Frequently Asked Questions
- What is Basic Income?
- Does everyone receive it?
- Does it matter if you are rich or poor?
- How would Basic Income be paid for?
- Would the payments be taxable?
- Do any countries already have a Basic Income?
- Why should we change the present welfare benefit and taxation system?
- Why has Basic Income not been implemented?
The UBINZ web page described a Universal Basic Income, or Basic Income Guarantee, ‘as an unconditional cash payment to individuals sufficient to meet basic needs’.
A Basic Income is an automatic, unconditional and non-withdrawable income for every citizen.
The only condition for entitlement is that a person must be a citizen or have legal residency rights. Thus a Basic Income is an income paid by the State to every man, woman and child as a right of citizenship.
Wealthy people and poor people are equally entitled. There are no differences on account of income or wealth, work status, gender or marital status. However there will need to be ‘top up’ supplementary payments made to assist financially disadvantaged people such as people who have disabilities and the elderly. Conversely, children will receive proportionately less according to their age.
It would be paid for from income taxes on all other income, and tax allowances will be reduced or curtailed. Current targeted, means-tested and contributory benefits will cease, to be replaced by the Basic Income. The present income tax allowances and deductions benefit higher income earners proportionately more than the less well off. By removing the tax allowances, higher income earners will contribute a little more income tax than under our present system.
No, the payments would be free of tax for all recipients. All other income would normally be taxable.
Many countries have a partial Basic Income. For example in Australia we have the Parenting Allowance, formerly Child Endowment.
Brazil passed a law phasing in a basic income, the first nation to do so, in 2005.
The State of Alaska has a partial Basic Income to distribute its Mineral Resource Investment Income to its people.
The Government of the Republic of Ireland has recently published a Green Paper (PDF file) with a view to implementing a Basic Income.
The existing system is extremely complex and inefficient and no longer does the job it was designed to do after World War II. Despite increased social welfare spending, large numbers of people are falling into poverty traps, unemployment remains high and many jobs have become casual or part time.
A Basic Income support scheme, or Universal Income Guarantee has the potential to overcome the failings of the present Australian welfare state. It would be simple in application, increase economic efficiency, help prevent poverty, reduce unemployment and unite our society.
Throughout the many articles, books and Basic Income websites represented at this site runs a thread of argument about the notion that people resent others from ‘getting something for nothing. It is a form of downward envy.
Philippe Van Parijs (2000) put the issue succinctly in Basic Income and the Two Dilemmas of the Welfare State: ‘the indignation of the jobless who are morally and legally expected to keep looking for what many know they will never find, is matched by the outrage of those who subsidize with their social security contributions the idleness of people who are overtly transgressing the rules of the game
The idea of a Basic Income is not new. Van Trier (1995) noted that in 1920 Dennis Milner published one of the early British books on the idea of a Basic Income, which Milner called Minimum Income, and it was largely ignored. Milner (1920) called for a minimum income to apply to all citizens, man, woman and child, without conditions or deductions (p.19) and his arguments, which he called ‘a business proposition’ are remarkably similar to those used today, eighty odd years later (Tomlinson, 2000). Milner noted in his preface that he had chosen intentionally to eliminate all speculations on justice and ethics’ so as to leave his proposal uncluttered and simple (Milner, 1920, p.6). Thus right from the conception of a Basic Income, there has been some lack of discussion of the ethical issues.
Allan McDonald writes:
Universal income support in various guises has been under consideration for a number of years. It was suggested by the Henry George League in the 1920's, and by Cole and Mead in Oxford in the 1930's. The concept was given a push along by Milton Friedman, with his principle of Negative Income Tax, and Lady Rhys-Williams, with her proposal for a Social Dividend, in the 1940's. In Australia the most notable proposal was the Henderson proposal for a Guaranteed Minimum Income (GMI). This was a major recommendation from the Royal Commission into Poverty, established in 1972 under the chairmanship of Professor Ronald Henderson.
The history of basic income has its own place on the BIGA site under A short history of Basic Income in Australia and New Zealand.