Jeremy Heighway scrutinises a recent report: Piloting Basic Income as Common Dividends

Jeremy Heighway shares reflections on Piloting Basic Income as Common Dividends: A report presented to the Shadow Chancellor of the Exchequer.




p10… usually some ‘revenue neutral’ constraint is imposed, meaning that paying for it is based on rolling back some means-tested benefits and subsidies and on raising income tax rates. 

J: In all discussions I have so far seen, revenue-neutrality has been an issue of the government not keeping additional revenue from any measures, but instead decreasing other revenue generation to the same tune. One criticism I have had for decades is that higher eco-taxation, for example, should not be made revenue-neutral by reducing NI contributions, as not everybody pays these, and such a move would have very uneven effects. It is precisely the basic income concept which can return increased revenues to all evenly. Rolling back some means-tested benefits is thus not really part of the term revenue-neutral; it is closer to being an issue of partial cost-neutrality/mitigation for the government.

p14. To put that into perspective, a lone parent employed full-time on the minimum wage would be short of that acceptable minimum by £70 a week. So, a basic income of that amount would enable a lone parent to move out of poverty, and even one of £50 would go a long way to that end.

J: This would be dependent on not having higher costs or lower benefits in the new system. Also, most supporters of UBI wish it to be a lot more than moving already fully employed people out of poverty.

p22. But experience in Canada and Switzerland shows that those problems [unpopular + regressive] can be overcome if the government makes it clear that the revenue gained from the carbon tax, or much of it, is paid out as something like dividends to everybody.

J: The Green Party in Germany has recently come out in favour of having at least a low-level basic income system in place to redistribute revenues from higher carbon taxes. I have been in favour of this since 1993. I am glad to see that this is finally gaining ground around the world. Chapter seven, although called simply “Extinction”, powerfully brings various points together!

He ends: “The rest of the report continues to be very good. My biggest take-away is that eco-taxation (Ed: a tax levied on activities which are considered to be harmful to the environment, intended to promote environmentally friendly activities via economic incentives) is finally being considered together with a UBI, something which probably couldn’t be piloted properly anywhere representative of urban or rural areas anyway. We need to get this talked about and on the way to direct implementation imho”.






Posted on July 30, 2019, in Basic income, Jeremy Heighway and tagged , , . Bookmark the permalink. Leave a comment.

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