of the poverty conditions in which more than half of Central Americans live may be possible by universalizing access to social protection programs, since the current context has only accentuated the existing limitations in terms of of the economic and social model. A better Central America is possible to the extent that an inclusive development model is formulated and built in economic, social and environmental terms, so that a universal basic income ensures a minimum base of protection that is accompanied by policies that guarantee for all a quality education; access to timely, effective and efficient health services; have public services of economic and social infrastructure that favor social cohesion; and that all implemented policies are consistent with an environmentally friendly strategy.
Pope Francis has advocated basic income in his new book, Let us Dream: The path to a better future, Simon and Schuster, 2020.
Pope Francis wrote this: “Recognizing the value to society of the work of nonearners is a vital part of our rethinking in the post-Covid world. That’s why I believe it is time to explore concepts like the universal basic income (UBI), also known as ‘the negative income tax’: an unconditional flat payment to all citizens, which could be dispersed through the tax system. The UBI could reshape relations in the labor market, guaranteeing people the dignity of refusing employment terms that trap them in poverty. It would give people the basic security they need, remove the stigma of welfarism, and make it easier to move between jobs as technology-driven labor patterns increasingly demand. Policies like the UBI can also help free people to combine earning wages with giving time to the community.” (pp. 131-132)
Our comment: Pope Francis, and his co-author Austen Ivereigh, show a good understanding of a Basic Income as an unconditional flat payment to all citizens.
(A negative income tax is different: That works like a means-tested benefit, and its administration would be a lot more complicated than that of a Basic Income. It is a negative income tax, and not a Basic Income, that would be administered through the tax system.)
Pope Francis and Austen Ivereigh also show a good grasp of some of the important effects of a Basic Income: that it would provide a secure financial platform on which to build; there would be no stigma attached to it; it would give to workers more power in the employment market; and it would enable people to make new decisions about paid employment, and to do vital work in their communities.
Pope Francis has made a most useful contribution to the Basic Income debate.
Universal Basic Income (UBI) is meant to provide financial security and address job losses. Africa is one continent where UBI is critical. During the COVID-19 outbreak that has rendered many people jobless, it could have been used to prevent them from sliding into poverty.
Universal Basic Income is unconditional cash transfers to recipients guaranteed by the government. Recipients are entitled to the income regardless they are earning or not. The universal basic income is not taxable and recipients can use it for any of their needs. The government has no obligation to follow up on how the payment is used.
Currently, there is no country with a Universal Basic Income in Africa, but there are schemes that can help transition toward a UBI policy. There have been trials in some countries in Africa, such as Kenya, Uganda and Namibia. The trials that were conducted in the three African countries showed positive results. What benefits can we expect from a universal basic income in Africa?
Eliminate Poverty by Generating Income
By introducing Universal Basic Income in Africa, recipients can improve their financial status from low-income earners to medium-income earners. The recipients will have more disposable income to cater to their needs.
This would have been beneficial at the time when many Africans have lost their jobs due to the COVID-19 pandemic. Basic income will help to support families and prevent them from sliding into poverty.
Ease of Access to Education for Children
With the guarantee of basic income, children can access education without having to work to support their parents. The lack of income leads to increased school dropouts and consequently early marriages.
Children drop out of school to help their parents generate additional income through informal employment. When casual jobs are not available, children get married early to seek solace and financial support from their spouses.
Providing basic income would help children stay in school since they do not have to look for employment to support their families. While children are in school, early marriages can be eliminated and help them gain an education and live a dignified life.
Promote Entrepreneurship and Increase Job Opportunities
Through UBI, people will have access to more disposable income. When people have access to disposable income, they can take risks and start businesses.
Starting a business requires some capital and enough funding before it can start generating revenue. Basic income can be directed to startups since the government needs not to follow up on how it is used.
The impact of basic income is that people can take risks and start businesses that will consequently create job opportunities. Companies will also help the economy through corporate taxes and income taxes.
Improve Mental and Physical Health
Basic income helps people lead a better life, improving their physical and mental health. The lack of disposable income to cater for the basic needs leads to stress and depression, pushing people to live in deplorable living conditions. Moreover, the lack of income hinders people from accessing health insurance.
The same way the government provides free health and education, it is also best that African governments invest in UBI for the financial security of their citizens. With disposable incomes, recipients can secure health insurance and live a dignified life.
A study carried out by GiveDirectly Organization in 63 Kenyan villages, provided each adult 0.75 dollars per day. The results of the study showed that recipients had an improvement in consumption and well-being. The recipients increased their investments in livestock and home improvement.
Financial and Social Inclusion
The problem of social inclusion is rampant in Africa. The lack of basic income leads to social marginalization, preventing people from accessing modern services like insurance, bank services and technology, such as access to mobile phones.
UBI would help to alleviate social marginalization by assisting people in accessing modern services.
For instance, the government can remit basic income through banks or mobile transfers. As such, people will open bank accounts and buy mobile phones to receive the money. This way, marginalized people can enjoy modern services.
Reduce Financial Gaps between the Rich and the Poor
One of the ways to fund Universal Basic Income is through taxes. Income taxes can lead to a fair distribution of wealth by taxing high-income earners and reducing wealth gaps. Africa is the leading continent with huge income disparities between the high-income earners and low-income earners.
Low skilled workers barely get incremental increases in their wages, pushing them into adverse poverty with increasing inflation. Through UBI, the government can tax high-income earners and redistribute the proceeds to low-income earners.
Family Cohesiveness and Stability
In many African countries, there is domestic violence due to the inability to cater to family needs and depression. The survivors of domestic violence cannot leave their spouses because they lack a stable income. If the survivors can access basic income, they can leave their spouses and meet their basic needs.
Also, if there is a guaranteed income, depression and stress can be eliminated, reducing domestic violence.
In many African countries such as Kenya, parents give birth to many children for cheap labour and security during their old age. If there is a guarantee of regular income, parents would not need to raise many children to support them when they grow old.
How to Fund the Universal Basic Income in Africa
There are many ways through which African governments can fund Universal Basic Income through taxes and creativity. These are some of the ways to finance the Universal Basic Income in Africa.
Reducing Government Expenditures
Reducing government expenditures can set aside some monies that can be directed to fund basic incomes. African governments can reduce some funding to revenue-generating state corporations. Some of the revenues they generate can be directed to the basic income initiative. Most of the recurrent expenditures for government institutions can be halted.
Higher Taxes for High-Income Earners
Through higher taxes from higher-income earners, governments can generate funds to finance basic income initiatives. It would also help to reduce income disparities between the rich and the poor. For instance, governments can introduce a luxury tax and wealth tax above a fixed net worth.
Increase Corporate Taxes and Reduce Financial Benefits to Leaders
African governments can increase corporate taxes by three percent to generate additional revenue for UBI. Additionally, governments can reduce some benefits for politicians. The monies can be redirected to a basic income to promote recipient welfare.
Final Thoughts
African governments should invest in basic income for its citizens. Basic income is equally important in a nation like other social amenities such as health and education. It leads to general wellbeing, social cohesion, and productivity. In addition, by affording basic needs such as food, shelter and clothing, citizens live a dignified life. Finally, basic income will promote mental health. Poverty and social injustice can lead to poor mental health and related illnesses.
Author Bio:
Vincent Nyoike is a Kenyan research writer with vast writing experience. He is a graduate of the University of Eldoret with a degree in Applied Statistics with Computing. He has also pursued a course in Certified Public Accountant. From his experience in business, he enjoys writing on finance and business topics, with a particular focus on Africa. He also works on SEO projects for private international organisations.
