Wednesday, 23 July 2014

Reply to 'negative income tax and basic income are pretty much the same thing'

Original blog here:-

http://www.samuelbowman.com/uncategorized/the-negative-income-tax-and-basic-income-are-pretty-much-the-same-thing/

I commented (as follows), but its been awaiting moderation for a few days, so thought I'd blog my response here before I forget about it!

My reply:

Indeed they are the same thing.

And with flat tax on all income there is no need to phase out ‘basic income’. Pay it to everyone (who wants to claim it) for the unemployed it replaces benefits, for the employed it replaces their ‘tax free allowance’.

Better still – if all wages are taxed at the flat tax rate, it can be collected directly from the company as a %age of their wage bill – no need for individual accounting.

Align the flat tax rate with the corporate tax rate and companies get a single tax bill – a single straight %age of wages bill+profits.

Also most ‘public services’ can be pretty much eradicated, as every individual will have ‘basic income’ to fund the services they value (individualy or in groups if they so choose).

Basic income needs to be set at least at subsistance level (we don’t let people starve). Plus whatever is ‘freed up’ from abolishing public services (which would formerly have been available to them anyway).

Introducing the flat tax is the biggest challenge, as current salaries are set assuming current tax rates – if the tax rates are unexpectedly changed, salaries should be reset to take this into account – so no windfalls/hardship from the switch itself.

No comments:

Post a Comment