by Yannick Vanderborght | Feb 11, 2012 | News
Hodgson, Glen “Guaranteed annual income – a Big Idea whose time has yet to arrive” (iPolitics, December 20, 2011)
This article by Glen Hodgson, Senior Vice-President and Chief Economist of the Conference Board of Canada since 2004, discusses the economic, fiscal and social value of a guaranteed annual income (GAI) for Canada and demands further detailed research on the feasibility of GAI. After introducing GAI as “a minimum level of income for every individual or family in the country, delivered without condition through the existing income tax system” and a brief summary of the history of this concept, Hodgson stresses three main advantages of a GAI:
1) Prevention of poverty
2) Reducing the so called “welfare wall”
3) Reducing health care spending
To support his argument, Hodgson introduces an analysis of the “health and social impacts of the MINCOME experiment” in Canada during the 1970s. This analysis by Evelyn Forget demonstrates evidence of above presented advantages. Hodgson concludes that a GAI is “an appealing ‘big idea’ whose time has yet to arrive politically” and that “there is no better time than right now to heat up the debate”.
Wolfgang Müller – BI News
https://www.ipolitics.ca/2011/12/20/guaranteed-annual-income-a-big-idea-whose-time-has-yet-to-arrive/
by Citizens' Income Trust | Jan 25, 2012 | Opinion
Emilio Albi and Jorge Martinez-Vazquez (eds), The Elgar Guide to Tax Systems, Edward Elgar, 2011, xi + 462 pp, hbk, 0 85793 388 1, £145
The editors’ introduction to this volume of thoroughly researched conference papers shows just how much has changed in OECD tax systems during the past few decades: flatter income tax rates, ubiquitous VAT, the almost complete disappearance of wealth taxes, a substantial reduction in excise duties, and much more. The separate chapters discuss the reasons for these changes, and also such fields as corporate taxes, environmental taxes, decentralized taxation, tax administration, and the relationships between tax policy, politics, and research. The important debates within taxation policy are discussed: the balance between direct and indirect taxation; different types of taxations’ relationships to economic stabilisation, growth, competitiveness, and income redistribution; whether capital income should be taxed (yes, minimally); how viable (national) corporate taxes are in a globalizing world; whether the decline of wealth taxes and of excise duties is inexorable; how VAT and environmental taxes are best designed; whether anything other than a property tax is a good candidate for subnational taxation; and the extent to which administrative feasibility should drive taxation policy. The final two chapters tackle two different influences on tax system reform: politics, and research. The authors conclude that political considerations are important determinants of tax systems, and particularly of their complexity, and that research is more likely to follow policy change than to lead it. Given this, the researcher’s task ‘is the long-term game of building up the institutional capacity both within and outside governments to articulate relevant ideas for change, to collect and analyze relevant data, and of course to assess and criticize the effects of such changes as are made’ (p.443).
Of particular interest to readers of this Newsletter will be chapter 3 on individual income taxation. True tax credits are correctly understood as income tax allowances which are paid out proportionately to the amount that earned income falls below a threshold, and these are rightly seen as enhancing progressivity and as being efficient to administer. (The UK’s current ‘Tax Credits’ are a means-tested benefit, and not tax credits.) ‘To the extent that all tax credits and exemptions were made refundable, this would turn the income tax system into a full-fledged negative income tax system,’ (p.105). The chapter identifies as problematic both income transfers not delivered through the tax system, and tax credits which change with a household’s circumstances. It notes that enhancing refundable tax credits delivered through the tax system to complement stand alone transfer programs could go some way to alleviating poverty in the lower income range (p.106). This is a lesson that the UK Government learnt during the early 1970s, but has forgotten since.
At a point in the discussion at which the UK’s Child Benefit might have been discussed (where universal education provision and the Child Trust Fund are discussed), there is no mention of it; and what I didn’t find in this collection was any understanding of the administrative and other efficiencies related to a combination of universal benefits and a progressive income tax. This is a pity in such a wide-ranging collection.
Positively important to the Citizen’s Income debate is the light which this collection throws on a variety of possible funding methods. The chapter on environmental taxes is relevant, as is the mention of land tax (p.337). What isn’t in the collection is any discussion of a field which will one day be important: transnational taxation. There is now wide recognition of the possible utility of a ‘Tobin’ financial transaction tax, including the European Commission’s welcome recognition that this kind of taxation would best be administered at regional level, and therefore by the EU. Any future collection of papers on taxation policy really will need to discuss the feasibility of transnational tax collection and whether a financial transaction tax might fit into this category.
Perhaps it isn’t fair to say too much about what a book hasn’t done when it’s done so much already. The book discusses many of the issues facing tax systems and attempts to reform them, and it will be of considerable value both to policy-makers and to students of taxation policy.
by Yannick Vanderborght | Jan 19, 2012 | Research
BIRNBAUM, Simon (2011), ‘Should surfers be ostracized? Basic income, liberal neutrality, and the work ethos’…
Neutralists have argued that there is something illiberal about linking access to gift-like resources to work requirements. The central liberal motivation for basic income is to provide greater freedom to choose between different ways of life, including options attaching great importance to non-market activities and disposable time. As argued by Philippe Van Parijs, even those spending their days surfing should be fed. This article by Simon Birnbaum (Department of Political Science, Stockholm University) examines Van Parijs’ dual commitment to a ‘real libertarian’ justification of basic income and the public enforcement of a strong work ethos, which serves to boost the volume of work at a given rate of taxation. It is argued (contra Van Parijs) that this alliance faces the neutrality objection: the work ethos will largely offset the liberal gains of unconditionality by radically restricting the set of permissible options available. A relaxed, non-obligatory ethos might avoid this implication. This view, however, is vulnerable to the structural exploitation objection: feasibility is achieved only because some choose to do necessary tasks to which most people have the same aversion. In light of these objections, the article examines whether there is a morally untainted feasibility path consistent with liberal objectives.
Full references:
BIRNBAUM, Simon (2011), ‘Should surfers be ostracized? Basic income, liberal neutrality, and the work ethos’, Politics, Philosophy, Economics, November 2011, vol. 10, no. 4, 396-419. See: https://ppe.sagepub.com/content/10/4/396.abstract
by Yannick Vanderborght | Dec 23, 2011 | News
Pertti Koistinen (Professor of Work and Labor Market Policies) from the UNIVERSITY OF TAMPERE, Finland announces a call for contributions to the project. To find out the feasibility of basic income as a social policy reform and an alternative to the failure of prevailing social security systems to prevent working age population from poverty and safeguard the basic social rights for all citizens Koistinen and fellow organizers look for cooperation and volunteers throughout of Europe.
Felix Coeln – BI News
For more info about Basic Income Research Project go to:
https://www.transform-network.net/en/home/article/basic-income-research-project-call-for-contributors.html
by Yannick Vanderborght | Jul 30, 2011 | Research
In a new book, Guy Standing develops a theme that has underpinned his advocacy of a basic income since the 1980s. There are many rationales for supporting a basic income, but effective political pressure may emanate from the emergence of a new mass class, the precariat. It is a dangerous class; not yet a class-for-itself, in the Marxian sense, but a class-in-the-making, in which distinctive groups are torn politically in different directions.
Those in the precariat – and the millions who fear they could fall into it – are characterised by having insecure lives, in and out of short-term jobs, with volatile and generally low incomes. What stands out most is that they lack a secure occupational identity, and have no sense of control over their work, labour, recreation and leisure.
The relevance for basic income arises because the precariat’s economic insecurity is chronic and is mostly uninsurable. In a globalising market economy, the precariat faces systemic uncertainty and exposure to threatening hazards and shocks. Social insurance cannot provide basic economic security in such circumstances. But in any case governments have increasingly resorted to means-tested social assistance, ‘targeting’ on the so-called deserving poor. Even with tax credits, this has generated well-known poverty and unemployment traps, whereby those in the lower echelons of labour markets face marginal tax rates close to 100%, prompting moral and immoral hazards.
It has also led to a proliferation of precarity traps, whereby anybody losing a job or income must enter a debilitating process of trying to obtain state benefits, during which time they have no income and build up debts. If they do obtain benefits, they will be disinclined to take a temporary low-wage job in case they have to start the process all over again.
The precariat consists of three groups. First, there are progressives, mostly consisting of frustrated educated youth, intellectuals and others who resent the insecurity and lack of occupational opportunity. They embrace various non-conformist lifestyles. It is this group that has been filling the squares in protests against the austerity programmes that have followed the financial crisis. They reject old-style social democracy while looking for a redistributive strategy that would give people like themselves basic economic security in which to build their lives. They openly support a basic income, even if some have to be alerted to the feasibility of it.
The second group in the precariat is anomic, politically detached, including many morally defeated people, as well as migrants keen not to be noticed by the authorities, many of the so-called disabled and many who have been criminalised. This group could be mobilised to support a basic income, but would have to feel they were moving from a denizen status to citizens in order to feel it would be something for them.
The third component of the precariat is what makes it the dangerous class. It consists mainly of those falling from the old working class and the partially educated condemned to a life of insecurity. This disparate group listens to populist politicians offering variants of neo-fascism, a far-right agenda depicting government as against them and strangers, notably migrants, Muslims and ‘liberals’, as the cause of their insecurity.
The far-right is gaining ground in country after country, often at the expense of social democrats. The trouble is that the latter has not offered the precariat an attractive vision, and are paying the political price, deservedly. But here, paradoxically, there is reason for some optimism. Increasingly, we may see that those wishing to be centre-left politicians will have no alternative to offer other than a universal basic income, if they want to foster an economically secure citizenry and to reduce inequality.
That is why the book ends on a mildly optimistic note. However, it goes one stage further, which may be controversial for basic income supporters. The argument is that the commodification of politics combined with the growth of an increasingly angry and active precariat have accentuated the thinning of democracy and the erosion of deliberative democracy. In that context, it advocates a basic income in which every adult on establishing eligibility makes a moral commitment in writing – not a legally binding one – to vote in general elections and to attend at least one local public political meeting each year.
Strengthening deliberative democracy will surely be a vital part of a new progressive politics in which the precariat would feel an integral part of society. That is consistent with the values that have guided BIEN for the past twenty-five years.
Guy Standing, The Precariat – The New Dangerous Class, has just been published by Bloomsbury, and can be ordered online.
