Category Archives: Basic Income Guarantee

Politics interests me a lot more than political philosophy. I appreciate pragmatism decide what the goal is and work towards it.

So I tend to pay attention to works coming from political think tanks only if I find them disturbing.

I once saw a publication from respected conservative scholars advocating that the federal government sell public lands, even national parks, use by use e.g., mining, access, lumber, recreation. I was relieved to find that the conservatives I know were stunned to hear it.

Similarly, many Idaho Libertarians have no idea their think tanks support abolishing public schools and roads. They think their party stands for individual rights, not destruction of infrastructure.

Still, I was surprised when a reader wrote that a fellow of the American Enterprise Institute one of the older, more prestigious conservative think tanks supports Universal Basic Income.

Under Universal Basic Income the U.S. government would guarantee everyone a basic income and mail out billions in checks every month.

AEI fellow Charles Murray published his second book about UBI in 2016 In Our Hands: A Plan to Replace the Welfare State. In it Murray claims the government could save money by ending all current social welfare payments think food stamps, Medicaid, Social

Security, Earned Income Credit, etc.and mailing $10,000 a year in monthly installments to every person over 21. An additional $3,000 would pay for health insurance covering catastrophes. Payments would be reduced for those making over $30,000 a year with persons making over $60,000 still receiving $5,000 a year.

To those who say that no one can live on $10,000 a year, Murray argues such a stipend would improve lives significantly for those who can only find minimum-wage or part-time jobs. And his program would encourage people to live together and pool their money. (Doesnt the current system do that?)

Murray claims that we must make the change because current welfare programs discourage people from entering the workforce, advances in Artificial Intelligence will soon wipe out many good-paying jobs, current programs face solvency problems, and there is too much bureaucracy.

Murray appears to be a caring person whos seeking a way to help.

Still, the need for his plan doesnt hold up.

For the past 25 years, welfare programs (think EIC) have encouraged and rewarded recipients who go to work. The percent participating in the workforce changes with the availability of jobs, not welfare.

Past gains in new technology has always led to more jobs, not less. We should be working to see this continues rather than mailing everyone money.

A growing economy and some small tweaks can solve the solvency problems. Social Securitys overhead is only 0.5 percent; and costs of Medicare and Medicaid have grown slower than healthcare in general.

More important there are major inequities in Murrays UBI.

Every person over 21 there is no support, not even additional insurance, for children.

Health insurance covering catastrophes with coverage limited, people tend to forego continuing care; healthcare costs are higher and outcomes worse.

$10,000 a year social security payments now average $15,444 annually. Senior citizensmany not capable of working would take a 35% cut.

I believe even those who support Murrays version of Universal Basic Income dont see Congress ever accepting it.

Charles Murray will be in Boise at the annual Idaho Freedom Foundation banquet Aug. 26.

Judy Ferro is a former state committeewoman for Canyon County Democrats. Email her at idadem@yahoo.com.

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Universal basic income proponent to speak in Boise - Idaho Press-Tribune

Here at Big Think we like to talk about the basic income guarantee. While the basic income is an interesting idea, objections to it abound. Also, it isnt the only idea for ending poverty making the rounds. While the basic income gets a lot of press, there's another idea: the Job Guarantee.

What is it?

The Job Guarantee is a policy proposal that would have the state function as an employer of last resort; always having public works projects in action to assure that any person looking for work is going to be able to find a job. That job might not be glamorous or conveniently located, but it will exist.

Such a plan would not end unemployment outright, but would rather assure that the rate is always near a low target. While most proposals set the target unemployment rate near three percent, that rate has been as high as six percent in others. It is based not only on economic questions, but also on the pragmatic question of how many people would take the work offered.

Is this a new idea?

No, the idea was formalized by Bill Mitchel and Joan Muysken decades ago. However, the principle goes back to the New Deal in the United States when agencies like the Civilian Conservation Corps and WPA offered work to the unemployed when the market failed to provide it. In the United Kingdom it goes back to the work of William Beveridge, notably the book Total Employment in a Free Society, which reached the conclusion that the state could assure total employment by a variety of means consistent with a liberal, capitalist, society.

Has it been tried?

In the United States, the bill known as Full Employment and Balanced Growth Act states the Federal Government can institute this policy- but no action has ever been taken along these linesdespite unemployment often being above the bills suggested level of three percent.

Currently, India has the National Rural Employment Guarantee Act, which aims to provide work in impoverished areas. While criticism the projects has been made, independent studies show it does have a positive effect on the people and areas it serves. It is, however, less comprehensive than many theorists would have liked. Though it does employ many people and provide needed infrastructure work in isolated areas.

What are the upsides?

The benefits of attempts at job guarantees have included reduced poverty and the ills associated with unemployment, including issues with health, family problems, drug use, and high crime rates. Supporters also argue that it can lead to stability of both prices and economic growth by assuring the unemployment rate never spikes.

Well, this sounds pretty good, what are the downsides?

There are a few, one objection of course is that such a policy calls for major government intervention in the economy; an idea opposed by many people for various reasons. The project could also cause inflation if not managed properly. The risk of politicians using assured employment to create a pool of loyal voters has also been a hurdle to the creation of new projects.

There is also a practical problem to consider. While it may be possible to assure that there are more open job positions than unemployed workers at any time, it may prove impossible for that work to be useful, attractive, and accessible. While there will be a demand for people to pave roads in Northern Alaska at some point, it will prove difficult to get people to move there to do it at a low cost. At the same time, you could employ everyone digging and filling in holes, but would have a hard time selling it to voters as being useful.

And more recently, the question of how automation would influence attempts to have productive work for everyone is also currently unsolved.

How we are going to organize the economy is always a pressing question. With the pressures of automation and globalization becoming stronger all the time, the question takes on new dimensions. Will the right to have a job be the next freedom enjoyed by people all over the world? Or will the idea end up as a trivial notion in a history of economics class?

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Is a Well-Paying Job the next Entitlement Program? - Big Think (blog)

The intent for an income guarantee is laudable. We all want to see people do well, particularly the most vulnerable. But will the results be those that are intended? To me, there is a fundamental problem with the concept. Income guarantees address the symptom of poverty, not the causes. Perhaps a fable will illustrate this point. Once upon a time, in a place not unlike our own, there was a medical clinic. It had many doctors and nurses but there always seemed to be unmet needs; people waiting, maladies untreated. The administrator of the clinic took note that there was a common denominator for all the patients they were all in pain or discomfort. So he came up with a simple, all-inclusive solution. He laid off the medical staff, provided all clients with pain relievers and sent them home. It started off not badly. Everyones most immediate need was met. For some it actually worked out well. They had relief and they progressed to better and sustained health. For most, however, not so much. They needed stitching, or medications, or therapy or other services. Whats worse, for some patients the process developed a dependence on pain relief. They never did recover. Now, back to reality, nobody would ever run a medical clinic this way. Yet is this not the approach of an income guarantee? If people are poor, give them some income. People fall into poverty for many reasons. It could be a lack of education or training, health problems, family issues, mental health challenges, low wages, poor economy, etc. While the guarantee would provide immediate relief, it wouldnt address the limiting issues. Worse, it would almost definitely create dependence. This is critical because our sense of well being often revolves around work and productivity. It is unintended by the authors, but an income guarantee would be a disincentive to work. It would serve not to enable people but to sedate them. Advocates would respond that there is no reason a guarantee couldnt be combined with support measures to better address these barriers. Perhaps, but this is where a critical question comes in where will the money come from? An income guarantee is enormously expensive. Some of the cost would have to come from new money; there is just no other way. But some of the funding would have to be taken from existing programs. Employment insurance, job creation, community development, counselling service and others would all be on the chopping block. In most cases, it would be the very services low income people most depend upon. And what of the savings projected for reduced demand on things such as health care and the criminal justice system? Even if demand did fall, what politician would be bold enough to cut something like health care? Look to the example of education. Did fewer children in the system lead to reduced spending? This is not to say that educational spending should have been reduced (it shouldnt) but it does say that the idea that a guarantee will result in savings is highly suspect. Personally, I would very much love to have a simple, all embracing cure for poverty. But I think we should be directing our energies to the more complex set of tasks around economic development, income incentives, disability benefits, childcare, social assistance and support services. A basic income guarantee would be prohibitively expensive, would result in a work disincentive and would fail to come to grips with why people fall behind. The sentiment is good but the product is in need of a rethink.

- Don Pridmore, of Charlottetown, is a retired civil servant. He worked for the Department of Health and Social Services in the 1990s.

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DON PRIDMORE: Be careful what you wish for... - The Guardian

The Guardian

EDITORIAL: Island needs dollars, not data, to cope with poverty The Guardian It may seem repetitious, but the fact remains that this Island still needs federal funding to get a basic income guarantee pilot project off the ground. So far, as we've chronicled in past issues, the Trudeau government has only been willing to offer ...

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EDITORIAL: Island needs dollars, not data, to cope with poverty - The Guardian

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Peterborough businesses are registering their concern about a proposed minimum wage hike.

As the Ontario government considers raising the minimum wage from $11.40 to $15 in 2019, some local business owners are raising red flags, and say the wage hike could lead to job cuts.

The Fair Workplaces, Better Jobs Act (Bill 148), tabled earlier this year, proposes the wage hike that has caught some businesses off guard.

READ MORE: Loblaw could offset higher costs from minimum wage hikes

At a Peterborough Chamber of Commerce round table in June, business owners said the wage hike was just too much, too soon.

Sandra Dueck is a policy analyst with the Peterborough Chamber of Commerce.

Sandra Dueck, a policy analyst with the Peterborough Chamber of Commerce said the feedback they received formed the basis of a report and recommendations which they shared with the province and the standing committee dealing with Bill 148.

We had 24 businesses represented in the room and they were all saying, This will mean fewer hours, fewer jobs and more automation, not hiring, and maybe even job cuts,' said Dueck. Its all in reaction to the speed of which this is happening. Many of the businesses said they werent opposed to the increase, its just the speed at which its happening.

The list of recommendations included the suggestion of increasing the minimum wage to $14, not $15 and phasing this in over a five-year period. They also want the province to consider providing relief for the agricultural and tourism sectors while looking at keeping the student minimum wage lower than the regular minimum wage.

Whether you agree or disagree with the increase, Marion Burton, president of the Peterborough and District Labour Council, says the minimum wage hike is one measure designed to help lift people out of poverty.

Marion Burton, a labour activist, says workers cant wait for a wage increase.

This government has been faced with a province where too many people are living in poverty and they are looking at ways of bringing people out of this, and the basic income guarantee pilot project is part of that, said Burton. Theres too much precarious work and far too much part-time work and this younger generation just doesnt have the future that my generation did.

Burton says that anytime the government has tabled changes to issues like minimum wage or other labour initiatives like a five-day work week, for example theyremet with the same reaction: trepidation and fear that businesses cant meet the demand.

But, she says, the workers cant wait for a wage increase.

If they wait and implement the minimum wage over a longer timeline, all they are doing is perpetuating poverty for too many people in this province, she said. I dont think its a stretch at all, if you look at the legislation, youll see the employers have until October 2019 to capture the $15 minimum wage increase.

The Ontario Chamber of Commerce and the Keep Ontario Working Coalition have commissioned an independent economic analysis to study the effects of the proposed Bill 148 and will publish the findings next month.

In the meantime, the Bill is due for first and second readings even without amendments when Queens Park resumes session in September.

2017Global News, a division of Corus Entertainment Inc.

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Peterborough businesses claim $15 minimum wage hike could result in job cuts - Globalnews.ca

Having a monthly, tax-free, no-strings-attached income that would cover the basics for life may sound too good to be true, but its no fantasy. The idea of universal basic income (UBI) already has been implemented in some regions, such as Canada, Europe, and even Alaska, and Facebook founder and CEO Mark Zuckerberg recently revitalized discussion about the concept.

Zuckerberg endorsed UBI during his 2017 commencement speech at Harvard University as a means of leveling the economic playing field and opening the doors of entrepreneurship to everyone.

"We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas," Zuckerberg told graduates. Now its time for our generation to define a new social contract.

What Is Universal Basic Income?

Zuckerberg, Facebook co-founder Chris Hughes, and other tech executives, including Tesla CEO, Elon Musk, have turned to this notion in response to the re-emerging concern about unemployment in the tech sector.

But the concept was originally developed hundreds of years ago as a way to lift citizens out of poverty.

Universal basic income (UBI) actually dates to the 16th century and the Renaissance, when the idea of a minimum income guarantee originated as a way to help poor people. Then in the 18th century, the idea of a basic endowment emerged to help alleviate theft, murder, and poverty in Europe.

The concept has changed through the years. When people talk about UBI today, theyre referring to an unconditional cash grant regularly distributed to all members of a community without any means test or work requirements, according to the Basic Income Earth Network. The concept means that everyone receives a set amount of money each period, no matter their circumstances.

Despite its existence for even centuries, UBI did not take the stage like other social assistance programs, such as Social Security, food stamps, and unemployment benefits, which some critics believe would be outperformed by UBI, if implemented.

Jason Murphy, assistant professor of philosophy at Elms College in Chicopee, Mass., and U.S. Basic Income Guarantee Network (USBIG) coordinating committee member, says UBI would remove the conditions placed on existing social assistance programs that limit who receives help and how. The program would better target communities that are especially vulnerable and overlooked ensuring that no one has to go hungry and everyone starts on equal footing, he adds.

Still, with UBI in place, Murphy says he thinks not only does it give everyone a chance to cover essential needs, but it also opens the door for others to invest, start businesses, and create more jobs for the economy.

Critics argue that UBI could cause inflation, cause people not to work, or be an unfair tax on the rich, but research shows this isnt likely. A study by MIT and Harvard economists found that "no systematic evidence that cash transfer programs discourage work" in poor countries and, in some cases, encourage it.

Karl Widerquist, an economist, philosopher, Basic Income Earth Network board member, and visiting associate professor at Georgetown University-Qatar, says he thinks with a decent tax policy, the program would serve as an automatic stabilizer, alleviate income inequality, and help everyone financially.

The average worker is no better off than they were in the 1970s when you adjust for inflation, Widerquist says.

Some Places Are Already Benefiting

Regions around the globe including Ontario, Canada, and Finland, and, in the U.S., North Carolina, and Alaska are putting UBI to the test.

In the late 1990s, a tribe of Cherokee Indians in North Carolina began distributing some of the profits from the tribes casino to its 8,000 members, the New York Times reported. It amounted to about $6,000 per year for each member.

A long-term study on the tribes universal income experiment was published in 2016 by Duke University epidemiologist E. Jane Costello. She found that children in communities with a basic income experienced improvement in the education system, better mental and physical health, lower stress levels and crime rates, and overall economic growth.

Finland began a similar experiment in 2017, promising to give 2,000 citizens $600 per month through 2019. And Alaska has offered a basic income to its residents since the early 1980s.

With these small, pilot projects, social scientists and politicians are observing the effects of a basic income on the economic, social, and personal well-being of residents before launching large-scale programs.

Can UBI Really Level the Playing Field?

With a cushion, Widerquist says people will be less likely to settle for certain jobs and living arrangements, causing employers and property owners to cut better deals and prioritize clients, customers, and employers.

I think it will promote growth, Murphy says.

The rich and well-off may use the extra money to invest, and possibly begin investing in low-income communities, which works in favor of those in both social classes, Murphy says. He also says it could revitalize local economies, because those who rely heavily on the cash grants are more likely to spend locally.

Whats the Catch?

Murphy says the tax reform needed to make UBI a reality must be progressive. That way, it will avoid a major concern for the middle class the upper class will evade taxes, and the middle class will have to fit the bill for the non-workers of the world.

Widerquist argues that implementing this program requires open minds that are willing to move away from an economic system where the upper class maintains control over the flow of cash through ownership and stringently structured government programs. Instead, he thinks the government and society should first focus on eradicating poverty, and the roads to economic prosperity will follow.

The con is that the devil is in the details, Widerquist says. There are some [programs] that want to redistribute less to the poor that would not be better than the programs we already have.

Is UBI Feasible?

The answer is yes, Widerquist says.

The net cost of a basic income, large enough to eliminate poverty in the United States, is $539 billion a year, Widerquist says. Thats only a fourth of what the government is spending on entitlements.

Although it would be a big item in the federal budget, Murphy says he thinks its even cheaper to implement and maintain than Widerquists projections suggest.

Its going to take a commitment, but some of the calculations that are out there are actually way too high, he says.

With no means testing, Murphy says, there is no need to hire people to interview citizens, which saves money compared to requirement-driven social assistance programs.

The money poured into a basic income program would represent about 3% of the gross domestic product, which would put everyone above the poverty line, Murphy says.

Also, Widerquist and Murphy suggest that while universal basic income is possible without drastically cutting other programs, like unemployment benefits or universal health care, there are other ways to keep costs down. Those include trading UBI for programs like food stamps (since it is a cash grant), or taxing items like pollution, traffic, and electronic financial transactions.

MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.

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9news.com | Should all Americans receive a guaranteed income? - 9NEWS.com

Michelle Banks feels no shame in admitting sheusesthe Calgary Food Bank to get through what's been a stressful and worrying couple of years.

Banks and her three young children are considered "food insecure" a growing problem in this city that has yet to show any sign of letting up.

Being food insecure means that you don't have adequate access to food because of financial constraints.

According to the Canadian Community Health Survey, 11.4 per cent of all households in Alberta approximately 169,000 experienced some level of food insecurity in 2014,and that's when Alberta's economy was booming and jobs were plentiful.Since then, the economy has tanked and has posted two straight years of recession.

While non-profit groups, private businesses and volunteers scramble to feed hungry Calgarians, experts warn that food banks and free lunch programs are not the solution.

What's needed, they say, is a basic income guarantee to help eliminate the growing number of people living in poverty.

Children at a Boys and Girls summer camp in southeast Calgary line up to get lunch. (Bryan Labby/CBC)

"It's been tough for us," said the mother of three. "We have been low on food so we've had to use the food bank and stuff like that."

Banks picked up a few bags of food at a Boys and Girls Club of Calgary summer camp that her children are attending in southeast Calgary.

The hampers are being distributed over the summer months.Many of the 30 children who attend the camp are also given sandwiches, snacks and fresh fruit.

Ryan Lumsden, left, and Evan Olsen with Made Foods prepare lunches for a summer program that delivers food to young Calgarians in need. (Bryan Labby/CBC)

It's part of a pilot program to reach hungry kids during the summer when school is out and they don't have access to community lunch programs.

It's called Food Finder YYC, and it's being run by a number of organizations, including Brown Bagging for Calgary's Kids, an organization that provides lunch to 3,200 children every day during the school year.

How Food Finder YYC is helping Calgary kids through the summer0:32

"This just broke our hearts, to think that these kids we are feeding during the school year ... have nothing to eat [during the summer]," said Tanya Koshowski, the agency's executive director.

Children and families in need simply text "food" to a certain number and they'll be provided with information about how to qualify and where to pick up the food.

"This isn't for entitlement or laziness or taking advantage of something," Koshowskisaid. "It's about families or kids that are in need."

Tanya Koshowski, executive director of Brown Bagging for Calgary Kids, is spearheading a summer pilot program to deliver lunches to children in need. (Bryan Labby/CBC)

Another agency that helps feed hungry Calgarians is the Community Kitchen Program, and it's seeing an increase in demand.It's hoping to feed 15,000 kids this summer.

Lana Avery,one of the staff members at the Community Kitchen Program,says at one of the lunch delivery locations a boy told her he was grateful for the food because he hadn't eaten in three days.

"It broke my heart," Avery said.

Lana Avery, one of 12 employees at Community Kitchen Program of Calgary, says she was heartbroken after a young boy told her he hadn't eaten in three days. (Bryan Labby/CBC)

The Community Kitchen program also provides food hampers to families in need. A separate program distributes boxes of fresh food to individual families at a reduced cost.

The organization is looking to provide more than the 130 current pickup locations because of growing demand.

"People are going through hard times, loss of jobs, not being able to feed their children. They're just everyday citizens like you and me, and they've fallen on hard times," said Sundae Nordin, the non-profit's CEO.

Although some indicators show Alberta's economy is on the rebound, her agency hasn't seen it translate to fewer clients.

Sundae Nordin, CEO of Community Kitchen Program of Calgary, says her agency has seen a definite increase in demand for its services. (Bryan Labby/CBC)

"We are seeing an increase, definitely," Nordin said."The problem is hunger and poverty in our city."

Food banks and children's feeding programs are not the solution, according to Lynn McIntyre, professor emerita of in the Department of Community Health Sciences at the University ofCalgary.

"That is absolutely not a solution. Income is a solution," McIntyre said.

She says food banks have risen from being a temporary measure in the 1980s to becoming institutionalized, and have made people think they are part of the solution.

"It really distracts people from understanding what the root cause is," McIntyre said.

Yvonne Stanford, with the Calgary-based Basic Income Action Group, hasbeen advocating for a basic income guarantee for years.

She says boosting wagesto either Calgary's living wage, now estimated at $18.15per hour, or a percentage of the low income cut offcould help reduce poverty and ultimately food insecurity.

Yvonne Stanford is with the group Basic Income Action Group, which advocates for a basic, minimum income to help reduce poverty and food insecurity. (Bryan Labby/CBC)

"From a human rights perspective, every one of us will benefit from a more equal society," Stanford said.

People experiencing food insecurity aremore likely to have any number of chronic health conditions, such as diabetes, cardiovascular disease, hyper-tension, mental health disorders, migraines, back problems and asthma, according to a director in nutrition services with Alberta Health Services.

"Even at the marginal level ...your risk of having poor health and poor health outcomes is considerably higher," said Sheila Tyminski.

Sheila Tyminski is a registered dietitian and a director in nutrition services with Alberta Health Services. (Bryan Labby/CBC)

Tyminski says research from Ontario shows health care costs for people who experience marginal to severe food insecurity is 23 per cent to 121 per cent higher compared to people who are considered food secure.

"In the last number of years, we haven't seen any improvement in the rate of household food insecurity. One in six children in Alberta live in a household that experiences food insecurity, and that more than one in 10households in Alberta experiencefood insecurity, that's enormous, that's very significant," Tyminski said.

Children enjoy a lunch that was provided by Food Finder YYC, a pilot program that aims to reach low-income neighbourhoods during the summer months. (Bryan Labby/CBC)

Koshowski says that while she agrees that food banks and children's food programs shouldn't be considered a long-term solution to hungerand poverty, she remains committed to helping those in need.

"We do believe that if kids are in need for food that it does take a village to raise a child. So the community has the resources and the capacity and the desire to actually want to care for kids," Koshowski said.

Michelle Banks, pictured here with her children, Ciara, Kolton and Hayden, says she's gone to the food bank to help feed her family. (Bryan Labby/CBC)

Michelle Banks is grateful.

"It's very importantit's there, especially if you're lacking in food. In some way, you're always covered because there's people who are kind and generous out there to help other people and families," said Banks.

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More Calgarians struggle to feed their families over the summer months - CBC.ca

A new local basic income group in the United Statesbased in New Orleans (a.k.a. the BIG Easy)was formed in summer 2017 and is currently holding monthly meetings.

The group is led by Scott Santens, a well-known basic income write and advocate as well as the treasurer of BIENs US affiliate, US Basic Income Guarantee, Inc (USBIG).

Meetings are currently being held on the last Wednesday of every month, with discussion oriented around the general topic of what can be done to advance basic income on both local and national levels.

For more information and updates, see the New Orleans Basic Income Meetup page: https://www.meetup.com/New-Orleans-Basic-Income-Meetup/.

In additional to nationwide networks like USBIG and Basic Income Action, the US is home to several basic income advocacy groups that are active on a local level, including groups based in New York, Minneapolis, San Francisco, and Seattle.

Photo: the street where the New Orleans basic income meet-ups are being held (photographed by Kate McFarland during the New Orleans Basic Income Create-a-thon).

Kate McFarland has written 452 articles.

Kate has previously made a living as a professional student, but is retired for the time being. Regarding her present work in the UBI community, you may read more here.

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NEW ORLEANS, LA, US: Local basic income group begins to hold monthly meetings - Basic Income News

The latest report from Northern Policy Institutes Basic Income Guarantee series argues there are a number of advantages and challenges to using the personal income tax system to deliver a basic income guarantee in Ontario.

As author Lindsay Tedds points out, our current tax system is not just used to raise revenue; it has become an increasingly important instrument for delivering income support. Many, including Hugh Segal, special adviser for the Ontario Basic Income Pilot, have suggested the Canada Revenue Agency could play a natural role in the administration of a basic income program.

The report, titled Implementing a Basic Income Guarantee Through the Personal Tax System: Benefits, Barriers and Bothers, explores this idea in more detail, initially highlighting the value of using the tax system to implement a basic income guarantee.

According to Tedds, using the tax system could simplify a very complex, often overlapping process for recipients of social benefits, while at the same time reduce administrative costs. Additionally, the tax system already has the tools to deliver a basic income guarantee namely, through refundable tax credits.

But while Tedds acknowledges advantages to having a single administrative structure for social assistance, "it is important to remember that Canadas tax system is itself complex, intimidating, and not easy to navigate especially for those who may require a BIG the most, he writes. Along with the benefits "there are also a number of challenges."

The report suggests income accuracy and Canadas harmonized tax system could prove to be the most significant hurdles to in delivering basic income in this way.

Any basic income would have to be funded through tax revenues and/or clawbacks, both of which depend on the accuracy of the income reported.

Tedds also outlines various ways in which inaccurate income reporting occurs in Ontario.

Another formidable challenge to using the tax system for a basic income guarantee is Canadas harmonized tax system.

Provinces are bound by tax-collection agreements which restrict their flexibility in designing tax programs. Those wishing to make significant changes are required to receive approvals from other provincial and territorial governments, along with the federal government which requires a high degree of partnership and collaboration.

Finally, although the tax system could provide a basic income through cash transfers, the Canada Revenue Agency is not equipped to provide the many other services that are important to low-income social welfare recipients like employment supports and referrals to other agencies, Tedds notes.

Addressing these implementation details, in fact, would be linked to both the policy and objectives of a basic income guarantee," the author concludes. "Such issues could be solved, if not easily, but they would require real effort, discussion and the maturity of all the players involved.

The paper is the fourth of a series that explores the various topics presented at NPIs Basic Income Guarantee conference last October. Report topics include food insecurity issues, potential models for a BIG pilot, tax implications, and the potential impact on social innovators and First Nations.

To read the full report, visit http://www.northernpolicy.ca.

To view presentations from the NPIs BIG conference and explore comments and feedback from participants, visit http://www.northernpolicy.ca/big.

sud.editorial@sunmedia.ca

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Value in using tax system for basic income: Report - The Sudbury Star

Society and working life are changing at an incredible pace today. SitraMegatrends 2016is one publication, among others, that introduces the idea that humankind will change more in the next 30 years than in the past 300. This can already be seen as changes in the nature of work and the disappearance of professions. In the future, many companies will not need a large number of employees to produce large profits. One example is Instagram, which had only 12 employees when it was sold to Facebook in 2012 for USD 1 billion. In comparison, the 20th-century photography giant Kodak employed more than 140,000 people at its peak. This example is indicative of the potential change that digitalisation is capable of bringing about.[i]

Even if the boldest predictions about the impacts of digitalisation on the labour market do not come true, polarisation and uncertainty in the labour market is likely to increase in the future.

Many people feel that basic income is the best long-term option for dealing with change caused by technological development.

Many people feel that basic income is the best long-term option for dealing with change caused by technological development. Basic income is considered a flexible way of guaranteeing a minimum income for people in a situation where demand for everyones work is not sufficient, income comes from many sources, and social securitys rigid classification of people as employed or unemployed is no longer appropriate. Other reasons used to justify basic income include the need to simplify the social security system, plug loopholes and dismantle disincentives.

Basic income is defined as an income paid personally to all members of society on a regular basis without conditions or means testing. Further income can be earned without losing basic income. Several models for implementing basic income have been proposed, focusing on how to finance the system and other details. However, the models still require development in order to realise the expectations set for basic income.

Many of the models take increased earnings into account when taxing income. Although the benefit is, as a general rule, the same amount for everyone, steps can be added, for example, based on the recipients age or some other criterion. Various means-tested components of social assistance can be retained alongside basic income. In addition to basic income, the term citizens wage has also been used in Finnish discussions. At times, this has referred to income without a work requirement and at other times, to income that requires some sort of service to society. Terms like citizens income, participation income and negative income tax have also made part of the discussion.

Even during the early stages of industrialisation, social reformists proposed that dividends on the income from common property be distributed on a regular basis or as a lump sum. In particular, land and natural resources were considered to be such common property. Similar ideas have also been proposed today, especially in reaction to increases in the wealth gap that may be caused by digitalisation. Some people believe that income taxes are not the only legitimate way of financing basic income, because all wealth is ultimately the result of collective activities. Thus, financing for basic income should be arranged in another manner, for example, by taxing property or capital and the income from them, or even by some sort of robot tax. However, most basic income models link income taxation and basic income, possibly supplemented by other financing.

Many countries are already planning basic income experiments.

Basic income and the ideas surrounding it have been discussed as a way of reforming social security for several decades. In recent years, this debate has been activating in different parts of Europe and North America and also in some so-called poorer countries. Many countries are already planning basic income experiments. Several Dutch cities want to launch their own basic income experiments. Canada too, is also preparing an experiment, while a private capital investment company in the United States plans to implement its own basic income project.

The first basic income experiment in Finland was launched at the beginning of 2017 and will last two years. Its target group are labour market subsidy or basic unemployment allowance recipients between the ages of 25 and 58. Two thousand people from this group have been selected at random for the trial. The tax authority is not involved in the first experiment, so the taxation model for the participants is the same as for other Finns. The tax-exempt basic income in the experiment is EUR 560 per month, and it will replace basic daily allowance of the same amount. Any other social security benefits will remain unchanged. If an unemployed person participating in the experiment finds employment, he or she will not lose the basic income and the sum will not be reduced. In practice, this is the feature that is most beneficial to participants and will potentially improve the incentive to work. The primary aim of the experiment is to determine whether participants are more likely to find employment than other unemployed people. It is part of the government programme of Finlands current government and separate legislation has been passed for the experiment.

The terms negative income tax and citizens wage were first postulated in the 1970s, but the discussion became more regular during the 1980s. Political discussion also addressed the idea of a basic income system, which would harmonise income transfers and guarantee a statutory minimum income regardless of a persons life situation. Starting in the mid-1990s, the term basic income gradually established itself. Although interest has varied, the idea has never completely disappeared from public discussion. The discussion usually peaked prior to parliamentary elections in years when basic income was part of party platforms (1987, 1994, 1996-1998, 2006-2007). The latest and highest peak in discussion occurred prior to the 2015 elections, a result of the planned implementation of a basic income experiment by the government now in power.

Although this interest has crossed party lines, there are many differences concerning the objective of basic income and the best model for it.

The political parties in Finland have shown varying levels of interest in a citizens wage and basic income. Although this interest has crossed party lines, there are many differences concerning the objective of basic income and the best model for it. Along with political parties, many interest groups, experts and opinion formers have taken part in the discussion.

The understanding of the nature of the citizens wage and basic income has varied over the years. In the 1980s, a citizens wage was seen as a potential solution to the decrease in industrial work caused by technological development. Automation was expected to radically reduce the need for human work. A citizens wage was primarily considered as a way to reduce the supply of work to meet the reduced demand and provide a decent income for people without employment. A citizens wage was seen as a means of sharing work more equally and shifting some people to various non-profit work in the softer sector of society (households, associations or local communities). People often called for a complete redefinition of the concept of work.

Discussion of the citizens wage decreased during the recession in the early 1990s and revived again after the worst years of recession had passed. At the same time, the term basic income gradually became more common and replaced the citizens wage term. Record unemployment levels throughout the latter half of the 1990s ensured that interest in basic income remained high. However, understanding of basic income changed after the recession. This was associated with a more general change in social policy discussion that provided more space for policy actions related to labour supply factors and activation of the unemployed. In contrast to the discussion of the citizens wage in the 1980s, basic income was considered a way to encourage people to also accept casual and low-wage work rather than only full employment. People believed that expanding the service sector could compensate for the loss of industrial jobs if employment costs were reduced, collective agreements became more flexible and social security changed and moved in a more encouraging direction. Basic income was seen as a way of dismantling social security disincentives so that working would always increase net income. Basic income would be a fairly low base wage serving as a foundation for building income from several sources.

As employment rates improved in the early 2000s, discussion of basic income decreased. The discussion revived in response to a motion to improve the rights of temporary workers made by the precariat movement in 2006. Activists demanded a basic income that would safeguard a decent income and improve the bargaining position of low-income earners on the labour market. Basic income was widely debated in newspaper columns in 2006-2007, with the Green Party highlighting the basic income theme prior to the parliamentary elections. Attention now focused mainly on changes in work and uncertainty of income. The traditional social security system, with its disincentives and complicated rules, was seen as a poor match for post-industrial labour market needs. Basic income was presented as an investment focusing on work and entrepreneurship, which would make it possible to pursue a new kind of full employment (made up of temporary jobs). The latest debate has revolved around digitalisation and the basic income experiment planned by Juha Sipils government.

Other factors behind the new international basic income discussion include the view that the current phase of robotisation and digitalisation threatens to destroy more jobs than technology development can produce in other areas. The new working life that is now evolving will also require a new kind of social security. Basic income is considered an important part or at least a significant option for this new system.

The arguments for and against basic income are rarely based on scientific evidence. No results have been measured because basic income has never been properly tested in practice. Various operators also have a different focus regarding what they see as the most important benefits or threats of basic income. A list of the arguments presented by key defenders and opponents of basic income is presented below.

For:

Basic income would

Against:

Basic income would

A flat general income has also been considered a more equal way of providing social security to people in different life situations.

The aim of basic income is to influence labour market activities and social policy principles and practices. Although different operators want to achieve different things with basic income, common targets include clarifying support system bureaucracy, eliminating the disincentives associated with combining social security and work, preventing people from falling through the cracks of social security, reducing poverty, and enabling flexible transition between different life situations. Automatically granting the same minimum income security to everyone has been considered a way to reduce the red tape associated with granting benefits and facilitate the employment of benefit recipients because all income would no longer have to be reported to the authorities. In addition, basic income has been seen as a way to provide income security for those who, despite a low income, are not entitled to benefits for one reason or another, or who have been unable or unwilling to apply for benefits to which they are entitled. A flat general income has also been considered a more equal way of providing social security to people in different life situations and enabling flexible transition between different forms of work, studies and family life.

Opponents of basic income have generally focused on the presumed high cost of the system and its negative effects on work morale. Opponents argue that basic social security paid unconditionally would provide the right to a free ride and weaken the position of work as the foundation of our society. Opponents and defenders can be found in political circles on both the right and the left. The right has primarily been concerned about the costs of the system and its incentive effects. The left (especially in the union movement) has been worried that basic income would cause an increase in low-income work and polarise the labour market.

The idea of basic income is to deliver a periodic cash payment to everyone in the system on an individual basis. According to the definition, there are no conditions or work requirement involved with receiving basic income. The purpose is not to increase the net income of middle- or high-income earners, so basic income models nearly always involve a tax system reform in which the added income provided by basic income is recovered from high-income earners via taxation.

The purpose of basic income is generally considered to be the replacement of different forms of means-tested minimum social security. The starting point for Finnish discussion has usually involved separating the housing allowance from basic income, but in theory it could also be covered by basic income if the basic income was high enough. However, this would present a challenge in terms of financing. Another challenge would be how to take regional differences into account. For example, if the basic income paid in a small community was based on housing costs in Helsinki, this could mean an unreasonably high income without a work requirement. On the other hand, basic income based on housing costs in small communities would be inadequate in the Helsinki capital region. Housing costs also differ depending on whether a person owns or rents their home. Regional differences in housing costs could be taken into account by, for example, making basic income proportional to the average rent per square meter in the community. Differences in the type of housing could be balanced by taxation.

One possible method of implementing basic income is a negative income tax model. This model involves only paying basic income to those who fall below a certain income level so that the amount of the payment gradually decreases as the persons income rises.

Basic income models are very different.

Basic income models are very different. For example, they can be classified according to the models:

Depending on the model, basic income is a rather extensive reform of the tax and social security system that has to be combined with existing institutions in one way or another. Basic income is generally seen as a system that would replace means-tested minimum social security benefits and put them on the same level. The higher the basic income, the greater the number of subsidy forms it could replace. However, proposals generally suggest that some means-tested benefits could be retained alongside basic income, at least for such special groups who, for one reason or another, cannot be expected to participate in the labour market.

Basic income models vary according to which groups would be included in the scope of the system. In some models, basic income would only be paid to people of working age. Other models would also include minors and/or pensioners, and in this case basic income could have different levels for different age groups. Some models propose that basic income only be paid to citizens while others would grant it to non-citizens with permanent resident status, for example, after they had lived in the country for a certain period of time. There are also models where a benefit called basic income would only target a certain population group, such as those entitled to social security, people who receive unemployment benefits or have irregular income, or where the right to basic income would have a time limit. Other proposals include models that resemble basic income but are based on a work requirement and/or means testing.

The level of the benefit also varies considerably between different models. Full basic income means that the level of the benefit is sufficient to cover the essential costs of housing and living. Partial basic income means that other social security is needed to supplement basic income if a persons earnings are not sufficient. Other differences between models include whether basic income would be subject to taxation or whether it would be a tax-exempt benefit. The idea of basic income as a more limited system functioning as part of existing social security has also been proposed.

In theory, there are many different alternatives for financing basic income. Many of the models would reform income taxation so that the added income provided by basic income would gradually be collected back as a persons earnings increased. The idea is that basic income would not significantly change the net income of an average wage-earner. Adjustment of tax rates and the amount of basic income can affect income distribution: the basic income model can be implemented in a way that maintains the current income distribution or in a way that changes it in one direction or another. Money will circulate in the economy in a different way when everyone receives basic income and also pays a higher income tax. Income taxation can be supplemented with other direct or indirect taxes as needed.

A switch to a flat tax rate for income taxation is often proposed in conjunction with basic income. However, this is by no means essential, because progressive taxation can also be used with basic income.

The basic income models proposed in Finland have generally been criticised for the high marginal tax rates they require, which are seen as disincentives. Financing based on income taxation can be supplemented by other taxes in order to reduce the marginal tax rate in basic income models. The basic income models presented in Finland have, for example, proposed environmental taxes, inheritance and wealth taxes, the elimination of tax deductions, and an increase in property and capital income taxation as ways to supplement financing by means of income taxes. Use of consumption taxes to finance basic income has also been suggested in some connections.

One possibility for implementing basic income is the so-called negative income tax model. Negative income tax is a combination of taxation and automatic income support in which an income transfer is paid when a persons earnings remain below a certain level. This is gradually reduced as earnings increase. Although basic income and negative income tax have a somewhat different history and support base, they can technically produce nearly the same result. The advantage of negative income tax is that it could help achieve the presumed impacts of basic income at a lower marginal tax rate. However, implementation of this model would require real-time monitoring of earnings. The national income register that is planned to be launched in early 2019 would make this possible in Finland.

Micro-simulation analyses can be used to assess the impacts of basic income models on households and the entire population. These analyses generally indicate that basic income would increase net earnings for low-income earners who have some earnings in addition to social security. However, the effects would vary in different cases due to the joint impact of benefits.

Basic income would most clearly increase net income for social security recipients whose current benefit level is lower than the basic income and for those with no income or a low income who dont receive any social security benefits. Basic income, for example, would substantially improve the income of entrepreneurs with the lowest earnings, because currently, they are not eligible for an adjusted unemployment allowance. Efforts are often being made to build basic income models so that the net earnings of middle-income earners would not change at all.

The relationship between basic income and the EUR 300 of exempt earnings currently used in Finland should also be examined. If the exempt earnings component is not included in the basic income model, people doing casual work may actually end up with less net earnings. Child and activation increases for labour market subsidy and basic unemployment allowance may also be a disincentive if they remain in force.

The most interesting effects of basic income would, naturally, be so-called dynamic effects, in other words, those affecting human and company behaviour.

The most interesting effects of basic income would, naturally, be so-called dynamic effects, in other words, those affecting human and company behaviour. An experiment is the only way to bring about these effects to some extent. For example, there have been fears that a higher marginal tax rate would weaken work incentives for middle- and high-income earners.

Conversely, it has been suggested that basic income would encourage people to try entrepreneurship because it would guarantee a minimum income even when the company is struggling. Economists have shown that the proposed basic income models would still contain some disincentives unless other social security elements were reformed at the same time. However, the mere knowledge of a steady income could psychologically increase the willingness to accept casual work. One of the problems in terms of todays social security is the so-called bureaucratic disincentive. This refers to the extra paperwork that casual workers must complete in order to report working hours, work locations and the pay received for that work to the authorities and the delays in payment caused by the need to check that information. The complicated system also makes it difficult for recipients of overlapping subsidies to understand how work affects different benefits. Uncertainty about the effect that work income has on benefits may already be enough to create a disincentive.

In order to achieve the desired positive effects, more attention must be focused on the joint impacts of basic income, other social security components, and taxation. The current basic income model still has many shortcomings, particularly in relation to work incentives. One solution is to lower taxation on low incomes or implement a tax deduction for work income that only applies to low-income earners. The fact that the low level of primary benefits forces many low-income earners to regularly seek basic social assistance represents another disincentive. If we want to restore basic social assistance to its original role as temporary emergency assistance and simultaneously prevent it from causing disincentives, basic income must be higher than the existing minimum unemployment allowance.

A reform of the housing allowance would also be needed in conjunction with the basic income model, by allowing, for example, a certain amount of exempt earnings for low income earners. The possible benefits of the basic income model would probably be most effectively achieved if basic income could be set high enough to also replace the housing allowance and in some way take regional and other differences into account in the costs. However, in this case, the high cost of financing basic income would be a challenge.

This article is based on Johanna Perkis reportSuomalainen perustulokeskustelu ja mallit(Public debate and proposed models for a universal basic income system in Finland)[ii].

This article is part of The Next Era, a global initiative to track, connect, and amplify emerging ideas for an open and forward-looking society. The Next Era is a collaboration between the Finnish Innovation Fund Sitra and the Nordic think tank Demos Helsinki.

[i]Kiiski Kataja, Elina (2016):Megatrends 2016: The future happens now. Sitra.https://www.sitra.fi/julkaisut/Muut/Megatrendit_2016.pdf

[ii]Perki, Johanna (2016):Suomalainen perustulokeskustelu ja mallit.Typapereita 85/2016.Kela.http://hdl.handle.net/10138/159369

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Does Basic Income Solve Anything? Grasp the Arguments for and ... - Futurism