Study claims UK can afford a Universal Basic Income
A new study finds the U.K. could afford a Universal Basic Income, or Citizen’s Income.
What is a Universal Basic Income
The idea is that the government replaces most benefits with a set amount paid to all citizens. Therefore, supporters claim, we would reduce poverty and some of the complexity of the tax and benefit system. We have previously covered the idea here.
What could it cost?
A recent study by Karl Widerquist and George Arndt has calculated the net cost as £67 billion.
What were the calculations based on?
The report set a potential basic income payment at £7,706 per adult and £3,853 per child. They decided this level of payment would eradicate absolute poverty from the U.K. The net cost was calculated by removing amounts people pay to themselves (through taxation), and savings made to the existing tax and benefits system. Therefore they concluded this would make the idea affordable.
Wouldn’t this put up taxes?
Yes. As a result, Basic Income could be affordable for the country’s finances. They recommend that tax hikes should be covered by the top 30% of U.K. households. They outline the wealth inequality in the country and suggest that if people want to eradicate poverty it can easily be funded.
What does the report say?
“The most important aspect of the financing issue is that 3.4% of UK GDP can be raised out of taxes on the wealthiest 30% of UK households.
The UK is a highly unequal country (relative to most industrial-sized countries although not to the US), and inequality has been rising in the UK for decades.
The money is available, if the UK chooses to use it to eliminate poverty and create a much more equal society.”
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