by Tyler Prochazka | Mar 26, 2016 | News
Original Article by Jean-Eric Hyafil
On October 30, 2015, the French Prime Minister Manuel Valls, asked MP Christophe Sirugue to write a report on potential social welfare potential (including the means-tested benefit known as Active Solidarity Income (RSA), and various benefits such as disability pension, elderly people pensions, etc.). The aim is to make the system fairer, more efficient and less complex in order to reduce the number of people eligible to these pensions and benefits but not redeeming them. Mr. Sirugue is due to give out his report by the end of March.
The French Movement for a Basic Income (MFRB) contributed to the report (the contribution in French is available here. The contribution has been written thanks to Robert Cauneau, Public finance expert, and Jean-Eric Hyafil, Economist at Paris I University, Jean-Marie Monnier and Carlo Vercellone, Economics professors at the Sorbonne University.
Given the transformation of labour, particularly due to the digital revolution, we recommend to replace the RSA, a conditional and stigmatizing aid given to individuals in poverty, with a basic income based on the principles of unconditional rights and independence.
Nevertheless, establishing a basic income goes along with deep tax reform, yet taxation is not among the missions attributed to Mr. Sirugue for this report. Indeed, his mission was focused on the reform of minimum social benefits.
A short-term reform of the solidarity income (RSA)
Taking into account the constraint of the Prime Minister’s request, the MFRB first formulated RSA reform proposals which could gradually lead to a basic income. For example:
- remove the mandatory status of job seeker to receive the RSA
- change the rule relative to alimony and as a consequence the principle of subsidiarity
- automate RSA payment to all the legal beneficiaries
- individualize the RSA
- pay the RSA ex-ante in order to suppress activation delays
Implementing these proposals would improve RSA’s efficiency in reducing poverty. Nevertheless, even if each and every proposal were implemented, it appears necessary to formulate a global reform integrating another redistribution mechanism: the income tax. Indeed, the first limitation is related to RSA ex-ante payment; this is possible if undue RSA payments could be directly debited to incomes. But such a process should be integrated to a system that allows for income tax withholding.
The second limitation is related to the RSA individualization. A complete individualization (i.e. payment to a person without income, even if he or she lives with a person with a substantial income) is not possible without changing the way the income tax is calculated for a couple.
A middle term reform of the income tax for an introduction of the basic income
The MFRB formulated a second set of recommendations including various proposals for the implementation of a basic income simultaneously with income tax reform. These proposals could be applied on a midterm basis, along with the creation of a withholding system for the income tax.
Following this logic, the MFRB suggests a range of options to show the spectrum of possibility to policymakers. With the introduction of a basic income, numerous reforms become possible, particularly fusions of the income tax for individuals (e.g. “impôt sur le revenu des personnes physiques, IRPP”) and the general social contribution (contribution sociale généralisée, CSG). Indeed, issues have been raised regarding tax exemption policies for income tax, and income splitting, that is whether the income tax apply to individuals or to households.
Fiscal expenses through tax exemption are largely used by wealthy households to reduce their income tax. Therefore, it seems wise to reduce their impact. Yet some of them also play a role in social protection, particularly for the poorest households. For example, tax credits given for paying a nursery school service, and other non-profit organizations.
The MFRB formulates proposals for an adjustment of fiscal expenses (through tax exemption) in order to keep a tax exemption level of around 34 billion euros (the 2014 figure) for the French households, after the merge of income tax and general social contribution (IRPP and CSG) and also a high tax rate (20 percent to 30 percent) from the first euro. Additionally, these proposals would allow shifting the advantage of tax exemption toward poor households.
The MFRB also formulated proposals to switch some fiscal expenses to mechanisms involving “service cheque“, following the principle of drawing rights developed by the tenants of unconditional autonomy. Such a proposal would actually allow the absorption of the benefits associated to the solidarity income (RSA), as discounts for public transportation, school restaurants, sports or culture.
Individualisation of the income tax or household taxing?
The second issue is the income tax individualisation. Nowadays, the income tax is applied to households. Should it be applied to individuals, simultaneously as the implementation of an individual basic income?
In this report, the MFRB presented two alternative solutions. The first considers the fusion of the income tax and the social contribution (IRPP and CSG) into an individual tax. The second integrates the basic income into the income tax system in order to preserve household taxation. This second proposal advantageously avoids a sharp tax increase for households where there is a large income disparity between the couple’s incomes.
Finally, the MFRB considered possibilities of converting some employment subsidies to a basic income, particularly the exemption of employers’ contributions aimed at low salaries (exonération “Fillon”).
With such a broad proposal spectrum, the MFRB wanted to put the minimum social benefits reform in the perspective of a broader and ambitious French redistribution system reform, which would associate the implementation of a basic income with fiscal reform.
The MFRB is pleased that the question of a basic income is currently being considered by French policymakers. On the one hand, this report provides an array of ideas regarding minimum social benefits. On the other hand, a Digital National Council report described the future of organisation in the context of the digital revolution. The expert assessment brought by addressing these issues puts increasing emphasis in the public discussion on the basic income and the new opportunities it brings.
Translated into English by Romain Garbage and Antoine Stéphany
Reviewed by Tyler Prochazka
by Guest Contributor | Mar 8, 2016 | Opinion
By Liane Gale and Ann Withorn
for the Basic Income Woman Action Group (BIWAG)
Since 1909, International Women’s Day has been a day for recognizing women’s economic, political and social achievements. Yet over the past century, March 8 Women’s Day celebrations have revealed tensions between feminists, socialists and anarchists about the meaning of women’s roles in society. Feminists saw full equality through equal participation in the polity as the major way women would gain power. Socialists argued that full inclusion of women as workers within a self-aware proletariat was the way for women to achieve solidarity, and therefore power. Anarchists envisioned women’s liberation as based on learning new ways of living and loving, so that a new way organizing society would become possible.
Today, we view the Basic Income Guarantee (BIG) as a means to transcend such historic differences. BIG offers a way for women to achieve basic economic security outside of the labor market. It firmly denies that only certain activities done outside the home and community should be rewarded, much less be the chief source of one’s respect and social value in society. With a meaningful basic income as a secure base for living, women everywhere should be more able to live a life without fear, and of their own design.
If basic income could fundamentally change the lives and fates of women and girls, and with it the fate of humanity, then why is this not widely discussed in the community? One case in point is the appeal by Martha Beéry to the national media agency in Switzerland to invoke bias towards male views in a panel on basic income on national television in 2012 that only included men. The decision was in her favor, but the inclusion of women’s points of view in regards to basic income has been slow both in mainstream and social media. Despite this, recently we have seen a welcome surge of contributions about the economic and social realities of women, that often offer basic income as a solution to some of the disadvantages women face.
These analyses include calls to elevate the value of care work and other contributions to society (such as community work), which are underpaid or not paid at all, and as a result do not elicit much respect by a society which largely equates money-making abilities with importance and status. Organizations, such as the Care Revolution Netzwerk, that is active in German-speaking countries, Mothers at Home Matter from the UK, and initiators and supporters of the “Leap Manifesto: A Call For a Canada Based on Caring for the Earth and One Another” are all grassroots efforts to change the current narrative. With the Basic Income Woman Action Group (BIWAG), we strive to contribute to this international effort. To that end, we are facilitating national and international conference calls with interested members and maintain a BIWAG Facebook Group.
The program of the 15th Annual North American Basic Income Congress in Winnipeg, Canada (May 12-15) is especially attentive to women’s concerns and to enhancing women’s roles in the movement. More than half of the planning committee members are women. Dr. Felicia Kornbluh, professor of Gender Studies, writer, welfare rights advocate and member of the Vermont Commission on Women, will give a keynote on “Two, Three, Many Precariats: Basic Income and the Fight for Gender, Class and Disability Justice”. Two other keynotes will also be given by women. At least sixteen panel presentations and speakers will be directly addressing links between basic income and women. In addition, three BIWAG sponsored roundtables will allow serious time for discussion of “Women’s Roles within the Basic Income Movement”, “Basic Income and the Care-Centered Economy”, and “Basic Income’s Role in Ending Violence Against Women.” A panel on the Color of Poverty and speakers from the Aboriginal Council of Winnipeg will also bring much immediacy to the event.
The 2016 theme of International Women’s Day includes the goals of ending all forms of discrimination and violence against all women and girls everywhere, and we believe that a basic income would be a firm step into the direction of a more humane world for all.
To learn more about BIWAG or to get involved, please join our Facebook group or contact us at withorn.ann@gmail.com or liane.gale@gmail.com.
Recent contributions on women and basic income, and closely related issues and causes:
Nicole M. Aschoff, “Feminism Against Capitalism,” Jacobin, February 29, 2016.
Allissa Battistoni, “Why Women’s Work is Key to a Just and Sustainable Future,” Feministing, August 6, 2015.
Alyssa Battistoni, “Why Establishing a Guaranteed Income for All Can Help Prevent Environmental Catastrophe,”, Alternet (reprinted from Jacobin), February 19, 2014.
Madeleine Bunting, “Who Will Care for Us in the Future? Watch Out for the Rise of the Robots,” The Guardian, March 6, 2016.
Petra Buskins, “‘Flexibility’ Won’t Stop Women Retiring In Poverty,” New Matilda, October 30, 2015.
Liane Gale and Ann Withorn, “Basic Income Women Action Group”, Google Hangout, hosted by Marlen Vargas Del Razo, Living Income Guaranteed, Streamed Live, August 23, 2013.
Claire Cain Miller, “How Society Pays When Women’s Work is Unpaid,” New York Times, February 22, 2016.
Helen Ninnies, “As Rental Prices Rise, Women Stay in Bad Relationships to Survive,” Broadly, February 20, 2016.
Vanessa Olorenshaw, “Mothers at Home Matter and the Politics of Mothering – When Maternal Care is Taboo and Politicians Have No Clue,” Huffington Post U.K., March 17, 2015.
Meera Lee Patel: “Idea: All Work Deserves Pay,” Fast Company, January 20, 2016.
Ina Praetorius: “The Care-Centered Economy: Rediscovering What Has Been Taken for Granted,” e-book published by Heinrich Böll Stiftung, April 7, 2015.
Judith Shulevitz: “It’s Payback Time for Women,” New York Times, January 8, 2016.
by Guest Contributor | Feb 17, 2016 | News
The Globe and Mail, Canada’s main centrist newspaper, reported on Friday 5 February 2016 that a federal government minister “is interested in the idea of a guaranteed [minimum] income.” Mr. Jean-Yves Duclos, the new Minister of Families, Children and Social Development, said, “I’m personally pleased that people are interested in the idea.” Mr. Duclos has a mandate to develop a federal poverty-reduction strategy.
Mr. Duclos is part of the Liberal Party of Canada, which won a parliamentary majority in the October 2015 federal election. The Liberal Party’s progressive electoral platform enabled the party to replace the Conservative party on the left and win many seats previously held by the New Democratic Party (Canada’s social democratic party) on the left. Key election promises included deficit spending to stimulate economic growth, the legalization of marijuana, electoral reform, a concerted effort to tackle climate change and a comprehensive national poverty-reduction strategy. Their strong parliamentary majority has given the party a clear mandate to pursue this progressive agenda in earnest.
However, although efforts to reduce poverty feature prominently in the official Liberal platform, a guaranteed minimum income did not. It is therefore unlikely to form part of Mr. Duclos’ national poverty-reduction strategy during the government’s current four-year term. Nevertheless, The Globe and Mail suggests that Mr. Duclos’ comments could lead to the idea’s inclusion in a future Liberal Party election manifesto. His comments would also seem to have substantial support among Liberal Party members with the 2014 Liberal Party Convention producing two major policy resolutions on a basic income.
Furthermore, the introduction of a federal guaranteed minimum income might not be such a difficult sell with Canada’s provincial governments, all of which would have to participate in such an initiative. It was announced in January 2016 that Mr. François Blais, Québec’s new Minister of Employment and Social Solidarity, will work towards introducing a provincial guaranteed minimum income. Meanwhile, the Liberal Party of Manitoba has pledged to introduce two guaranteed minimum income pilot projects if the party wins the provincial elections in April 2016.
Written by: Jon West
For more details on this story see:
Bill Curry, “Guaranteed income has merit as a national policy, minister says,” The Globe and Mail. February 5, 2016.
Credit picture CC UNU-WIDER
by Stanislas Jourdan | Feb 4, 2016 | News
Long-time supporter of basic income François Blais has been appointed back as Minister of Employment and Social Solidarity and tasked to work on Guaranteed minimum income.
As a consequence of a ministerial reshuffle, François Blais has been displaced from the ministry of Education back to Québec’s Ministry of Employment and Social Solidarity.
Blais had previously been appointed Minister of Employment and Social Solidarity after the April 2014 General Election in Canada’s province. One year ago he was appointed to the Ministry of Education.
“Minister François Blais will work on the improvement of our income support instruments in the direction of a guaranteed minimum income, a field in which he has strong expertise,” Québec’s Prime Minister Philippe Couillard explained in a statement to the press.
“I am serious about it” said Couillard in an interview. “We look at what other countries are doing like in Finland. I find the idea very seductive.”
“On the one hand it simplifies the State, on the other it maintains people’s dignity. The combinaison is excessively interesting.”
Blais is BIEN member since the 1990s. He investigated the concept while holding the post of Professor of Political Science at Laval University, Québec City. In 2002 he co-wrote a book entitled Ending Poverty: A Basic Income for All Canadians, and he reiterated his support for basic income when he joined the government in 2014.
“A perfect political storm”
The ministry reshuffle may indicate a change of direction for the liberal government led by Couillard. Blais’ predecessor Sam Hamad has been pushing a reform which would involve more sanctions to unemployed people who would refuse job opportunities. The bill has sparked a lot of criticism among anti-poverty group and leftist parties in Québec.
“It’s the perfect political storm and Quebec is in the unique position to lead what could be the most fundamental change in western social policy since the introduction of medicare.” comments Peter Wheeland on CultMontreal.com.
Blais’s reappointment however does not make unanimity. In particular, the Left-Independentist and pro-basic income party Québec Solidaire expressed its concerns with the return of Blais to the Ministry for Social Affairs. Blais himself was heavily criticized during his first mandate as Minister for pushing cuts in social benefits.
by Marc de Basquiat | Feb 1, 2016 | Opinion
Multiple surveys across many countries show an increasing support for the idea of providing every citizen with a monthly lump-sum allowance to ensure everyone can meet their basic subsistence needs. In France, the IFOP (a leading French national market research institute) has shown that this support goes beyond political orientation divisions. From the question: “Are you in favour of implementing a guaranteed basic income for all citizens which would replace most existing allowances?” came a positive answer, depending on the degree of support for one party or another, from 72% to 79% for left wing sympathizers and from 50% to 54% for right wing sympathizers.
However, what would an unconditional basic income in France look like in concrete terms?
The Finland experiment
Since the election in April of the Finnish pro-basic income coalition, the topic has given rise to renewed international interest. All started when the Prime Minister of Finland Juha Sipilä announced the launch of a series of pilots, the most important being a “universal basic income” [1], in order to reform the social security system in response to the evolution of the labour market. This will also allow the evaluation of how to reinforce autonomy and incentives to work, as well as reducing bureaucracy and the complexity inherent in accessing social assistance.
The lead role in this project has been given to professor Olli Kangas (KELA) who has outlined the following schedule[2]: preparation phase from December 5th, 2015 to November 15th, 2016; two-year experimentation starting in 2017; evaluation in 2019.
Olli Kangas explained that the work group will evaluate at least four options:
- a “full basic income” (~800 €) replacing almost all basic and insurance-based benefits;
- a “partial basic income” (~550 €) replacing all basic benefits but leaving intact almost all insurance-based benefits;
- a negative income tax in which benefits would phase out as people earn more money;
- miscellaneous other approaches including a universal income and additional components.
Everyone who has recognised the need for major reforms of our social protection mechanisms perceives the announcement of the Finish pilot as an opportunity. However, we need to give time to our Finnish friends for their project to mature.
Which options are possible in France?
The Association for the Introduction of an Existence Income (AIRE) has been working on these questions since 1989, gathering studies and proposals from numerous experts, philosophers, economists, sociologists, politicians, etc. The French Movement for a Basic Income (MFRB) created in 2013 involves activists from a wide variety of backgrounds, leading actions through the country and enriching proposals by bringing together citizen experiences from the grass-roots[3].
Despite apparent simplicity, an unconditional basic income would require a series of structural choices. Precise adjustment of the parameters would need to be made in order to ensure it performs optimally in terms of justice and efficiency. Considering the vast number of options, it would be fallacious to believe that there is an ideal solution. Actually several options that must be weighted by parliamentary and experts in order to create a consensus that is adapted to the reality of our country.
Our experience leads us to recommend a universal income that would vary based on the beneficiary’s age. In particular the case for children should be processed separately, which means organizing an in-depth discussion about the French family assistance policy. This means replacing all or part of the actual eight allowances[4] by a lump-sum for each child. A key stake is to eliminate the high variability of the State grants according to the child’s rank within the family, the matrimonial status of the parents or the parent’s income (knowing that a single child of a middle-income level couple currently receives a remarkably low grant). The potential variation of the universal income amount according to child age (3, 14, 18 year old thresholds) must also be further investigated.
Similarly a discussion is needed regarding senior citizens. The question of incentive to work disappears with the elderly, but the dependency issue arises. Do we need to define a higher amount above 65 years old? How should the matrimonial life conditions be integrated? The ASPA[5] level (800 € for a single person, 1242 € for a couple) gives an indication but not a clear answer on the solution to be implemented.
The coordination with housing allowances constitutes a third theme to be carefully analysed. Acknowledging the inflationary effect of housing allowances (APL) on the rental market price, some politicians and economists[6] are investigating the potential effects of merging the APL and the RSA[7]. As the AIRE association is attached to the Tinbergen rule[8], we are highly reluctant to support this proposal, but the underlying issues must nonetheless be addressed. In any case, it is important to revisit conditionality links between several allowances and the housing grant, in particular the existence of a problematic “housing lump-sum” component within the RSA.
The last framing issue is to define the scope of beneficiaries for a “universal income”. Despite this designation, it is necessary to limit eligibility to a national community. This needs to be defined in terms of residence and/or nationality, probably through continuity of the rules applying today for the RSA beneficiaries. However, this still creates a variety of fundamental questions, for example the potential right to the universal income for prisoners or asylum seekers (currently receiving the ATA[9]).
Three scenarios for a universal basic income for “active age” adults
Similarly to the Finnish approach, we identify three quite different scenarios to defining a universal basic income that would be paid to any adult in France.
- Baseline: extend the distribution of the “RSA single person allowance” to the whole country population (excluding the housing lump-sum component), being 470 € by month in 2016, financed by a flat tax system replacing several current basic social and family allowances as well as tax mechanisms.
- Maximised: distribute equally to the whole population the entirety of the social protection budget, including pensions and unemployment benefit. This would mean about 800 € per month.
- Dynamic: delete all employment incentives to companies and allowing a massive flexibility improvement in terms of minimum salary, in order to finance a basic income ranging between 500 € and 550 € by month. This would also replace a major part of the social and tax mechanisms but leave intact all insurance-based benefits.
The financial feasibility of scenario A is proven and it does not lead to a large upheaval of the redistribution operating in France. It allows a massive simplification of the social and tax systems, facilitating the daily life of the population and reducing operational costs. This scenario, like the following ones, eliminates many inconsistencies, iniquities, and numerous more-or-less known perverse effects. In terms of microeconomic analysis, it implies a massive evolution neither by an income effect nor by a substitution effect, unlike the other scenarios. However, when it comes to tax in france for non residents, one may have to pay tax on income that comes from French sources. In other words, if you work for a French company, even if you do not reside permanently in France, the income you earn will be taxed.
Scenario B designates the losers: those who contributed all along with their life for pensions and unemployment benefits and who would be left without those related benefits. Neither the AIRE nor the MFRB association support this scenario. Such an approach – if it proves to be meaningful – could be considered only through a very long migration phase from one system to another. This would need to be built cautiously, with the implication of the labor unions. Besides, the high level of the benefit leads to a high income effect, many people being possibly satisfied by this amount without seeking a complementary paid activity. The substitution effect contributes on the same way, due to the high level of contribution necessary to finance it.
Scenario C is probably the most audacious challenge, by lightening massively legal constrains framing the labour market, leaving it up to individual and collective negotiations. Citizens with better secured economic status are then on a better position to decide whether to accept or not professional opportunity offers, or to create their own activity by minimising their personal and family risks. The micro-economic analysis is more ambiguous, the income effect being stronger than in scenario A and on the contrary the substitution effect encouraging the activity thanks to a higher flexibility of the labour market.
Of course, the consensus that will emerge from a parliamentary work gathering representatives of all parties and the support of experts from diverse fields could finally be a combination of those three scenarios with potential integration of others approaches. In any case, no option presented in this note should be excluded without in-depth investigation.
Special thanks to Xuan-Mai Kempf for translating the text from French.
ENDNOTES
[1] https://www.kela.fi/web/en/press-releases/-/asset_publisher/LgL2IQBbkg98/content/universal-basic-income-options-to-be-weighed?_101_INSTANCE_LgL2IQBbkg98_redirect=%2Fweb%2Fen%2Fpress-releases
[2] https://www.vox.com/2015/12/8/9872554/finland-basic-income-experiment
[3] Some discussion papers from the field can be tough however well documented. For instance, in order to rebel against the home control by the family assistance administration: https://www.lesenrages.antifa-net.fr/la-caf-contre-les-femmes/
[4] Family allowances, premium for age, family complement for 3 children, basic allowance for child under three, school yearly allowance, RSA increase for each child, income tax reduction according to the number of children, tax reduction for child schooling.
[5] Solidarity allowance for elderly persons.
[6] Cf. the « Unique social allowance » of François Fillon or the IPP report: https://www.ipp.eu/publication/juin-2015-reformer-les-aides-personnelles-au-logement/
[7] RSA: Revenu de Solidarité Active, is the main French allowance providing a minimum guaranteed revenue.
[8] Based on the name of the first Nobel Prize for Economics winner, Jan Tinbergen, a supporter of an unconditional basic income, who stipulated that for each policy objective, one policy instrument is needed, and one only.
[9] Allocation Temporaire d’Attente.
