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