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Daniel Nettle – How Universal Basic Income Solves Widespread Insecurity and Radical Inequality

Summary:
Answering the four big objections from critics of UBI A very good article on the merits of the Basic Income, and I think, probably the best one I've read. And it might not be so expensive after allAt present, most UK adults are taxed at a zero rate on the first £8,164 of earned income, 12% from £8,164 to £11,500, and 32% above £11,500. What this means, in effect, is that anyone earning £11,500 or more is effectively being given a freebie from the state of £3680, compared to being standardly taxed at 32% from the first pound. This figure—£3680 per year—is, you will note, not so very far off my proposed initial UBI of £4160 anyway. Personal tax allowances cost the government around £100 billion per annum in foregone revenue.[15] If my proposed UBI were to be introduced, it would be

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Answering the four big objections from critics of UBI

A very good article on the merits of the Basic Income, and I think, probably the best one I've read. And it might not be so expensive after all

At present, most UK adults are taxed at a zero rate on the first £8,164 of earned income, 12% from £8,164 to £11,500, and 32% above £11,500. What this means, in effect, is that anyone earning £11,500 or more is effectively being given a freebie from the state of £3680, compared to being standardly taxed at 32% from the first pound. This figure—£3680 per year—is, you will note, not so very far off my proposed initial UBI of £4160 anyway. Personal tax allowances cost the government around £100 billion per annum in foregone revenue.[15] If my proposed UBI were to be introduced, it would be reasonable to ask people to pay their taxes from the first pound. For people like me who earn more than £11,500 per annum, the introduction of the UBI would then be largely neutral, my tax bill going up by around £4000, offset by £4000 coming separately into my bank account as UBI. So, if you will allow me very broad approximations, moving to a modest UBI would cost about £200 billion per annum, to be funded by about £100 billion of welfare savings, and about £100 billion from abolishing personal tax allowances—so pretty much fiscally neutral. And this is just a business-as-usual analysis of the likely financial consequences. What advocates believe is that there will be positive knock-on effects: people will be able to move to more productive and enjoyable jobs, or start entrepreneurial activities; people have no financial disincentives to take casual work or increase their hours; the expensive negative psychological consequences of insecurity (anxiety, depression, addiction, maybe even crime) will improve. Thus, what you end up with will be a net saving for the government, not a net cost.

Evonomics.

Daniel Nettle - How Universal Basic Income Solves Widespread Insecurity and Radical Inequality

Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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