- Date published:
11:58 am, September 5th, 2013 - 232 comments
Categories: benefits, capitalism, child welfare, class war, climate change, cost of living, economy, Economy, employment, equality, families, global warming, heritage, human rights, jobs, minimum wage, monetary policy, poverty, socialism, superannuation, sustainability, tax, uncategorized, welfare, workers' rights - Tags:
The concept of UBI has a long history in New Zealand.
Of course, we already have a UBI for those over 65. Which has been extremely successful at eliminating poverty amongst the elderly, at a very moderate cost by international standards.
“In fact super has been so effective in removing poverty amongst the elderly it should be extended to everyone in the form of a guaranteed minimum income. There is no excuse for having people with inadequate food and housing in a country which is capable of supplying an excess of both internally”. http://kjt-kt.blogspot.co.nz/2011/06/on-retirement-pensions-and-age-of.html
It has been a policy plank of various minor political parties, such as Social Credit. http://en.wikipedia.org/wiki/New_Zealand_Democratic_Party_for_Social_Credit
Currently, the Greens have discussed a UBI as part of welfare and economic policy development.
Many organisations, and individuals both left and right wing, have discussed the idea. Including the darling of the extreme right, Roger Douglas.
Recently Gareth Morgan has been an advocate. He puts the case rather well. http://www.bigkahuna.org.nz/universal-basic-income.aspx
Paying universal transfers acknowledges that every individual has the same unconditional right – to a basic income sufficient for them to live in dignity. The Unconditional Basic Income (UBI) provides this.
With this basic protection in place people are then free to add to that income through paid work if they choose. Equally, they can live on the UBI and pursue other activities – doing the unpaid work of caring for children or others in their community for example, or studying full time, or pursuing new business ventures. The UBI offers the prospect of ensuring everyone has the means to live while giving them the freedom to live their lives as they choose.”
However David Preston from the MSD exemplifies what seems to be the main concern and almost the only real objection to a UBI. People may chose to go surfing instead of working. Horrors! http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/journals-and-magazines/social-policy-journal/spj10/universal-basic-income-cure-or-disease.html
The vision, of 80 year old pensioners surfing, this engenders, caused me a great deal of mirth.
In fact the only real experiment with a universal basic income. http://en.wikipedia.org/wiki/Mincome ,showed that the overwhelming majority, even with guaranteed income, chose to do something constructive. Work, study or raising children. In the 70’s in New Zealand, with a much more generous unemployment benefit than we have now, almost everyone still chose to work.
The biggest advantage of a UBI, of course, is the almost total elimination of poverty, with all the savings in the accompanying economic and social costs. There is also the not inconsiderable savings in administration of welfare, simplified tax systems and the hit or miss nature of targeted welfare. Because it is universal, there is less incentive for the wealthy to try and destroy it, to cut taxes.
The main objection, apart from the horror of some people that recipients may simply go surfing, A horror they do not seem to extend to the inheritors of unearned extreme wealth, is cost!
It is not, however, a given, that the overall cost of a UBI would be more than that of a fair targeted welfare system.
Of course those same people throw up their hands object to the cost of current welfare. They cannot understand why the poor are not made to live in cardboard boxes and starve quietly as they do in their ideal economies, just so those on high incomes can pay a few dollars less taxes.
Universal superannuation in New Zealand has been considerably cheaper and more effective than targeted schemes elsewhere.
Don’t see why a UBI should not pay for itself in the savings in administration, the decreased costs of poverty and the extra tax take from extra income within the economy. Flat taxes over the UBI rate, are possible, which should cheer up the right wing.
The removal of abatement rates for working and the removal of the penalty of extreme poverty for business failure, for those not already millionaires, can only help more people into work, study and entrepreneurship. For others, it frees them up for socially useful unpaid work, such as sport coaching, teaching and the myriads of other unpaid and unrecognized work which makes for a functional society.
Lastly. In an era where resources are running out, being able to survive without having to find ever more creative ways of using up resources, and ripping off your fellow citizens, is an essential step towards a steady state sustainable society.
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2. There’s a large chunk of whitespace at the bottom.
3. The font looks weird (smaller than it should be).
4. It appears to have been tagged in every category under the sun, including heritage and global warming.
1. Yes don’t know why. Havn’t done anything different from the last one that did display properly.
3. Will enlarge it.
$. Tagged the ones that are relevent. AGW is part of sustainability. The last para.
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Jeez Lanthanide I have thought before that you are more interested in having the trains running on time than whether they pull in at the platform where the people are. Now again.
Good one KJT Plenty to chew over, like the recipe and taste seems good.
Software engineer. Didn’t have much time, also the font was small which made it unpleasant to try and read.
I’ll sort it out. Just exit the editor, KJT.
Nope. I even tried to rebuild it from scratch but no luck. This is one for Lynn I’d say…
See above http://thestandard.org.nz/ubi-universal-basic-income/#comment-691667
[lprent: see http://thestandard.org.nz/ubi-universal-basic-income/#comment-691717 ]
It is interesting that the best known proponents of this system in the United States were two of the people most bitterly attacked by left wing members of the body politic.
The version they desired was in the form of a negative income tax, which is one of the means of implementing the scheme.
The advocates were economist Milton Friedman and President Richard Nixon.
They were not attacked for that reason. However it does show that UBI has broad appeal.
Even though the right may like it to cover bread and water only, and the left, enough to participate in society.
It’s no surprise their ideas were rejected – they probably didn’t make special allowances for union members.
Remember politics for half wits is about the colour of the flag – not the policies.
So your saying it doesn’t discourage work at all?
Do you know if there is any evidence that having no, or insifficient welfare results in an increase in jobs in a community?
Judging by the closed shops in Northland and Whangarei, during Ruthanasia, and again during the latest round of sneaky welfare cuts, decreasing welfare takes a lot of jobs from the community.
Actually, judging by the increased number of small businesses opening at home and in non-cdb locations, you could argue that the general global marketplace and it’s impact on prices and costs may have created the empty shops you speak of. Trying to argue that beneficiaries need more money because it doesn’t make ends meet, yet inexplicably they are now not consuming enough of their income to support local business really is delusional. do you know how an economy actually works? no other lefty on this site does, so i’m not holding out for a positive response to that question. and did you reference yourself like you are some sort of economic expert?
Yes, it’s actually the RWNJs, such as yourself, and the economists (although some of them are starting to wake up from the free-market delusion) that don’t have a clue.
Global marketplace doesn’t explain all the empty shops during Ruthanasia. Only New Zealand had a recession during her reign, remember.
Pulling money (spending) out of towns and out of the private sector in general causes small businesses to fail and fail in large numbers, TR.
Are you trying to argue that somehow having “acceptable” levels of welfare, whatever that means, increases jobs?
It certainly increases the potential scope for individual human activity. And all activity is work. Given that much work is socially valuable whereas many jobs are socially detrimental, I don’t see your point or concern.
all activity is work? well if that’s your definition of what is deserving of reward we may as well turn off the smart tap on this thread. It’s all stupidity from here on in. Please, do elaborate.
“all activity is work? well if that’s your definition of what is deserving of reward we may as well turn off the smart tap on this thread. It’s all stupidity from here on in. Please, do elaborate.”
Is there anything useful in that comment? At all?
You seem to be missing the basic point. The UBI is paid on the basis of all humans having inherent worth. It’s not paid as a reward for doing something. But the people that get all het up about bludgers seem to be largely unaware that most (as in nearly all) humans prefer to be engaged in meaningful activity anyway, so there isn’t really an issue around large numbers of people living off the UBI and society collapsing under the weight of them ‘doing nothing’ (whatever that means).
No, you missed the point. not unusual for you.
Anyway, would you support a UBI if there was a corresponding flat tax rate?
“Anyway, would you support a UBI if there was a corresponding flat tax rate?”
What, you mean as outlined in Red’s previous post on this that I linked to below?
Do try and keep up.
Did you even read the post from KJT today?
Yea, he referenced himself, height of conceit. I thought it was pretty much rubbish all round to be honest. The arguments proposed i’ve heard before, they made little sense then too.
Why don’t you fuck off then and let those of who are interested discuss it? All you are doing here is tr0lling. You’re not engaging with the issues and points that people raise, and you’re taking a scattergun approach to denigrating what people are saying but without any substance in your comments.
eg you asked me if I would support a UBI if there was a flat income tax as well, and I pointed you to Red’s previous post on this, yet you have completely ignored it.
You’re like a kid in the sandbox who is throwing sand in people’s faces because he doesn’t want to play the game the others are playing.
I’ll make this simple. I might change a worn tap washer today. That’s work. But since I’m not charging myself out at $60 per hour or whatever the market rate for plumbing is, it’s not a job.
If I pull some weeds, then it could be work, leisure or a job depending on the context.
If I make a bed, it could be a part of a job or just basic house work.
And so it goes on, through a whole host of activities.
Meanwhile, I never said anything was ‘deserving’ of (you meant monetary?) reward. Speaking personally, I prefer to do things for rewards that are more satisfying, and less insultingly reductionist than money.
Well put Bill.
monetary, in kind, food and shelter, whatever really. you are a fine moral champion, take your pick. You made the statement all activity is work. I can list five or six quite easily that i’d view as pleasure. surfing for one. as long as you aren’t teaching it though, given how you love context.
So having a UBI does not encourage indolence at all? not even a little bit?
What’s wrong with indolence?
Doing nothing…and do I mean nothing at all…is utterly at odds with our nature. I don’t think we could handle that psychologically.
Anyway, ever sat down and just let your mind wander…or pondered things….or sat back in contemplation…maybe allowed yourself the time to have thoughts and to follow them through? To the casual observer, a person engaged in one of these activities may be appearing indolent/lazy.
Truth is, the above activities are anything but – and can be the genesis for all sorts of productive actions.
The fact of the matter is that the RWNJs think that everyone needs to be working for a Randian Superhero and thus making them richer rather than working to make society and themselves better.
One of the most important and most difficult “tasks” for any human being is meditation. Obviously TR has never practiced this, I imagine they would find it very difficult to sit still for half an hour (let alone a day or more) without a thought passing through their mind, open to the possibility of what the buddist call mindfulness. I recommend this to every one, it has many healthful benefits it is calming, and refreshes the person. There are many meditative practices and each one is one where the person could be said to be doing nothing at all.
The new insights that may arise from regular meditation can never be achieved in the hurly burly of a modern lifestyle.
Furthermore, our current lifestyles are becoming devoid of art and culture as people struggle and work longer to make ends meet. Our theatres are closing and there is little in the way of new locally produced drama. We need to allow space for people to be able to work in the arts and music and dance and theatre without the pressures of having to earn to eat. What those creative souls produce is beneficial to us all, we are all enriched when our society has a flourishing artistic base.
Taxing the rich, who spend money offshore and on speculation, for welfare, has been proven to increase the money in the community and hence demand and jobs.
Redistributing income upwards, as we have done for the past 35 years, has resulted in decreasing jobs, lost money from the community and lack of productive investment.
The good thing about a UBI is you avoid very high effective marginal tax rates that come with a more traditional welfare system. So much easier for people to work, and optimise their lives in other ways (eg by sharing accomodation) without losing benefits.
So you are saying that welfare increases jobs? please explain your reasoning.
You appear to be replying to this
” 6.1 Do you know if there is any evidence that having no, or insifficient welfare results in an increase in jobs in a community?”
Are you sure you meant to ask “So you are saying that welfare increases jobs? please explain your reasoning.”?
[lprent: see http://thestandard.org.nz/ubi-universal-basic-income/#comment-691717 ]
Certainly, although if you don’t mind, I’ll talk about the UBI after the second paragraph rather than welfare, because it’s actually much better than welfare from both a left-wing and right-wing perspective.
People with less money spend a higher proportion of their income. Policies that lift the minimum income, therefore, are the most stimulative of the economy, and overall will make everyone richer by increasing the size of the pie, rather than struggling on how to divide it. This is of course a bit of a simplification but it gets the picture across nicely.
This is very old-school, well-established demand-side economics, and nobody who actually studied the stuff would consider it up for debate.
A UBI lifts anyone who is covered (ie. probably all citizens) out of poverty, and actually saves on a bunch of costs needed to determine eligibility for government benefits, calculate special tax rates, and investigate benefit fraud*, and it also allows you to integrate welfare into the tax department, creating better economies of scale in the public service. If you combine that with a relatively simple tax system, you can move a LOT of people into public sector jobs, by far the majority of the people who work for WINZ. If you like small government, you should be a big fan of UBI.
Finally, a UBI provides a realistic economy for low-skill work when the basic income is set high enough, allowing the wages to supplement the UBI at a rate that is reasonable for both the worker and the boss. So McDonalds can pay the $5 or $10 an hour wages it wants to while still allowing people to earn a living wage if there are few jobs available and plenty of people want them, or it will end up paying something similar today when it can’t find enough people because the UBI provides the basics and McDonalds is, for most people, an unfulfilling place to work.
*You’d still need to investigate tax fraud, but this should be much simpler if you eliminate all of the exemptions and special rules and just set the basic income high enough and have the tax curve modestly rather than being flat. And yes I said curve, but it needn’t be as much as today if we eliminate exemptions.
“Finally, a UBI provides a realistic economy for low-skill work when the basic income is set high enough, allowing the wages to supplement the UBI at a rate that is reasonable for both the worker and the boss. ”
Where does the money for the UBI come from?
Taxes, debt and issuance.
Just like all government spending.
I think you still need a minimum wage with a UBI, otherwise some employers will bludge off tax payers. Just as they do now with WFF.
I can see big low paying employers like McD’s using it as an excuse to cut wages, and hence the taxes paid from wages, to the extent that the system fails.
Oh, I wasn’t saying you don’t need a minimum wage, you absolutely do. You can just afford to have it as low as we have it now, or maybe a little lower.
More likely, wages and conditions will improve. UBI also includes children, at maybe a proportion of the adult level. The bread winner of a family will be able to refuse jobs that are boring, dirty, unsafe or overly stressful. McDs wouldn’t get enough workers, and they wouldn’t sell enough crap, because people would be at home cooking better food. Big corporates with toxic workplaces will have to adjust their culture – or they’ll never get any staff.
Whether UBI increases jobs isn’t the question. Jobs aren’t going to increase, only decrease as machines and technology do more of our work. UBI is derived from ownership of the country, inheritance of its wealth and residency. It recognises the billions of dollars of unpaid work done every day – caring for children and the elderly, staffing community service groups, growing vegetables to share, writing brilliant replies on internet sites for the education of the ignorant and the delight of the converted…
When everyone has enough to live on, the whole country wins. Government gets more tax, businesses sell more goods and services, children get properly fed and learn better, the crime rate goes down, the divorce rate goes down, and we start converting empty prisons into art centres and agricultural colleges. Roll on, UBI!
Increased spending increases jobs. It’s fairly simple. One party’s spending becomes another party’s income.
I don’t know the full details of the current Singapore welfare situation but if it remains as it used to be it might be an example of insufficient welfare leading to more jobs. The unemployment rate in Singapore at the end of last year was 2%, and it had averaged 2.5% since 1986.
Singapore has essentially no benefit system, for the general populace. There is effectively no unemployment benefit and no state supplied old age pensions. If you haven’t enough money saved when you retire it is a case of either keeping working or having your children support you.
If you ever pass through Changi airport have a look at the age of the people who collect up the luggage trolleys. They certainly all appear to be at least 70.
They also have, I believe, no minimum wage and the spread of incomes would be much larger than in New Zealand. A maid (living in) might earn as little as $5,000/ year while the Prime Minister in 2012 took a 36% cut down to a mere $1.7 Million per year. (A Singapore dollar is about the same value as a NZ dollar).
I’m not recommending the Singapore approach but it gives some evidence of satisfying your question.
Idiocy. Singapore’s welfare system or lack thereof is about 0.3% of the success recipe for the island state.
Can you provide some evidence for that statement? I would be fascinated to see anything that broke down the Singapore situation in such detail. 0.3% is such an accurate number.
Please note also that I do not like the Singapore approach. It is just a set of numbers that might be evidence about the question Tracey asked.
The evidence is anyone who knows anything about the success of Singapore over the last 50 years.
In other words you just made the number up.
And yes I do know quite a lot about Singapore.
Singapore huh, looks peachy from the outside –
The government mandated that individuals save into a “provident fund” — 36 percent of the wages of young workers — to be used to pay for adequate health care, housing and retirement benefits. It provided universal education, sent some of its best students abroad, and did what it could to make sure they returned.
– from the inside – not quite so peachy.
That’s not quite correct. Singapore appears to operate on a compulsory insurance system – Central Provident Fund – to provide similar security to our tax system (i.e. health, education, pensions, disability and maternity benefits). State housing also features strongly as a worker benefit.
As for unemployment – there is a massive non-resident workforce that can be modified to ensure Singapore’s core unemployment rate, and requirements to support the destitute stays low.
But yes, there is a greater expectation that families will provide. However it’s not really comparable with NZ when Singapore can simply shift low-skilled labour out of the country, with no benefits when it doesn’t need them or they get too old or sick to work.
As we can produce all our needs and much of our wants without full employment that may not be a disadvantage in future.
I can think of many people where it would be cheaper for us to pay them not to work. Speculators and derivative traders, for example.
Of course, right wingers have difficulty understanding people who work without being handsomely rewarded, or work when they do not have to, though they are happy to take advantage of the work ethic of people such as Teachers.
would you even be able to promote your bullshit theory to so many people without a computer? provided by someone who speculated that there may be a demand for such things. what brand do you use? is it government provided? do you think it would work as well as it does if it was government produced as opposed to a speculator gambling that needs and wants of certain countries probably can’t be produced domestically in an efficient fashion?
On the subject of teachers, if we could pay the really good ones handsomely, using some method of assessment, would you then acknowledge that appreciating the work ethic isn’t just a lefty thing? classic trying to promote taking advantage of work ethic while promoting a benefit. Such hypocrisy.
So again, do you think there will be no disincentive to work under a UBI? pretty simple question. such pathetic answers to it.
“So again, do you think there will be no disincentive to work under a UBI? pretty simple question. such pathetic answers to it.”
Yes, by and large, I think that a UBI will not disincentivise people from work. Question answered.
I think you find the answers pathetic because you don’t yet understand what the UBI really is (you think it’s welfare).
I suspect you also are somewhat of a misanthrope who projects their own shit onto the population in general ie your world view is that people are inherently lazy and won’t work if they aren’t forced to. That just says alot about you.
If more generous welfare provisions are a disincentive to employment, we’d have had higher unemployment in the 1970s. KJT already made this point. Have you any substantive response? Doubt it.
[lprent: see http://thestandard.org.nz/ubi-universal-basic-income/#comment-691717 ]
Actually, the computer came about due to massive government subsidies. In fact, that’s pretty much true of everything.
Computers were first developed via government research and only later commercialised via the private sector, which never saw fit to repay the state for the research funding spent. The internet followed a similar route, as did aviation. You would not be promoting your bullshit theories without state investment in research programs. Say thank you.
“Speculators and derivative traders, for example.”
Derivative traders are awseome.
Parasites feeding on the parasites of society.
Going to work? And getting paid something so you can afford something you aspire to have – that mind process will still go on except more often and more easily with money for transport, retraining, ability to find part-time work for child-caring parents etc.
I am sure that few people want to stay home throwing ideas and thoughts at a blog all day, for instance. Once UBI came in at a reasonable rate there would be so much positivity that there would be only half the issues and fewer really urgent ones, the environment and climate change and overpopulation and poor distribution methods will continue though.
Great article and hits the nail on the head.
Sounds a bit full of ennui. Going out socially and then not to like having someone talking to you and trying to find some common ground for conversation like – what do you do – is a bit precious isn’t it. A bit of banter would do just to get the conversation going, so you have a few things ready in your mind. And you can always deflect and say ‘what are your interests’ of course.
Seems to me to be no-brainer. If everyone was paid (for arguments sake say $500) and then taxed at a fairly substantial rate for any earned income, then, yes, it could be self funding. (I’m sure Morgan or others have looked at the funding and have well thought out scenarios – that was just off the top of my head)
On the work front – anyone doing an empowering or enjoyable job will continue to turn up and do that job. And if lower skilled or undesirable jobs are able to be taken up on a short term basis by those wishing to compliment their income, then again, there are no obvious problems.
But employers contemplating a complete reversal in the meaning of a flexible job market might be less than enthusiastic. And employers who get workers to provide them with a source of income through ‘providing’ utterly meaningless jobs…well, they’re history.
Other objections I have seen voiced on ‘ts’ pertain to people who would need more than the basic income due to medical conditions etc. Fair point….if medical care is to remain on a user pays basis. Otherwise, the objection is moot.
And in a world of peaking resources and AGW that will probably mean – how to say? – a running down of the market economy, then a cultural shift away from this idea that an earned income is the principle mark of ‘worth’ is absolutely essential.
And the money grabbers ain’t going to like it one bit. Imagine families no longer feeling compelled to hand the care of their aging parents over to the private sector and the subsequent loss of revenue for that particular set of leeches? Similar examples (were our humanity reasserts itself over financial reductionism) would probably constitute a lengthy list. And what of the prospect of community being re-established as a viable space for interactions…even to the extent that it threatens the hegemony of ‘market’ interactions?
Again…all good. Except for those who profit from this present rather sad a denuded state of affairs where we have reduced an account of ourselves and our lives to nothing much beyond so many columns of a financial ledger.
“If everyone was paid (for arguments sake say $500) and then taxed at a fairly substantial rate for any earned income, then, yes, it could be self funding. (I’m sure Morgan or others have looked at the funding and have well thought out scenarios – that was just off the top of my head)”
Links from teh convo the other day. The first one has some actual figures (although it premises $200/wk*) and shows how the taxation fits in.
*this seems to be one of the real sticking points. How do you determine what the rate should be?
How to determine the rate? Well, somewhere along the line a formula was used to determine levels of current welfare entitlements. So, wouldn’t it be a simple case of agreeing what factors (or sub-formulas) should be a part of any formulaic calculation and rolling out the result?
And if reality indicates it’s too high/low for whatever reason, then adjust $ levels accordingly or refine the formula and its inputs. Not rocket science.
“Well, somewhere along the line a formula was used to determine levels of current welfare entitlements.”
Was it? All I know is that currently base benefits are intentionally set below the level which one can live on.
It’s still unclear to me whether the UBI is a liveable income or sub-liveable. I hear two different proposals eg the $200/wk one is obviously not liveable for anyone with a mortage or paying city rent, the implication being that that income will be topped up somewhere either via wages or supplementary benefits. If it’s the latter, then that just takes us back to a WINZ style welfare system.
And how can one rate be suitable for all people?
It’s not rocket science, but it’s not that straight forward either.
Depends. I would advocate a liveable income, per capita, A lessor rate for under 16’s living at home otherwise all adults the same. So that top ups and extra benefits are only required in rare circumstances. Administering different rates for different people removes one of the advantages, simplicity.
Current individual super rates give a logical starting point..
Gareth Morgan suggested a lessor rate, but I cannot see his reasoning anywhere in his blog. may be in the book which i haven’t read yet.
So two adults with two kids would get 2 x the UBI, but one adult with two kids would get 1 x the UBI?
2 adults with two kids would get 2 adult rate UBI plus 2 child rate.
1 Adult with 2 kids, one adult rate with 2 child rate.
I don’t have the answer to eliminating all unfairness. I don’t think it is possible.
Per family or household, like the current different super rates for couples or singles have their own unfairness.
As does the opposite, For example my wife has to stay at home for a special needs child. We pay much more tax than two parents both working, although our total income is the same, or less..
I am open to better ideas however.
His reasoning, from the book, is tax rates – he doesn’t want them going over 30% or 35%. It’s a silly idea because the amount he suggests is around about the same as the present unemployment benefit, i.e, not enough to live on.
I think the amount needs to be higher, high enough that people can actually be entrepreneurial especially if they get together in cooperatives. I’m figuring at least $400/week for an adult.
Sounds reasonable amount, and I like that mention of entrepreneurial activity. There could be a lot of that going on, making a very vibrant, busy, enthusiastic, exciting and involved community.
I’m thinking it should be more than Morgan suggests, but not much more… I’d suggest less than $300.
Ensure a minimum standard of health and wellbeing… but encourage people to get out and work…
…keep the right-wingers happy too 😛 the higher it is, the more people will moan about how it encourages “indolence”
So, do additional transport or housing costs (or other sundry increased expenses) come out of the welfare budget, or is that administrative function simply transferred from social warfare to the DHBs? Either way, no savings there from streamlined administration, at best the cost is just shunted from one line to another.
But gosh, if people have the same starting point and everything how will we know who is better than everyone else?
Exactly – who will vote for extended welfare when welfare has been made less of a requirement. It’s no wonder left leaning parties only pretend to like this idea. It removes their ability to use a lolly scramble to win power at election time.
Burt, that doesn’t make any kind of sense. Care to try again?
It won’t help. He’s had years to explain himself but it comes out as gibberish every time.
Burt sees government spending as a “lolly scramble” – a very revealing insight into the right-wing mind: you have to be taller or more aggressive to get more lollies. Think Sky City or Mediaworks.
About the lolly scramble idea. I think that is called pluralism where people compete for things and finances from government. Like running around trying to grab as much of the lollies as possible for themselves.
Classical pluralism is the view that politics and decision making are located mostly in the framework of government, but that many non-governmental groups use their resources to exert influence. The central question for classical pluralism is how power and influence is distributed in a political process.
Groups of individuals try to maximize their interests. Lines of conflict are multiple and shifting as power is a continuous bargaining process between competing groups.
There may be inequalities but they tend to be distributed and evened out by the various forms and distributions of resources throughout a population.
Any change under this view will be slow and incremental, as groups have different interests and may act as “veto groups” to destroy legislation that they do not agree with. http://en.wikipedia.org/wiki/Pluralism_(political_theory)
UBI is as different from extended welfare as democracy is from “democracy” where only white land-owning men could vote.
Also, I would really like to see you pay rent/mortgage and eat and pay bills and manage the rest of your costs on a benefit budget, especially while holding down any sort of job and not being miserable. After you’ve done that we can talk about lolly scrambles.
Post of the week for me. Thank you Matthew Whitehead.
Oh – I guess the best surgeons will still be better than other surgeons. But there could well be far more of them. The poverty that has meant until now that the talented kid from the poor family has had to fore-go their dreams in order to earn a crust ‘down the local factory’ will be naught but an object of historical curiosity.
Imagine the human potentials that can be unleashed once (if) we free ourselves from the dead weight that’s wage slavery.
Rugby/rugby league has figured this out.
They will scout out players from teams from schools from poor neighbourhoods because they know they can find outstanding talent there.
I suspect that, over time, we will be able to tell who is better, by the way they can effortlessly cut back into the most critical part of the wave, drop into a spitting pit and, after a 4 second barrel, casually ride out over the shoulder and slowly paddle back out for a bit more contemplation on the value of work….I don’t expect to see tighty righty in the line up.
I would have fewer reservations if the actual costs were presented, rather than hoping that the increased direct expenditure would be matched by service efficiencies, healthcare savings and and maybe boosted economic activity. It sounds plausible, but the stumbling block for me is that $200/wk * 4mil people = $40Bil per year. Current social welfare expenditure is $25bil.
We then have the tax rate adjusted to give a tax-free threshold of $10k (UBI level), and things begin to look quite daunting.
And current expenditure in putting the poor in jail, treating third world diseases in children, dealing with the after effects of poverty such as poor uptake of education, social dysfunction and alienation, and the lack of money in the community. Is?
I’m not sure. I’m not the one advocating the UBI.
Been doing a bit of googling lately, and the gist on healthcare seems to be 8% reduction in admissions. So that’s another back-of-the-envelope $1.3bil. Law and order?? Let’s say it gets eliminated completely: another $3.5bil.
So 25+1.3+3.5 = $30bil current expenditure. Still short $10bil.
If you can provide a rough $cost of lower education attainment, alienation and social dysfunction (surely those last two are a redundancy), that would be great.
Estimates of the cost of child poverty to New Zealand are 6 to 8 billion a year. http://www.stuff.co.nz/business/budget-2013/8667633/Child-poverty-among-Budget-targets
That is just child poverty.
Can’t find any figures right away for adult poverty costs, no one seems to care, but they would have to be a least similar.
Sadly, those are costs to NZ, not the govt.
If you remove those costs to the country at large, you can tax back some of the resulting wealth into the government sector.
You’re talking like preventing a cost to NZ is not either an indirect or direct benefit to the government. (Assuming that figure isn’t underestimating the benefits, which is common when estimating social costs, that’s just the cost from eliminating child poverty. I imagine a lot of the savings being punted here are also low-balling because we just don’t know what the benefits would be and how they’d flow on. We really need someone to try the system to see!)
Also, we’re likely to need the UBI less as time goes on because, if run well, it should act as a flattening factor on the wealth curve, (which is how social support works so well in affluent communities) so if worst comes to worse, we can maintain the same tax rates while initially implementing it until many of its savings kick in. (a lot of them wouldn’t eventuate until at least a decade of running the system) Immediately switching to a low-rate linear tax system because you’ve got the basic income is a bit of a right-wing pipe dream I think, not that we couldn’t flatten the tax a bit as time goes on if it works as well as we hope. Our best bet is to account for UBI in the tax curve at first (after removing all the loopholes and most of the other allowances) and then switch to a flatter curve if necessary.
We probably also won’t need to pay the same amount for adults and kids, as kids share many of the same costs as their parents for transport, housing, appliances, etc… If you pay $100 per week for kids 14 and under, that’s about 5% less cost overall, so that’s only a $13b shortfall under your initial assumptions, or $8b if we account for reduction in admissions and completely removing the law and order budget, lol. (I’d prefer to just say $11.5b myself) Again, I’d much rather just own this cost in figuring out the tax system initally, and then reduce the burden as savings eventuate, but I understand that makes the politics of the system a much harder sell.
“Immediately switching to a low-rate linear tax system because you’ve got the basic income is a bit of a right-wing pipe dream I think, not that we couldn’t flatten the tax a bit as time goes on if it works as well as we hope.”
I don’t quite follow what you mean here. Are you saying that switching to a linear income tax system is a “pipe dream” or the “low rate” part is? I’m not sure what you mean by “low rate” either. 30% isn’t exactly low, lol. And I’d say 30-36% would be about right.
IRD has this lovely income tax calculator here:
I just bunged in $50,000 as an example. Result: $8020 paid p/a tax.
Flat tax of 30%: $15,000. 36%: $18000 (wow, flat/linear tax is a lot easier to calculate).
A basic income of $11k would mean you’d still be slightly better off. If you earn less, you get taxed less, and the UBI offers even more of a pay boost over current tax rates.
In other words the UBI acts as a kind of progressive abatment to income tax.
With a sufficient intercept, 30% is quite low. A $200/wk UBI with a 30% rate is actually a very light tax system on lower incomes and even some middle income earners. We would take in a lot less overall tax on a 30% UBI from income tax. You can argue that this tax will be offset by the additional capital gains tax, but I think the largest hole in Gareth’s model is that he’s lowering rates for income tax rates for the very rich right off the bat on the back of the CGT, rather than leaving them as is and funding the UBI properly from the get-go, then making rates flatter as it introduces savings.
My real issue is that the rate should continue to increase as income increases. A completely flat tax system is a huge gain to right-wingers, even with the intercept. This tax year, someone on a $100,000 income would pay income tax of $23,920.00. Under Gareth Morgan’s UBI with a 30% tax take, they’d pay only $19,564.50. Now, WHEN we’re making the savings that we can afford to return four thousand dollars to the most well-off, sure, they can go on the list. But honestly, I’d rather both the UBI and the rate very high, or set the UBI modestly and curve the rate. (For instance, we could make the tax rate the lesser of 50% of your pre-UBI income or 4% of your pre-UBI income raised to the power of 1.2%. With the same $200/week UBI, this only overtakes the current tax code at about a $60,000 income, and only hits the 50% rate when you start getting into the multiple hundreds of thousands for your salary, making the effective top tax rate trend towards 50% but never quite reach it due to the UBI.
What is a more functional society really worth?
But it’s unattainable if we bankrupt ourselves trying to get there.
Granted, but we make sure that progressive taxation covers it.
Unlike National that borrow for unaffordable tax cuts and then claim a surplus
Though like Gareth Morgan, and Adam Smith I think we should start to get away from income taxes and towards wealth taxes, resource use taxes and FTT’s.
FTTs definitely. Not so sure about the others.
Do you mean cashflow bankrupt or insolvent bankrupt?
I mean having an annual deficit and accrued debt so bad that either funding via taxation or printing cash/bonds will utterly fuck the people in the pocket (albeit in different ways). Not bothered whether that’s by having no money and no work, or simply needing a wheelbarrow to carry the cash needed to buy a loaf of bread.
You can also look at super costs. Over 10 billion nominal cost, but the net cost is less than half when you allow for the economic expansion from super, including income tax and GST paid by superannuates and suppliers of downstream goods and services to pensioners.
“I would have fewer reservations if the actual costs were presented,”
Again I have to emphasis the version I’ve presented is not complete. There is plenty of room to debate the numbers I’ve used for this example. With roughly 3m adults in this country the UBI at $10k pa adds up to $30b pa. With the average income at $45k over roughly 2 m wage and salary earners the 40% flat tax rate adds up to $38b… so the numbers do potentially add up. I would suggest the rest of govt expenditure could be funded from existing GST and Company Tax and a widened tax base…especially a Financial Transfer Tax (FTT) and a moderate CGT.
A rough guesstimate with the assumption that the additional $50bil of government expenditure (non-welfare) would be funded by GST (currently $15bil), company tax (>$10bil) and two new taxes we haven’t tried in NZ and have no real idea of what they’d gather. Throw in $20bil in SOE income, and we’re still short $5bil/yr.
It’s plausible, which is why I merely have reservations rather than calling it bunk. But only borderline plausible. Frankly I’d go with a graduated income tax, social welfare departments that aren’t social warfare departments, and free healthcare (incl dental) and education well before looking at a UBI.
Don’t forget that a large part of that money is returned as extra tax payments.
You may be right. I am positing ideas for discussion, not telling everyone what to do.
We should look at the pro’s and con’s of any suggested solutions. Including accurate costings.
However how is it that full and accurate costings are demanded of any ideas from the left while nationals half baked knee jerks do not get the same scrutiny.
I’ve never understood how national have the unmitigated gall to scream “tax&spend! How will you pay for it?!” when they routinely pissed away billions in borrowing every year they’ve been in govt for at least the last 30.
Your biggest problem (and it affects Morgan as well) is that you’re trying to fit the UBI into the present system and, from what I can make out, that just won’t work. We need to redesign the entire system.
We need to get away from the idea that government is paid for by taxes. What we need is to have the government creating the money and spending it into the economy with one such spending being the UBI. The value of our money would then be maintained through taxes – essentially taxes would be the destruction of money.
Here’s a flow chart.
Although it is not the “destruction of money” which lends money it’s value and credibility. It is the obligation imposed by the Government to pay the taxes it requires from you in its chosen unit of account (the NZD).
No, it’s the limited amount of it. One of the points here is that government creation of money an the taxes are used to prevent an over accumulation of money (which is actually encouraged and facilitated in the present system).
OMG, Draco, you are a social crediter! Welcome to the family. Yes, yes, and yes – we need to reclaim the power to create and control our money supply for the public good. That way, we can have full social services, state owned utilities and a basic income for everyone.
Money is a human construct that we should make work for us instead of all of us working for money. have a look at http://www.democrats.org.nz and see what we are talking about.
“Current social welfare expenditure is $25bil”
I could only find a link to a table for the 2012 budget expenditure on social welfare (on Interest.co). From that table, it looks like $9.6 bn is on NZ Super. Presuming that stays as is, the UBI would be for 4 million minus about 575,000 (at this link), or 3.425 million.
3.425 million times 200/wk (or $10,400/annum) = $35.6bn
With NZ Super that would be about $45bn
So, that sounds worse. But, if expressed as a percentage of GDP and then compared to other countries it does not look so undoable. Here’s a graph of 2009 social expenditure for OECD countries. New Zealand comes in at about 21%. Denmark has about 33% social expenditure. Now I haven’t looked at the make up of ‘social expenditure’, but if the aim – on the left at least – is to emulate countries like Denmark and Sweden in terms of social provision, then NZ has quite a bit of room to move.
Current and historic GDP is shown here. Latest figure on that graphic is about $160bn GDP. 33% of that is about $53bn.
As I said, room to move, perhaps. The idea that a left agenda should fit within current budget for social provision seems a bit perverse.
ah, thanks puddlegum – couldn’t find the pension stats yesterday. Mind blank.
I’m not arguing that we shouldn’t increase social expenditure (probably includes health ans education, is my bet), my point is that there’s a significant increase in proposed expenditure and the the proponents seem to want to fund it by assuming a flat tax, an FTT and a CGT will make up the difference.
My personal inclination is to have a UBI as a distant and negotiable objective. Start by adding more tax brackets for the higher incomes, and introducing modest FTT & CGT. See how much they generate. Spend the excess on health, housing, social welfare and education (cutting fees and increasing allowance/loan eligibility, lower loan interest rates). Then just phase up the tax-free bracket and gradually lower income tax rates, while gradually increasing the rates on FTT and CGT. That’ll give us data on how things might behave. Do it over 10 years.
I would be inclined towards something more dramatic than that.
Introduce the UBI and flatten tax rates to pay for it.
Eliminate abject poverty and give the economy a big shot in the arm at the same time.
A favourite website of mine, wonderful graphics that give you a real idea of where the money goes in NZ right now: http://www.wheresmytaxes.co.nz/
Superannuation takes close to half the MSD budget, followed by DPB, Student Loans, Invalid’s Benefit, Accomodation Assistance. Unemployment Benefit comes in at 6th largest expenditure for MSD budget. Less than 1% of total tax take.
Unless the UBI doesn’t actually work in practise, so we end up like Greece or the Weimar Republic.
Even if it does work in the longer term, a seismic shift like that in the economy will squish people. Rogernomics also caused problems because the economy changed more quickly than some people could keep up with, so quite a few farmers (for example) ended up losing everything and topping themselves.
Please explain how flushing the lower end of the socioeconomic scale (“flushing” in relative terms, it won’t actually be huge amounts of dough) will “squish” anyone.
It will be potentially quite tough for the IRD and WINZ as a lot of bureaucratic complexity will be eliminated.
As for going bankrupt… that depends how well the numbers are run in the first place, and how well it’s implemented. Even then, it would take several years of abject failure before we reach Greek proportions of debt.
It’s an economic transition. We have no real idea where the dollar will go, for example – if it increases 20c, then a whole bunch of exporters will lose millions.
Then there’s interest rates, and the basic geographic redistribution of cash. Someone well-leveraged at the moment has a faaaaarrr-left coalition come in in 2014 that does a revolutionary UBI/FTT/CGT/flat tax/wealth tax transition inside a year, all of a sudden they’re massively over-leveraged and the business is going under. A little bit more time would give them the opportunity to adapt their business to the changing climate, rather than shut up shop immediately. And that’s even if the new system is sustainable and equitable in the long term.
I tend to go with McFlock here.
Too rapid a transition can have very harmful effects, no matter how effective the final goal..
Changing anything without a full idea of the downstream affects should be approached with caution, using the best information, prototyping (Like the mincome experiment), obtaining consent from most of the community along the way, and a careful eye on results.
Unlike the way Rogernomics was forced on us in 1984. Because Milton Friedman and his cargo cultists thought it was a good idea.
Another argument for BCIR, so that a knee jerk set of politicians cannot reverse changes at whim after 3 years.
For example we could start with a tax free threshold, removing GST, a more progressive income tax and welfare rates which reflect costs.
Reversing the present approach of “trickle up”, setting welfare rates below costs to try and force people into employers shitty underpaid jobs, and destroying and selling off infrastructure.
The next Labour Green Government will be doing much of this anyway, if they are serious about reversing the wreckage of 35 years of crony capitalism and neo-liberalism.
Flat income tax – Gareth Morgan covered that pretty well.
I don’t understand why you started talking a tax-free threshold of 10k. Don’t give any tax-free threshold. A UBI should already give more than 10k/yr in the hand after tax.
If tax abatement is removed and everyone pays 30-36% income tax, they basically don’t miss it, there’s no “upper tax bracket”, and everyone under about 60k is still better off because the money they get from a UBI more than makes up for the extra tax they pay.
As Gareth Morgan put it, it actually gives more incentive to earn MORE money because a 10% pay raise is 10% no matter how much you’re earning without any thresholds to worry about.
Morgan also recommended a CGT, but his brand of CGT is where I disagree with him. He was saying something along the lines of taxing the first $30k/year or first 100k or something, I don’t care how much it was, it’s a regressive tax and I disagree with it. Labour’s CGT proposal is a better one.
The UBI isn’t taxed and doing so would eliminate it’s ability to bring about progressive taxation with a flat tax.
I suggest you go back an re-read what he wrote because what you wrote there has no conjunction with what Morgan said.
Apologies, either I’m mixing it up in my head with something else or I completely misinterpreted Morgan’s proposed Capital Tax.
It seems he wasn’t interested in a Capital Gains tax at all, more a direct Capital Tax. I’m still very apprehensive about it and not at all sure whether it is a better taxing model than Labour’s CGT. My feeling is that taxing gain or profit is a better idea than just taxing ownership of wealth and then offsetting that against expenses, as Morgan suggests.
Either way I don’t have a strong opinion without having a lot more information at my disposal. The main point is that Capital-related taxes are one alternative way to finance a UBI.
[lprent: Currently banned. added an extra week to the 25th and added to auto-spam.
Another netiquette is that if banned then it is inadvisable to comment prior to the end of the ban. Normally I’d just double the ban on *every* comment. But treat this as your warning. Have you read the policy yet? ]
So… I would actually be able to do what I want with my life? Weird…
@ emergency mike.:…. “I would actually be able to do what I want with my life? Weird….”
….In my dream world : ….IMO a UBI would be fantastic …ie more time to make a garden and grow your own veges…..home cook/preserving/jam and pickle making…look after kids, friends , or others in the community/…time for sport and holidays …get involved in art …or winemaking …. cheesemaking ….learn a skill…time and financial security to embark on a new education/ career etc etc..
….more like simpler olden times…..less need for fast convenience foods and instant stress relievers…give caregivers financial dignity ….give artists time and financial relief to pursue their art…enable time to enable a more caring society
…probably reduce costs for prison population and mental health costs from stress etc
Everyone could be a winner and richer in the best possible way…would create a more egalitarian society …one of the best things Gareth Morgan has advocated for
I doubt anyone would willingly want to stay on a UBI. Its little more than a bare basics proposition that would help people who for whatever reason could not find work or were unable to work. An enhanced benefit of sorts.
Its always been a good idea for a variety of reasons, personal dignity, reduces crimes of desperation, social poverty and mental illness that is often its by product.
Of course, crap bags like National abhor the idea as they then have no one to blame for their gross incompetence and usury.
I think a UBI would be far better then the present system. For me it means I would be able to work (relief teaching) when I am well and not have the stress of trying to work when I have a ‘flare-up’ (rheumatoid arthritis) At the moment when I earn over the allowable threshold I stop because it’s not worth the hassle with Winz. The present system seems to assume that people are either fully employed or have no work. It is poorly designed for those who have part-time or casual work. Hopefully it would also remove the stigma and the judgmental attitudes of those who don’t have a clue about how chronic disease affect people.
I think a UBI is a good idea. … but I have not seen costings. A basic level, just to keep people a step up from absolute poverty is the way to go. Couple with a flat tax, and other policy settings designed to promote asset (including share) ownership and high levels of growth. Make New Zealand wealthy.
A UBI is a good alternative to the current welfare system but it needs to incentivise effort and be coupled with the full range of policies to go for growth. Low tax, low regulation, widespread asset ownership.
On older people – NZ super is barely enough to live on – but what helps a lot of old folk is they have high levels of home ownership. End up at 70 as a renter with no savings and NZ super does not look so flash.
We have had 35 years now of low tax and low regulation.
While countries with higher taxes, Government intervention and regulation have forged ahead of us by all measures.
Where is the growth?
“widespread asset ownership” I take it, from that statement, you have now changed your mind about selling assets owned by 100% of us to less than 2%.
““widespread asset ownership” I take it, from that statement, you have now changed your mind about selling assets owned by 100% of us to less than 2%.”
No I am talking about ownership like Australia -when you retire you are getting dividends in the mail, and your super assets are share based.
You don’t own SOEs. The Crown owns them.
“While countries with higher taxes, Government intervention and regulation have forged ahead of us by all measures.”
Regulation is only growth enhancing of it is high quality regulation. Getting it right is very difficult.
Are you really sure that overall tax levels (or siize of the public sector) is positively correlated to economic performance in the OECD over the last 20 years? What is your evidence? And please don’t say “Australia” – Australia’s public sector is smaller than NZ’s, even including all levels of government in Australia.
I thought the evidence was that there was not a strong correlation between the size of the public sector and growth. What is important is the design of the tax system, and the quality of regulation. Apart from France (a terrible performer) there are no OECD countries moving in the direction of higher marginal tax rates. Also, all OECD countries (again except France) are making a concerted effort to lift the quality of regulation.
its ridiculous to have your retirement assets in shares.
Shares can crash and go bye-bye, sometimes within months, sometimes over weeks, very occasionally within a few days.
Actually if you compare by the per capita size of the public sector those whose public sector spends the most per capita have the highest growth.
Some cases like Switzerland and Australia and Norway the higher public sector spend has been extremely successful in growing the economy to the point where the private sector has become a greater percentage of the economy.
Conversely, Every country which has gone for austerity in State spending has gone down the tubes rapidly. Which is why the IMF are now telling them to stop cutting.
It always amuses me when Singapore is touted as a triumph of the “free market”. The whole place is run as a giant SOE. Very few places are as controlled by Government, as Singapore.
While it’s good to see some common ground, I think the best way to settle the differences between you is an evidence based approach.
KJT has cited unnamed countries (I can hazard several guesses at which ones), but can Srylands?
As Warren Buffett has recently pointed out, high taxes never deterred investment nor growth – cf: US history, and low regulation is a faceless bureaucratic serial killer, cf: Earth.
No, that would continue to make the majority poor while a few get very, very rich.
No – the new wealth would trickle down to the poor. Everyone will be betetr off. We need to go for growth. Redistributing wealth in a stagnant state dominated slug fest will make us a laughing stock at APEC meetings. Imagine when the Finance Minister turns up to give his annual policy report at APEC and says “We increased marginal tax rates and we are “intervening” more”. He would miss out on the goofy shirt.
Trickle Down has always resulted more in Trickle Up with the resulting increase in poverty to go with it.
Actually, it’s the state that pushes innovation.
And to be honest, I really couldn’t careless what APEC thinks. Why would I when they’re still following the delusional free-market BS that’s just been proven to be wrong?
What APEC thinks will highly motivate the Finance Minister in the incoming Labour-Green Government.
I would rather deal in reality than make believe.
They’re the ones dealing in make-believe along with most economists and political leaders. This is the problem that’s getting in the way of the needed changes.
“This is the problem that’s getting in the way of the needed changes.”
I am simply saying that the role of regional and international economic institutions like APEC and OECD will remain predominant under teh incoming Labour-Green Government. You will not have a Labour Finance Minister going along to APEC meetings telling his counterparts their policies are fundamentally wrong. NZ is not going to walk away from those forums. You are wasting your time if you are assuming othwerwise.
I wasn’t assuming otherwise, I was pointing out that we should walk away from those institutions.
“I was pointing out that we should walk away from those institutions.” Walk away from the OECD? You are a joke.
Can you please persuade the Greens to adopt this as policy?
We probably will not need to walk away.
Even the IMF are now admitting they were wrong about policies such as “austerity”.
Unlike Srylands, there are people in those organisations intelligent enough to know the neo-liberal paradigm is not working.
I didn’t think anyone still believed in the “trickle down effect” after 35 years of waiting for it to work. I think it is time we laid that idea to rest.
Cutting taxes for the rich has not resulted in more productive investment.
Investment in New Zealand industry has been dropping rapidly since 1984.
The USA had their period of highest prosperity when the top tax rate was 91%. FFS.
We gave the rich more money and they used it for Hawaii holidays and speculation in existing assets. Notably, in New Zealand, pushing up land prices so we cannot afford houses or farms.
That rushing sound with trickle down is simply the rich pissing on the poor.
We have to recognise the natural flow of money and financial assets in a capitalist economy. It is from the poorest, upwards to those who control and own the capital and the assets in an economy.
The role of Government is not to help and accelerate this process (fuck you National), but to act to redirect and transfer that momentum and build a strong inclusive society despite of it.
New Zealand has about 10 people who are very very rich.
And how many are living in abject poverty on $200,000 per year, by your estimate?
I would think they all were.
After all how is one going to keep the Gulfstream jet going, or even be able to replace the Bugatti Veyron when the ashtray was full? God it must be hell to be as poor as that.
He’s actually got a ridiculously high figure in mind when he gives a figure of 10 people though.
That, according to the NBR rich list, means over $800 million which would provide you with an income of at least $100,000 per day.
$200,000 per year is comfortable but hardly “very very rich”
If you live in Auckland in a decent suburb and have a couple of kids I think $200,000 is the minimum income you could have and lead a decent lifestyle – i.e a decent house, a car, putting aside some money for returement and a holiday with the kids every year.
$200,000 would not allow you extras like a luxury car, a decent boat, and overseas holidays. For that you would need an income of $350,000 +
I would add that after the first couple of years of the wage inflation we will get from a mandated “living wage”, $200,000 per year will not go very far at all.
you’re a joke.
No, that was a statement of fact. As the saying goes: Truth hurts.
I’ll tell the bank you said so.
Did you ever see that Australian film “The Castle”
The best response to srylands is probably the line out of that movie.
“Tell him he’s dreaming”
No srylands likes coming here because people take him seriously and make him feel like an important and real person. He is a bloggo-masochist. Possibly some political student could, to earn some extra money, run a phone political-talk service for people who want to be insulted. I Think Therefore I Am is the background to this need, in spades, when it comes to such people.
I just love how he’s completely out of touch with literally 80-90% of people in NZ. Absolutely no idea of how people live. I mean, I’m no expert, but this guy takes “no idea” to beyond Aaron Gilmour levels.
An interesting issue; what is the level that most people in NZ think of as being rich?
I always think that it is the Lotto top level prize. For most people $10 million will free them from daily cares, can give them a comfortable lifestyle and will make work an option. So lets say out of the $10 million, $5million is spent on a house, cars etc and for family (adult siblings, parents, adult children), leaving $5million invested. That gives an annual income of $250,000.
That is why $10 million is the top level prize. The US clearly has a different perspective since their top prizes tend to be over $50 million.
Of course $10 million is not rich in the sense of private jets, large yachts etc, but not many NZer’s have those kinds of aspirations.
It also signifies where a high tax rate ought to cut in.
On one of my posts, I postulated two higher tax rates that a real left wing govt would implement.
The first is the standard higher rate that Labour likes, which is 39%. If you took the Helen Clark level and adjusted it for inflation, it would cut in around $100,000.
But if you want to also get to actual high income earners, there is a case for a higher rate of say 45% at $250,000. This is going to get corporate execs, big city lawyers, finance people etc. In short all the people that Labour thinks of as being rich (well, to be fair in the view of many NZer’s).
Going above 50% is risky, since there is a deep antagonism if people think they pay more than half their income to the Govt. Contemporary France being a case in point.
Jeez, most people in this country live on less than 50k per year, many far less.
srylands is a fucking idiot and doesn’t know jack about anything – he doesn’t even know what the gst rate is ffs- but Wayne, you were a cabinet minister.
You know what most people live on. You have no excuse for spouting this bullshit.
Wayne, as you well know, a 50% top tax rate would only be applied to the additional marginal dollar earned. Say over $250K pa.
The effective income tax rate for these people will still sit between 30% and 40% for all but the most massive earners (say those earning well over $1M pa).
Note that there were the same objections to the original introduction, and every extension since, of social security, the unemployment benefit, sickness beneift, ACC and the DPB.
1. “We cannot afford it”
2. “People would stop working”
3. “It will bankrupt the country”.
Over time these have all proven to be wrong.
We could afford it . In fact ACC is so affordable it is accumulating money, instead of paying claims, for some reason, probably to do with National’s mates getting their greedy hands on the surplus in future.
State social security and welfare have proven to be much cheaper than private provision.
Christchurch has shown how unreliable and inefficient private provision of insurance often is. social welfare is a mutual insurance, if you like.
A UBI should involve replacing all current welfare payments, including ACC and super at a liveable rate.
And, as mentioned above, a lessor rate for under 16’s living at home.
I know average wages are around $50,000. Of course per capita incomes are lower, since they cover citizens, children, those on NS and those on benefits.
My point is the level of capital and income that most NZer’s would regard as rich.
And Colonial Viper, I do know the meaning of marginal tax rates, so of course I was only talking about income above $250,000. But I stand by my point that once you go to a 50% rate, you get a level of political reaction that you would not get at 45%. And it influences people who are not on $250,000, but imagine they could be.
No, you said the amount that would make work optional.
Stop shifting the goalposts, Wayne.
I agree with that point that Wayne makes. Taxing at 50% or over so that government is making as much or more from each marginal dollar earned is not a good system based on fair treatment for everbody. And I actually think that everyone should be paying some tax say at 5%, once over age 18 or something, to protect pocket money, students and young ones trying to get established. You pay tax as is reasonable and fair, and you are helping to support the economy that supports you, and is run to give you opportunities to do well, should be the basic reasoning.
Wealthy people should be contributing through GST, through taxes on house profits, through stamp duty, and some estate and gift duty, Tobin tax on financial transactions – a smorgasbord of possibilities.
Can you point to this type of reaction from when we had a top tax rate of 66%?
The only people who whinge about taxes are the rich and it really doesn’t seem to matter what the rate is – they’ll always say that it’s too much.
What inflation from a living wage? Cite your sources.
The UBI seems to me to be something of a crazy idea.
We have NS because people over 65 are not expected to work.
But people between 18 and 65, to a greater or lesser extent, are expected to work.
Reasons not to work are child raising duties, sickness, disability, and unemployment. Of course in a capitalist society there are some people with enough income generating assets that they might not need to work.
So a system of UBI that fundamentally cuts across this expectation of work seems not sensible. There is too big a risk that there will be enough people, if they had a guarantee of an income at say NS levels, who would choose not to work, even though they could. In essence they would choose to live off their fellow taxpayers without any obligation to them. But if enough people make this choice, there is a huge risk there will not be enough taxes to provide this option.
Not to speak of the problem of undermining the social contract that currently underpins the welfare system.
I am hardly surprised that Greens are interested in this, it seems eccentric enough for them.
But if Labour entertains it, well all I can say is enjoy a few more years in opposition.
“The UBI seems to me to be something of a crazy idea. “\
I am not sure. If you set it at a bare subsistence level and get rid of WINZ it should be OK. I have said $15,000 but nmaybe $10,000 is the better option. If someone wants to live on $10,000 good luck with that.
I would not set it at NZ Super levels. I think raising NZ super is the way to go but introduce it at 70. We should all be able to work till 70.
Ah no. What kind of fantasy world do you live in?
My parents turned 70 3 years ago – born in 1939. By the time that they’d turned 70 they’d had three knees replaced, two ankles, a set of rubbing shoulder tendons teflonized, and some nerves zapped in a heart in a beta test to get rid of debilitating arrhythmia that had consigned my mother to her bed for a year. Neither spent much of their life as manual workers and had spent most of their working lives as various types of managers.
My various relatives who do manual work have their bodies wear out even faster.
Now I may be able to keep programming until I’m 70 and I’m determined to give it a damn good try – unlike Mike Smith I hate golf. But like r0b I’ve already had several close encounters with various types of OOS – our common occupational disease. My eyes have been changing relatively rapidly and I’m wandering around with several sets of glasses to get 20:20 at different ranges. I’ve had a nice myocardial infarction and a stent – probably mostly due to a sedentary lifestyle that is likely to cause problems over the next 17 years… The real question is if I get one of those nice interesting diseases that makes my vague short-term memory but deep long-term memory imbalance any worse…
In other words you’re full of crap. It is a stretch for many people to get to 70 while working. Push it to 70 and most people my age will start asking what in the hell we’ve been paying for all of these years. My mandatory superannuation contribution since 1976 has been in the order of half a million dollars *before* you count the time value of money into it.
So far it has gone to paying for other people. This was in fact a daft policy foisted on me by a National party using short-sighted demographics back in the 70’s. The mere fact that we’ve had idiots like yourself consistently voting to spend that money on tax cuts for the affluent is completely irrelevant.
Trying to push the super level up next time will just result in a government being voted in who will raise taxes on the National supporters who grew wealthy and accumulated non-liquid assets. Time they payed our funds back.. As this government hasn’t been accumulating the funds to cope with the age bulge – I suspect that is what is going to happen anyway.
yes, I think many people are worn out and/or burnt out by their mid-60s.
I like the idea of working part time til I’m 70. I’m on my 2nd career having given up the energy-intensive teaching carer. This week, somehow, many of the things I’ve been doing in my 2nd career have seemed to gain traction, with people commending some of the things I do well in that job and offering me extra work in that area – opening up some possibilities for some freelance work.
So I’ve been running around doing some extra work, with no time to spend on my planned personal, non-paid research projects…. and I’m a bit tired. This is not what I had in mind for my 2nd career. It seems hard to work only part time doing something interesting and useful.
The whole work system needs restructuring so people don’t necessarily burn out early, can work less than a 40 hour week throughout their work lives, and so there is enough work for all those that want it. UBI could help with that re-visioning.
“UBI could help with that re-visioning.”
Has any country in the world successfully introduced a UBI?
Has any country in the world attained success without one?
(Yes, I’m asking you to define “success”. Without this definition your question is meaningless.)
We did, for those 60 and over.
I’ll just mention Lynn that I read that a dietitian found that the need for Vitamin A rose with increased neon light levels and screen watching. It may be that a bit of extra would be good through food rich in Vit A or careful doses of VitA and D in suitable proportions and not too high Vit A as its retained and accumulates in th body.
And if your Maori and male – well forget it!
“So a system of UBI that fundamentally cuts across this expectation of work seems not sensible. There is too big a risk that there will be enough people, if they had a guarantee of an income at say NS levels, who would choose not to work, even though they could. In essence they would choose to live off their fellow taxpayers without any obligation to them. But if enough people make this choice, there is a huge risk there will not be enough taxes to provide this option.”
Wayne, what evidence do you have that a UBI would mean lots of people would choose not to work?
Well it’s more likely there’d be little incentive to do low paid work for employers that exploit their workers and don’t produce anything of great value to a large section of the community..
It’d mean that employers would need to provide work that contribute to the community and/or provides an incentive for people to work for them.
None as the Mincome experiment showed – people kept working. Wayne’s real problem with a UBI is that it will drive wages up and arsehole bosses won’t be able to employ anybody at all as people will actually have a choice. IMO, a UBI will increase the amount of cooperatives as people look to work with people they like.
“it will drive wages up”
Looking after a newborn IS work, especially if you are recovering from a delivery and lactating. Studying in school IS work, especially if you are also coping with rapid physical growth.
Wayne, please answer Weka’s question: where’s your evidence? Have you looked for evidence that would contradict your opinion like an intelligent person would?
If you have, you might have come across the Mincome experiment.
Sure, there is a drop in employment among new mothers and young people, and a corresponding lift in graduation rates, and fall in hospital admissions.
Can you see an advantage to having more kids completing their education? Or are you going to stick with your ideology?
“So a system of UBI that fundamentally cuts across this expectation of work seems not sensible.”
I think your analysis is a bit too simplistic, Wayne.
For example, have you heard of the ‘hedonic treadmill’? There’s debate over it and the basic idea has been modified but, nevertheless, as a rough rule of thumb it appears to be broadly true.
That is, people habituate (come to take for granted) improvements in material circumstances and other conditions. That leads them to seek further experiences (including increased living standards) to provide an improved sense of wellbeing.
It is often used to explain why people and populations continue to produce and consume more material goods while not rating their wellbeing any higher, over time.
Applied to the proposition of a UBI, it suggests that the motivation to work (and certainly to be active and creative/productive) would not be undercut because that motivation (to be active and productive) does not come solely from avoiding destitution: It comes from the never-ending pursuit of wellbeing.
Beyond that concept, there’s also the fact that human motivation has evolved to be highly attuned to social expectations. Given a stable social world (which, admittedly, tends to be undercut by the logic of capitalist imperatives) humans are sensitive to being judged/evaluated negatively. So, in such stable arrangements, the strategy of ‘social loafing’ is difficult as others will be well aware of who is and isn’t pulling their weight.
Further, as intelligent cognitive and social animals humans naturally seek out novel and interesting experiences and, given the opportunity, engage in highly creative play behaviour.
A UBI may well provide just the right conditions for that inherent human tendency to be expressed in all sorts of innovative ways since it provides a setting of safety and security that encourages this creative, playful approach to the world. That approach is also known to allow for the development of skills and social capacities and is, therefore, absolutely central to being human.
In fact, when I think about what is now known about the nature of human nature, it could only be in an environment that utterly distorts that nature – e.g., by exhausting human beings with tedious, repetitive ‘work’ that provided no expression for that creative, inquisitive and playful nature and then proceeded to dull the pain of that ‘work’ with passive, predictable media experiences all lived out in a socially fractured world of transient relationships – that a UBI could possibly cut “across this expectation of work” …
Oh, I see what you mean.
That’s what you’re afraid of – that people would take the chance to avoid just such an environment that is so out of tune with human nature? Got ya.
Then again, maybe out of the ashes of that unfortunate environment something more amenable to human nature might emerge?
A most valuable contribution! Thank you.
” Has any country in the world successfully introduced a UBI?”
Which countries do have this system? And this is a serious question. I am interested in looking at them to see what way the went..
Several resource rich countries have UBI.
Not really helpful to our discussion though, as they are rather different.
Because of their wealth their UBI are at a level which really does make working unnecessary. And continuation of the economy after the resources run out, difficult. Like Nauru.
Being the first to try it is not necessarily an argument against.
New Zealand, in the past was the first with many social initiatives. Most have been rather successful.
I have talked to many people who regard our ACC system as an ideal model, for one, and regret that politics and vested interest prevent a similar system in their own countries.
As a bit of a thought experiment: Consider how much faster the USA may have recovered from the GFC, if they had used the “printed money” that bailed out the banks for a UBI, instead of giving it to the finance sector to continue to play silly games with.
We have for over 65’s.
there are already references in the original article to working examples of a UBI. Unfortunately no country has been brave enough to do so on an adequate scale, but there are exmples of it here.
Thank you. I shall be interested to have a look at them.
@ Iprent re arrhythmia and your Mum…arrhythmia can be caused by mercury fillings…i know of two people ( one was a lawyer with a pacemaker ) who have had their mercury fillings removed and been chelated for mercury poisoning and their heart irregular beat problems have disappeared. It is possible to be tested for mercury overload
@ karol “many people are worn out and/or burnt out by their mid-60s”………Agree with you ….it shows the real need for a UBI….so people can choose a more healthful balance in their lives….and not drop almost dead by the time their retirement comes around…a UBI could save on hospital and other medical care
Not in this case. Just had a couple of pacemaker nerves firing out of phase in a ventricle. They did some endoscopic surgery into the heart and fried the off-beat ones. Worked spectacularly well.
Overlooked in all this is that the current regime includes a DISincentive to work. It’s called the Unemployment Benefit.
If you don’t work and register as a “job seeker”, you get money. If you’re on the Unemployment Benefit, it gets taken away from you when you start earning more than an utter pittance: $80.
The incentive is to either get an under-the-table job and commit “benefit fraud”, or simply feel utterly demoralised and don’t work at all. An indolent and utterly unfulfilling life.
A UBI removes the disincentive to work. It doesn’t change anything for people already on the unemployment benefit now: except YOU DON’T GET PENALISED FOR WORKING.
I’m surprised nobody has mentioned this yet…
“I’m surprised nobody has mentioned this yet…”
That is the main reason it is a good idea. But I don’t buy the line that everyone can have a UBI and live like flower children. In NZ it would be a Basic income – designed to replace the welfare system. But at the end of the day a UBI is welfare. We are saying yep you can stay on welfare forever if you are happy with that. No work test no hassle no abatement no means test no nothing. But it is still welfare. It is just set and forget welfare. So we can get rid of the WINZ machine.
Of course it would be a basic income. That’s why it’s called a Universal Basic Income.
Welfare: as in faring well. That’s what we want everyone to do, right? People falling through the cracks is why our streets are filling with beggars. I counted 6 beggars on Willis St the other day. There were zero in pretty much the whole city 6 years ago. This is unconscionable. Something has to change.
I would definitely be keen on a UBI set closer to the current dole payment than say the super payment… so that it’s (verifiably) enough to survive on, but if you want to live well, want to take advantage of the wonders of a modern capitalist society, then there’s your incentive to work.
This should also keep nasty right-winger bene bashers at least somewhat mollified that nobody’s getting too much of a “free ride”.
@sryland….with a UBI….you might feel less pressured to earn the BIG BUCK….and feel relaxed enough to take some time off work ….and get on your bike …grow some veges….do some meditation…..come to the wisdom that we don’t need BIG Motorways for more rushing around…..you might live to be into your 90s like a flower child…or 103 like the Queen Mother with her gins and homeopathics and corgis….
….you are on the way….little baby steps….. you should commended for wanting to get rid of the WINZ machine!
It differs from welfare in that it assumes that everyone has a basic worth just for existing. Some of us love that concept, but the righties generally hate it because they prefer the idea that being poor is some kind of divine punishment.
I don’t think you can even pigeonhole that belief as right-wing.
It’s a myth perpetuated by the right for sure, but it seems to be really pervasive in NZ. Perhaps because of the puritan backgrounds of our ancestors.
The argument seems to go that if you’re poor that means you aren’t working hard enough. And of course by extension, all people with high incomes are assumed to be working hard.
Unfortunately this is built on a very flawed assumption: that hard work is always well paid – or paid at all.
As part of that assumption is this concept that any work that isn’t paid actually isn’t worth anything.
It’s all a big fat fairytale, someone needs to wake up these dreamers.
Oddly, the higher my salary has risen as I have moved from job opportunity to job opportunity, from $80K to $125K, the lower my workload has been. I can only assume a CEO does nothing at all.
“A UBI removes the disincentive to work. It doesn’t change anything for people already on the unemployment benefit now: except YOU DON’T GET PENALISED FOR WORKING.”
Yes that’s a very important point. A point those like Wayne fail to see, because they think that everyone will suddenly want to stop working when in fact nothing could be further from the truth. And those who maybe do stop working in a “job” would be adding to society in much more creative ways.
Work is what most of us do everyday, paid, unpaid, underpaid (often). UBI is a classic solution to the stigma of ‘welfare’ plus Pulla Benefat would be on it too! No more need for her punishment system or her job. The core point for me is the abatement angle.
Something has to be done there are more beggars in my neighborhood too as Chrunchtime notes upthread.
That we have people who are inadequately fed and housed, in a country with more than enough resources and wealth to feed and house all of our people, is a disgrace.
Artwork, once the artist dies, racks in millions… …the rich argue because they rack in millions they shouldn’t be paying as much tax… …obviously there’s a huge story here. That the value of money isn’t based on how hard one works, how competent one is, how unique, rather our current cultural practice is that once you have huge wealth you have a right to hold on to it indefinitely, creating a dynasty. The more bland the argument, the more stupidly rich, the more valuable your input, your worth to society is.
A universal income is essential for a fair society, but without a progressive tax system to strip the wealthiest (since the free market fails to) it just won’t work.
The thing is, a UBI is a kind of progressive tax system already. Changing to a UBI + 30-36% flat income tax means everyone earning less than $50k-$60k will be better off than they are now.
It also minimises the possibility of avoiding income tax if everything is taxed at the same rate, you can’t use dodgy bookkeeping to duck into a lower tax bracket (a common technique) because there isn’t one.
I know the Nats use this line all the time when it comes to removing top tiers of income tax but I think they have a point. People with lots of money have so much opportunity and resource at their disposal – and incentive – to do crappy dodgy things like this.
There’s an easy solution to that – no deductions. Make it so that people can’t skip paying the tax that they owe.
We at one time had taxes well over 50%, there’s nothing wrong taxing massive, in fact its necessary to over tax the richest as much as its necessary to under tax the poorest. I don’t see how a UBI should mean the richest get to freeload, since this is essential what they do. Once we, by our shear weight of numbers, created multiplier effects that lower the cost of water, food, energy, goods and services, etc, there is now need to have massively wealthy people who some how have a claim on the rents of all that collective effort. In fact its bad capitalism, since we want the new creators of wealth to have the ability to rack in rewards for their own toil. Just take the vulture investment industry which essentially transfers innovation into the hands of those with wealth – unless its something highly obvious which should never have gotten a patent (take dna of organisms, its hardly requires any intrinsic effort). Real innovation occurs when nobody is watching i.e. those who have cornered the market with their own highly leverage products and services. The very people who donate to the neo-liberals are those dead set on either keeping their existing rents, stopping new upstarts, or worse buying how those who may upend them and either bury the innovation or in the rare event milk the new for all its worth as they brought it for a song. Capitalism, like anything, has parasites and its government job to regulate the parasites, I DO NOT SEE HOW A FLAT TAX IS EVER A GOOD IDEA.
Progressive taxes for the top was the compromise, on the basis that they were sufficient to cull the parasitism of a small elite. Flat taxes means the poorest and the richest are the same, they are not, wealth is power. A UBI with a flat tax is worse than our current mix as it locks out progressive taxes, didn’t you see the wealth gap program, essentially the few have now cornered the rental takings of the poor, the middle classes and even the rich, the introduction of a flat tax and a UBI would only ENTRENCH that system.
Yes a UBI, but without progressive (even excessive onerous taxation of the most wealthy) is economic capitalist suicide since it sucks out any chance of anyone ever competing witht eh few 1% a the top. Only those born to massive wealth will.
Are you familiar with the math of how a high flat tax rate with tax free threshold works? It is actually very progressive.
Assuming a flat tax rate of 40% and an income tax free threshold of $15,000…people on $15,000 pa pay no income tax.
Those on $30,000 pa have an effective income tax rate of 20%.
Those on $250,000 pa have an effective income tax rate of 37.6%.
Those on $2M pa have an effective income tax rate of 39.7%.
Then if you can GST and add wealth, inheritance, FTT and CGT. (CGT really just being income tax).
I presume you mean ‘remove’ GST. And maybe have ACC levies kick in only above $15,000 pa. But yes, exactly.
Yes. though a suggestion is replacing ACC with the UBI also and adding the levies to general taxation.
And fining the negligent. Enough to encourage a genuine interest in workplace safety.
Although there are political and PR advantages and to having the ACC levy as separate and identifiable. It helps insulate it from the meddling of any specific government.
Getting rid of the ugly, regressive GST is a real major, however.
Colonel, I agree. Replace GST, which is essentially a poor tax, with the Robin Hood Tax or FTT. Set the rate so low that low and middle incomes and small business scarcely notice it going out, and make sure that every gambling speculator and money marketeer also pays it, all the commercial banks pay it and the watch the cash roll it.
The only unknown is how much of a brake it will be on speculative activity. Still, investment money will be redirected into the real economy of goods and services, so we win anyway. Start with replacing GST, and then if it works well (so cheap to collect, so unavoidable) it can extend to cover various other forms of tax step by step, adjusting the rate as it goes along.
Don’t just take GST off fresh food – take it off everything.
You missed the point. Massive wealth at the top isn’t being snuffed out. Sure moderately rich are by ponsi schemes, and the old are wiped out by the old bad accountant. The massively wealth avoid paying themselves the income. So there will always be a need for a upper tax to contain the super wealthy.
And therein lies the problem with the debate, the UBI does not need a flat tax, a flat tax is an addition of some proponents of the tax change. And notice how we all now started talking about the burden on the wealthy (or not) rather than the whole point of the UBI which is to alleviate the poorest. Talk about spinning the issue into the hands of a envy tax scenario.
“Massively wealthy avoid paying themselves the income. So there will always be a need for an upper tax to contain the super wealthy” doesn’t make any sense. If the super-wealthy avoid paying themselves income, they avoid paying income tax, so a top tax rate wont contain them at all.
As I’ve been saying ad nauseam, the UBI has the effect of a progressive tax already.
Ideally yes, we should be replacing income tax (and GST) with a Financial Transactions Tax. But that’s a really dramatic change… I believe we should get the UBI in place to help those most in need first.
First, a UBI is about a policy around alleviating poverty from the poorest and so by add a flat tax to the debate makes it about rich prick interests. Second, a flat tax would cap the amount of tax at 40% for everyone, this historical is at best arbitrary and at worse counter to the very high progressive taxes that have in the past be laid on the richest (often I might add when government was building the empire that now underpins so much of our wealth). So get off you neo-liberalist I know the answer its a flat tax, and actually discuss something other than a capped 40% income tax for the richest pigging-backing on… what was it… …something about poverty and poor people.
I don’t understand what you mean by “capped”.
I don’t understand what your point is about “rich prick interests” either.
It’s not about the rich… Leave pandering to the rich to National, who with any luck will be booted out of Government next year for doing so.
It IS about the UBI and its affordability.
Giving everyone $220-300 ish (could be debated endlessly how much exactly) after tax UBI then taxing all income earned at somewhere between 30%-40% means that everybody earning $50k-60k will be better off. And the less you earn, the more better off you will be than under the current regime. This is progressive taxation. It also makes the UBI affordable. It also removes a few tax loopholes.
Ultimately, I agree with replacing GST and Income Tax with a Financial Transactions Tax (FTT) would be better in the long run. Removing even more loopholes. It seems to me that this will be harder to acheive than starting with the UBI, which will have the most positive impact on poverty.
Historically incomes taxs have been much higher than 40%, the policy of a flat tax caps the income tax at 40%.
Wealth is very useful in making more wealth, this is why we have a debate about progressive taxation, but you would not understand what the debate is about because you want to make a debate about poverty into about taxes on the rich.
Answer the question, a UBI does not mean a flat tax. In fact a UBI isn’t affordable with a flat tax since wealth would accumulate once we took away progressive taxes, why do you think the wealth gap is growing, its because we done away with taxes on the richest.
A flat tax with a UBI would mean either not being effective or the UBI having to be raised and raised until a progressive tax is introduced.
“wealth would accumulate once we took away progressive taxes” – no it wouldn’t, not any faster than it is now. UBI (if it’s enough) in combination Income tax of higher than 33% is MORE progressive than our current tax system, where the top tax rate is currently 33%.
So by your definition, income tax is currently “capped” at 33%.
You’re still not making any sense.
no deductions isn’t the same as “making it so that people can’t skip paying”. There are a loooooooooot of loopholes. income tax brackets is just one of them.
Just out of interest, Democrats for Social Credit started a discussion about UBI on LinkedIn recently – which immediately leads onto monetary reform: going as far as “remove all taxation and enable the reserve bank to create money as interest free loans”. Pretty radical, but not as much as you’d think… Private banks already create money – but add interest on top of that, which they keep as (MASSIVE, MASSIVE) profit. The discussion is here: