On Wednesday 14th September a Westminster Hall debate took place about a Universal Basic Income.
The debate was fair and well-informed, with one or two exceptions:
A Member of Parliament suggested that the Citizen’s Income Trust had said that an Income Tax rate of 48% would be required; and another suggested that the Citizen’s Income Trust had said that a Citizen’s Income scheme would generate considerable losses for low income families. Both of these statements relate to one of the schemes – scheme C – researched in a 2015 working paper. The paper recognises that scheme C is infeasible, and also that a similar scheme, scheme A, would be infeasible as well, because that too would generate considerable losses. However, another scheme researched in that working paper, scheme B, would require only a small increase in Income Tax rates, would generate few losses, and would generate almost no losses among low income households. Research on scheme B has now been updated in a further working paper, which shows that an increase in Income Tax rates of only 3% would be required for a Citizen’s Income of £60 per week, that such a scheme would generate almost no losses among low income households, and that the scheme would have a negative net cost.
For a thorough discussion of the feasibility of Citizen’s Income, readers might wish to refer to Malcolm Torry, The Feasibility of Citizen’s Income (Palgrave Macmillan, 2016).