Radical economic suggestion - thoughts?
Discussion
Hello!
First time poster in the NP&E forum!
[Too Long; Didn't Read version: I suggest UBI of £12k per year for every adult over age of 18, would cost considerable amount of money but can pay for this by getting rid of a lot of welfare spending and bureaucracy as £12k per year ought to be enough for any adult to get shelter and food - thoughts and debate welcome!]
Now for the long version:
I don't profess to be an expert on the economy, but I have been wondering about what the future has in store for us.
As demonstrated by the pandemic - when people lose work, they lose income, and can't spend money to keep the economy going, which means businesses can't make enough money to maintain profits, so they have to lay off more staff, and the circle keeps going. This is a bit of a lengthy post, but I would like to hear from people with more knowledge on the economy than I do on the practicalities of my proposal below.
I know every working adult is allowed a certain sum out of wages, tax free. £12,500 according to Google.
Why not implement an UBI scheme whereupon every adult over the age of 18 gets paid £1,000 a month, every month, until they expire. (Just to keep the maths simple, obviously this sum would go up with rate of inflation etc)
This would be £12k per year for every adult over the age of 18, without conditions. This would need the government to spend £12k * number of 18+ adults in the country (~ 52.5 million) = £630 billion. Bear in mind this is probably a bit bigger than the amount of tax lost to 0% tax up to £12.5k of earnings.
Now, to basically pay this back, we could have a taxation system whereupon any earnings over say, £5k or some nominal sum implemented to avoid unnecessary bureaucracy are taxed at a flat rate such that when you're working and earning the median weekly earnings ( ~£585 a week, ~£30k per year) you're paying back £12k in tax, so that your overall income (UBI+work) matches what you're earning from work. This would mean a flat rate of (12k/{30k-5k})*100) = 48%, which seems high.
However, we would be able to reduce that income tax % quite a considerable amount, because we will be saving a lot of money in other state departments. For example, we would be able to do away with unemployment benefits, and pretty much get rid of all the bureaucracy costs associated with that.
We'd be able to do away with state pension (and do away with an retirement age too, so people chose to give up work whenever they like, as £12k per year is actually more than current state pension). We'd be able to do away with a lot of housing support and council tax relief, and the costs involved with that. We would be able to do away with a lot of welfare support, as that guaranteed lifetime "Essentials" payment would be enough for anybody to find a house to rent and eat. In fact, this would probably stimulate the number of people going to university, and we'd be able to do away with the student loans and temper the student debt crisis, as all university students will get £1,000 a month and if they want more money for a nicer student house, they can get a part time job on the side.
This would be an absolute boon for businesses too, as there wouldn't be pressure to 'keep people employed' even when the business is struggling to make ends meet. We can get rid of all the 'help to work' and 'help to buy' schemes, as the government could argue that they are meeting their base obligations to the public of ensuring everybody has a home and food by providing them with £12k per year, which is frankly, more than enough to rent a basic 1 bedroom flat and cover bills and food. Perhaps not in Central London, but then if you want to live in Central London, you can get a job and save up money.
This would have quite the positive impact on the economy, the British Public would have enormous spending power as a result, which would keep the economy pretty healthy regardless of any crisis? I haven't mentioned the impacts on the NHS, as with £12k per year a lot of adults would be able to buy pretty healthy food and wouldn't have any mental health conditions caused by being in poverty, which means NHS wouldn't need as much money spending on it.
That was rather long winded - congratulations if you got to the end!
First time poster in the NP&E forum!
[Too Long; Didn't Read version: I suggest UBI of £12k per year for every adult over age of 18, would cost considerable amount of money but can pay for this by getting rid of a lot of welfare spending and bureaucracy as £12k per year ought to be enough for any adult to get shelter and food - thoughts and debate welcome!]
Now for the long version:
I don't profess to be an expert on the economy, but I have been wondering about what the future has in store for us.
As demonstrated by the pandemic - when people lose work, they lose income, and can't spend money to keep the economy going, which means businesses can't make enough money to maintain profits, so they have to lay off more staff, and the circle keeps going. This is a bit of a lengthy post, but I would like to hear from people with more knowledge on the economy than I do on the practicalities of my proposal below.
I know every working adult is allowed a certain sum out of wages, tax free. £12,500 according to Google.
Why not implement an UBI scheme whereupon every adult over the age of 18 gets paid £1,000 a month, every month, until they expire. (Just to keep the maths simple, obviously this sum would go up with rate of inflation etc)
This would be £12k per year for every adult over the age of 18, without conditions. This would need the government to spend £12k * number of 18+ adults in the country (~ 52.5 million) = £630 billion. Bear in mind this is probably a bit bigger than the amount of tax lost to 0% tax up to £12.5k of earnings.
Now, to basically pay this back, we could have a taxation system whereupon any earnings over say, £5k or some nominal sum implemented to avoid unnecessary bureaucracy are taxed at a flat rate such that when you're working and earning the median weekly earnings ( ~£585 a week, ~£30k per year) you're paying back £12k in tax, so that your overall income (UBI+work) matches what you're earning from work. This would mean a flat rate of (12k/{30k-5k})*100) = 48%, which seems high.
However, we would be able to reduce that income tax % quite a considerable amount, because we will be saving a lot of money in other state departments. For example, we would be able to do away with unemployment benefits, and pretty much get rid of all the bureaucracy costs associated with that.
We'd be able to do away with state pension (and do away with an retirement age too, so people chose to give up work whenever they like, as £12k per year is actually more than current state pension). We'd be able to do away with a lot of housing support and council tax relief, and the costs involved with that. We would be able to do away with a lot of welfare support, as that guaranteed lifetime "Essentials" payment would be enough for anybody to find a house to rent and eat. In fact, this would probably stimulate the number of people going to university, and we'd be able to do away with the student loans and temper the student debt crisis, as all university students will get £1,000 a month and if they want more money for a nicer student house, they can get a part time job on the side.
This would be an absolute boon for businesses too, as there wouldn't be pressure to 'keep people employed' even when the business is struggling to make ends meet. We can get rid of all the 'help to work' and 'help to buy' schemes, as the government could argue that they are meeting their base obligations to the public of ensuring everybody has a home and food by providing them with £12k per year, which is frankly, more than enough to rent a basic 1 bedroom flat and cover bills and food. Perhaps not in Central London, but then if you want to live in Central London, you can get a job and save up money.
This would have quite the positive impact on the economy, the British Public would have enormous spending power as a result, which would keep the economy pretty healthy regardless of any crisis? I haven't mentioned the impacts on the NHS, as with £12k per year a lot of adults would be able to buy pretty healthy food and wouldn't have any mental health conditions caused by being in poverty, which means NHS wouldn't need as much money spending on it.
That was rather long winded - congratulations if you got to the end!
Edited by TheInsanity1234 on Thursday 23 July 19:16
Ive no idea if the numbers add up, but ive been saying for a while, i think, ultimately the end game is UBI. Eventually the governments hand will be forced, This one or the next one.
The economy simply isnt going to recover to where it was. Whatever the motivations, they are intent on stringing out the current crises for as long as possible. With the economy being the fall guy.
Once the mass unemployment starts, followed by house repossesions, evictions etc, they will run out of options. Will be a few years though.
The economy simply isnt going to recover to where it was. Whatever the motivations, they are intent on stringing out the current crises for as long as possible. With the economy being the fall guy.
Once the mass unemployment starts, followed by house repossesions, evictions etc, they will run out of options. Will be a few years though.
When you do away with things as you suggest you also create unemployment. Its not that simple. For me make minimum wage tax free, don't taper off at 100k do away with NI add it all on to Income tax.
Simplified tax is easier to administrator. But with all things some would win some would loose.
Simplified tax is easier to administrator. But with all things some would win some would loose.
As I said earlier on the cure worse than the disease thread...
How about offering a form of optional Universal Income for those willing to take it up as a way of freeing up jobs for those who need them?
In my case I can get by quite comfortably on around £130 per week (being mortgage and child free) which is only one third of my current take home pay.
If they offered me a guaranteed £130 per week for the rest of my life (adjusted for inflation) to retire right now at 46 years old I'd snap their hands off, freeing up my job for someone who needs the work and money more than I do... and if that someone has kids and rent/mortgage to pay they'll be costing the govt a hell of a lot more than £130 per week whilst they're out of work.
How about offering a form of optional Universal Income for those willing to take it up as a way of freeing up jobs for those who need them?
In my case I can get by quite comfortably on around £130 per week (being mortgage and child free) which is only one third of my current take home pay.
If they offered me a guaranteed £130 per week for the rest of my life (adjusted for inflation) to retire right now at 46 years old I'd snap their hands off, freeing up my job for someone who needs the work and money more than I do... and if that someone has kids and rent/mortgage to pay they'll be costing the govt a hell of a lot more than £130 per week whilst they're out of work.
Gecko1978 said:
When you do away with things as you suggest you also create unemployment. Its not that simple. For me make minimum wage tax free, don't taper off at 100k do away with NI add it all on to Income tax.
Simplified tax is easier to administrator. But with all things some would win some would loose.
But there will be no such thing as unemployment. Everyone is paid an income. Work if you want more. Dont if you are happy on the £1k a month. Thats the whole idea.Simplified tax is easier to administrator. But with all things some would win some would loose.
Sheets Tabuer said:
If everyone got 1k a month wouldn't the price of everything just go up?
Hello, I'm your landlord. Your rent of £635pcm is now £1635pcm. This IS what happened with NMW.
Without controls it will just get sucked into housing.
There is no fking way that the proles will be allowed to have a nice life.
YOU MUST GRIND FOR YOUR MASTERS!!!!!
Perhaps implementing a punitive tax on rental income, thereby discouraging landlords and businesses from purchasing property for letting thus making house buying much easier for everybody? Banks could happily lend money to people for houses if they knew that the customer would always be able to afford their £500 a month mortgage payment courtesy of the government's UBI?
I've seen this proposed before and I believe they tried it somewhere (Denmark was it?).
Firstly, there has to be some criteria as to who gets it or how do you avoid being overwhelmed by immigrants who want to take advantage.
Secondly, you are dis-incentivising work. That problem already exists with the Benefits system in that there's no point in working unless there is a significant benefit over not working. But you'd be multiplying that over the whole population. So you potentially end up with a less efficient economy because it has to carry so much more deadweight. So how do you keep competitive on the world stage?
Thirdly is the question of how it gets paid for. If you're giving everyone a big chunk of money that must mean that you have a much smaller group of people who have to get taxed much more. The problem with that is that it has been proven many times before that that doesn't work. Indeed, generally the upper tax rate only gets raised for political reasons and not economic ones because it has long been clear there is a point above which raising the rate reduces the tax take.
Probably more to say but that's my three points for now.
Firstly, there has to be some criteria as to who gets it or how do you avoid being overwhelmed by immigrants who want to take advantage.
Secondly, you are dis-incentivising work. That problem already exists with the Benefits system in that there's no point in working unless there is a significant benefit over not working. But you'd be multiplying that over the whole population. So you potentially end up with a less efficient economy because it has to carry so much more deadweight. So how do you keep competitive on the world stage?
Thirdly is the question of how it gets paid for. If you're giving everyone a big chunk of money that must mean that you have a much smaller group of people who have to get taxed much more. The problem with that is that it has been proven many times before that that doesn't work. Indeed, generally the upper tax rate only gets raised for political reasons and not economic ones because it has long been clear there is a point above which raising the rate reduces the tax take.
Probably more to say but that's my three points for now.
jtremlett said:
I've seen this proposed before and I believe they tried it somewhere (Denmark was it?).
Firstly, there has to be some criteria as to who gets it or how do you avoid being overwhelmed by immigrants who want to take advantage.
Secondly, you are dis-incentivising work. That problem already exists with the Benefits system in that there's no point in working unless there is a significant benefit over not working. But you'd be multiplying that over the whole population. So you potentially end up with a less efficient economy because it has to carry so much more deadweight. So how do you keep competitive on the world stage?
Thirdly is the question of how it gets paid for. If you're giving everyone a big chunk of money that must mean that you have a much smaller group of people who have to get taxed much more. The problem with that is that it has been proven many times before that that doesn't work. Indeed, generally the upper tax rate only gets raised for political reasons and not economic ones because it has long been clear there is a point above which raising the rate reduces the tax take.
Probably more to say but that's my three points for now.
1. The idea is EVERYONE gets it. If they dont, its not UBI, its benefits. Immigrants,Dont let them in.Firstly, there has to be some criteria as to who gets it or how do you avoid being overwhelmed by immigrants who want to take advantage.
Secondly, you are dis-incentivising work. That problem already exists with the Benefits system in that there's no point in working unless there is a significant benefit over not working. But you'd be multiplying that over the whole population. So you potentially end up with a less efficient economy because it has to carry so much more deadweight. So how do you keep competitive on the world stage?
Thirdly is the question of how it gets paid for. If you're giving everyone a big chunk of money that must mean that you have a much smaller group of people who have to get taxed much more. The problem with that is that it has been proven many times before that that doesn't work. Indeed, generally the upper tax rate only gets raised for political reasons and not economic ones because it has long been clear there is a point above which raising the rate reduces the tax take.
Probably more to say but that's my three points for now.
2, Not really. You are giving everyone enough just to get by. No more. Want to have some luxury in your life? Best get out and earn it. So ANY work you do has benefit as you have extra money. Unlike the benefits system which disincentivses work. Which is abolished by UBI. Of course, if you set the rate to high, then it wont work.
3. No idea!! Plenty of suggestions out in socialist world. Some of them might work?
Finland trialled it recently, in a manner of sorts.
https://www.theguardian.com/society/2020/may/07/fi...
https://www.theguardian.com/society/2020/may/07/fi...
jtremlett said:
I've seen this proposed before and I believe they tried it somewhere (Denmark was it?).
Firstly, there has to be some criteria as to who gets it or how do you avoid being overwhelmed by immigrants who want to take advantage.
The criteria could simply be: If you have the right to work/live in the UK, you're eligible for the government UBI. So unrecorded immigrants won't be able to get it, and people who have a legal right to live here do.
Secondly, you are dis-incentivising work. That problem already exists with the Benefits system in that there's no point in working unless there is a significant benefit over not working. But you'd be multiplying that over the whole population. So you potentially end up with a less efficient economy because it has to carry so much more deadweight. So how do you keep competitive on the world stage?
trust me, you get paid a pittance on the benefits system. Unless you are severely incapable of work, you will NOT get enough money from the benefits system to live on. Currently, the incentive to work for most people is "I need to survive".
My proposal is to shift that incentive to work to "I want nice things and I'm going to work hard to get it", those who are content getting a bare minimum to live on and spend their bare minimum on food and drink and whatnot are still paying back part of their £12k on VAT and taxes on goods and services, so the total cost per individual probably would be lower, thus higher earners won't have to pay ludicrous amounts of tax on their income that they've worked for.
Thirdly is the question of how it gets paid for. If you're giving everyone a big chunk of money that must mean that you have a much smaller group of people who have to get taxed much more. The problem with that is that it has been proven many times before that that doesn't work. Indeed, generally the upper tax rate only gets raised for political reasons and not economic ones because it has long been clear there is a point above which raising the rate reduces the tax take.
Hence my proposal that we have a simple flat income tax rate on all earnings from work. Having a small personal tax allowance would also allow quite a lot of people to give up their regular day job in some menial job that could be done much more cheaply by a robot. It'd allow people to start home based businesses etc to make some extra money on the side, but it wouldn't stop people from wanting to work hard and make big money, as they know they will always pay say, 40% of whatever they earn in tax, even if it's £20k taxable pay or £1.56million taxable pay.
I'm genuinely fascinated by how it would all work, and I know nothing about the economy as I say!Firstly, there has to be some criteria as to who gets it or how do you avoid being overwhelmed by immigrants who want to take advantage.
The criteria could simply be: If you have the right to work/live in the UK, you're eligible for the government UBI. So unrecorded immigrants won't be able to get it, and people who have a legal right to live here do.
Secondly, you are dis-incentivising work. That problem already exists with the Benefits system in that there's no point in working unless there is a significant benefit over not working. But you'd be multiplying that over the whole population. So you potentially end up with a less efficient economy because it has to carry so much more deadweight. So how do you keep competitive on the world stage?
trust me, you get paid a pittance on the benefits system. Unless you are severely incapable of work, you will NOT get enough money from the benefits system to live on. Currently, the incentive to work for most people is "I need to survive".
My proposal is to shift that incentive to work to "I want nice things and I'm going to work hard to get it", those who are content getting a bare minimum to live on and spend their bare minimum on food and drink and whatnot are still paying back part of their £12k on VAT and taxes on goods and services, so the total cost per individual probably would be lower, thus higher earners won't have to pay ludicrous amounts of tax on their income that they've worked for.
Thirdly is the question of how it gets paid for. If you're giving everyone a big chunk of money that must mean that you have a much smaller group of people who have to get taxed much more. The problem with that is that it has been proven many times before that that doesn't work. Indeed, generally the upper tax rate only gets raised for political reasons and not economic ones because it has long been clear there is a point above which raising the rate reduces the tax take.
Hence my proposal that we have a simple flat income tax rate on all earnings from work. Having a small personal tax allowance would also allow quite a lot of people to give up their regular day job in some menial job that could be done much more cheaply by a robot. It'd allow people to start home based businesses etc to make some extra money on the side, but it wouldn't stop people from wanting to work hard and make big money, as they know they will always pay say, 40% of whatever they earn in tax, even if it's £20k taxable pay or £1.56million taxable pay.
Johnnytheboy said:
If you paid me twelve grand I'd just stop going to work.
I'm 47 with a small mortgage.
That would be like a fairly decent pension i could manage on.
Thus freeing up your position for someone younger who wants more money than £12k a year to pay off their mortgage earlier and reach the position of being able to give up work at 47 and manage just fine on £12k per year!I'm 47 with a small mortgage.
That would be like a fairly decent pension i could manage on.
It's an interesting concept. It would benefit us hugely as two thirds of my partners income goes on childcare. Having the extra money would provide us with more time to spend with our son.
We would probably still both work so we could afford the holidays and essentials he would need, but we could provide for him a lot better than we are currently doing.
My big concern would be for the initial rampant inflation, the gold mine that drug dealers currently sit on would grown immensely though!
We would probably still both work so we could afford the holidays and essentials he would need, but we could provide for him a lot better than we are currently doing.
My big concern would be for the initial rampant inflation, the gold mine that drug dealers currently sit on would grown immensely though!
coolg said:
I don’t know if possible but can you receive more than this amount in benefits ?
The government gives me £12500 but the tax me more to pay for it ??
Nope, as I said, most people who are severely incapable of work tend to get a combined total of maybe £900-£1,000 per month to live on, but this is for extremely incapacitated people.The government gives me £12500 but the tax me more to pay for it ??
Edited by coolg on Thursday 23 July 20:34
There are plenty of disabled people like myself who are eligible for disability benefits, but the amount we get isn't enough to live on as we are deemed capable of work, even though my ability to work varies day-to-day and I struggle holding down regular 9-5 hours.
There are loads of news about people on UC struggling to afford to live, they get considerably LESS than £1k a month and they're expected to be able to live on it and feed a family too!
It wouldn't be a ridiculous hike in taxation, just a fair amount so that anybody who is working and earning a comfortable £60k (for example) is paying enough tax to both repay their £12k UBI, and subside someone else, plus some public services!
TheInsanity1234 said:
Thus freeing up your position for someone younger who wants more money than £12k a year to pay off their mortgage earlier and reach the position of being able to give up work at 47 and manage just fine on £12k per year!
technology Will start to take over some jobs and there is the assumption that for everybody that retireS there is somebody wanting or able to take their job ?Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff