08 August 2005

The Citizen's Income (CI)

Tackling Poverty in Britain (part II).

Pay everyone the dole, yes you heard me right. It is not as crazy as it first sounds, in fact it is our present system that is crazy!

What is good about the Citizen's Income (CI) is that not only is it effective at tackling poverty, it is efficient, because it cuts bureaucracy.

The government spends around £500 billion every year, around £170 billion of this is spent on social protection and associated bureaucracy. Why not turn this into a universal payment, (like child benefit), but to everyone. This works out nearly £3000 for every man, woman and child in the country.

Scrap tax allowances and the NI ceiling and have one universal tax rate of 40%, ((50% of £4745)x30m taxpayers+£35bn extra NI revenue+(30% of £31400)x22m) and we raise another £230 billion, this puts our CI up to £6800 each per annum.

If we remember 20% of the population are under 16, whom we could pay a smaller amount to, of say £3400. This would mean each adult would get over £7500 p.a. (about £150 p.w.). This figure would be a reasonable figure to cover basic housing, utility and food costs.

The tax hike sounds a lot but remember every taxpayer receives the CI payment of £7500 net on top of their earnings, which means workers below median average earnings would actually be better off.

There would be no means testing, which is genius because it would mean an end to the 'poverty trap' that keeps people unproductive and on benefit at present. Everyone would be free to work, keeping their earnings on top of their CI.

All benefits and tax allowances, pensions etc, would be scrapped and all the civil servants that administer them would go as well.

Wouldn't everybody just stay at home, I hear you ask?

People work for a variety of reasons, not just for their earnings. A CI would certainly mean that work conditions would have to improve. A CI would also mean there would be no need for a minimum wage, since people would no longer be totally dependent on a employer for income and could move about freely to the job they liked the best. In fact a lot of employer regulation could go because employees would be in a position to demand better working conditions. Employers would also have to pay a decent wage to attract people to the hardest jobs.

Because there is no penalty for working, people are in fact more likely to work than at present.

For more information and some excellent articles visit the Citizen's Income Trust.

Here is a model of a revenue neutral Citizen's Income.

The above model emphasizes how untrue it is to claim that massive tax rises would be needed to make a difference to the poor!

2 comments:

  1. Fascinating to see the Citizens' Income promoted on a blog called LabourPartySupporter. I recently read a book called Citizens' Income by Clive Lord - one of the founder members of the Green Party. In fact the Greens are the only political party to have CI as one of their core policies.
    Are you supporting the right camp?

    ReplyDelete
  2. I agree with a lot the Greens have to say, but if we want electoral reform or anything else under this system we HAVE to be in the Labour party - the only left of centre party to be in a position to implement such policies.

    The Labour party are (and probably always will be) the main party of the left.

    ReplyDelete