RugbyRebels

I've been having discussions about UBI elsewhere a few weeks ago, which has now become 2 elsewheres, so let's discuss it here (we did briefly around April, as a potential spin-off from furlough and SEISS).

Putely on the maths, I'm running on the assumption than UBI would be set at a pretty basic level, at least initially, enough food, housing, gas/electricity and broadband. If you want a big TV with an expensive monthly contract, or an overseas holiday - you can still get a job. With UBI, other forms of government support would not be necessary.

UBI would replace pretty much all other welfare payments (some disabled would need higher UBI). So that's £275B already accounted for.
It would also remove the need for the "personal allowance" 0% tax bracket, so the first £12k of income for 37M people (it'd be less because plenty work, but earn less than £12k - but we're doing approximations here) - so that's another £444B. Essentially, UBI becomes the personal allowance - it's tax-free, anything earned above that, is taxed.
DWP is currently the biggest department of HMG, with 80,000 employees, Staffing costs around £2.6B. A massively simplified UBI would need less than 1\10 of this, so there's another couple of billion on staffing, let alone all the other costs associated - especially London offices. Negligible for these purposes, but allows a little leeway for our margin of error.

Either way, we've can put somewhere around £700-722B into a pot to be redistributed with UBI. If we "simply" did that, and didn't touch the rest of the tax brackets (though I would anyway), for a population of 66.6Million, that gives us £10,510- £10,840 for every man, woman and child in the country (AKA, anyone with a national insurance number).


To put that number into context, HMG think £12k is a livable wage (personal allowance before they start taxing you). From personal experience, my wife and I both earn around that, and we're... okay, no real luxuries, but not particularly close to poverty. We certainly have more than we would ever expect UBI to cover. We live in Gloucestershire, so hardly London prices, but hardly Northumbrian or Highlands either.
I'd suggest that an average around £10-11k as a UBI would be enough to cover the absolute necessities (we spent years earning significantly less than that which was genuinely concerning, but enough to survive).



Okay, so it's more complicated than that, and the above is purely a back-of-an-envelope costing exercise. Whilst kids are expensive, they don't cost the same in upkeep as an adult (at the very least, they tend to use the same house as their parent/s); different parts of the country would have different housing costs - though I'd consider the extent of that to be a bad thing etc etc. There would be some fraud, but it'd be tough to pull off, birth certificate and national insurance number needed to qualify, ended at point of death... the only viable way is to bury a body in your back yard, and that typically doesn't end well for anyone. These are all points for discussion - is UBI still universal if it's region dependent? Do we spend enough on it to allow a minimal quality of life in the highlands, and barely enough to buy food in London; or a minimal quality of life in London, and upper-middle-class in the Highlands? Do we go somewhere in between, with differences but not enough, and an attempt to even out inequality over time, using UBI as part of market forces? Do we give people more if they chose to live solo rather than flat-share or with partner?

Of course, there are other benefits and risks associated with UBI; it would be a major overhaul for how this country works, and treats its citizens - which is a good debate to have.

I’m not anti this, although I’d need to understand how it affects tax rates for higher earners. For those In low paid work it would result in a higher level of income and remove any stigma of benefits.

I’d have some concerns about how high any changes to the tax bands would be for those currently paying 40 or 45% and the degree to which jobs that attract higher wages become in any way attractive if too highly taxed.

Inflation might be a concern if prices are driven up by higher spending levels.

An obvious point would be that you would still need a disability benefit as some specialist requirements would dwarf £12k pa.

You would also need to consider non cash benefits such as housing for those unemployed or disabled.

I don't really see an alternative. Especially with how many more jobs seem set to become automated in the next 20-30 years.

Yeah, taking everyone out of poverty would be nice wouldn't it, but surely there's no chance here? Fear about higher tax on high earning jobs trumps everything. Making life liveable for poor people is just not important to the people who get to make these decisions.

Which Tyler wrote:.. A massively simplified UBI would need less than 1\10 of this

I think this would be a bit optimistic - the register size would be
something like double in size, and the entitlement checks / id fraud etc would need ramping up.
New IT platforms rarely meet fit for purpose and reacting to constant changes in policy and public behaviours will need building in, staff wise.

Something needs to change soon though, as the long anticipated march to automation and online processes has not delivered the
possible benefits for all (yet).
Maybe that's a silver lining in the Covid cloud.

Sandydragon wrote:I’m not anti this, although I’d need to understand how it affects tax rates for higher earners. For those In low paid work it would result in a higher level of income and remove any stigma of benefits.

I’d have some concerns about how high any changes to the tax bands would be for those currently paying 40 or 45% and the degree to which jobs that attract higher wages become in any way attractive if too highly taxed.

Inflation might be a concern if prices are driven up by higher spending levels.

An obvious point would be that you would still need a disability benefit as some specialist requirements would dwarf £12k pa.

You would also need to consider non cash benefits such as housing for those unemployed or disabled.

Initially at least, with the maths above - there wouldn't need to be any change to the tax structure beyond ditching the personal allowance of £12k (replaced outright by the UBI). Now I have a preference for also changing the tax brackets for higher earners; but that needn't be related to UBI.
Inflation is an absolutely valid point for discussion - as are any other unintended (but potentially predictable) consequences.
Absolutely, disability would be on top, and something would need to be done for housing - which would be by far the largest location-specific issue.

Digby wrote:I don't really see an alternative. Especially with how many more jobs seem set to become automated in the next 20-30 years.

Which is what first got me taking it seriously a few years ago; having been dismissive when I first heard about it.

Mikey Brown wrote:Yeah, taking everyone out of poverty would be nice wouldn't it, but surely there's no chance here? Fear about higher tax on high earning jobs trumps everything. Making life liveable for poor people is just not important to the people who get to make these decisions.

The maths above suggests you wouldn't need higher tax for higher earners - not in and of itself (though it would be nice of course, as would actually enforcing those high earners to pay their actual tax bills, rather than moving it offshore - but then Brexit shows how opposed to that people are)

Galfon wrote:I think this would be a bit optimistic - the register size would be
something like double in size, and the entitlement checks / id fraud etc would need ramping up.
New IT platforms rarely meet fit for purpose and reacting to constant changes in policy and public behaviours will need building in, staff wise.

double as in 20% of current? or 200% of current?
Entitlement checks would be easy enough "do you exist?" No means testing. No proof of job hunting. No fighting to prove eligibility beyond possessing a NI number. HMRC and NHS already know all of this.
IT platforms, absolutely yes.

Mikey Brown wrote:Yeah, taking everyone out of poverty would be nice wouldn't it, but surely there's no chance here? Fear about higher tax on high earning jobs trumps everything. Making life liveable for poor people is just not important to the people who get to make these decisions.

Higher tax bands affect normal people too, not just the super rich. And if the metric of success is to remove everyone from relative poverty then you are almost certain to fail.

Not sure I suggested either of those things, but would still just answer "so?"

Sandydragon wrote:

Mikey Brown wrote:Yeah, taking everyone out of poverty would be nice wouldn't it, but surely there's no chance here? Fear about higher tax on high earning jobs trumps everything. Making life liveable for poor people is just not important to the people who get to make these decisions.

Higher tax bands affect normal people too, not just the super rich. And if the metric of success is to remove everyone from relative poverty then you are almost certain to fail.

Trickle down! Good to see that it is still a thing.

Which Tyler wrote:double as in 20% of current? or 200% of current?
Entitlement checks would be easy enough "do you exist?" No means testing. No proof of job hunting. No fighting to prove eligibility beyond possessing a NI number. HMRC and NHS already know all of this.
IT platforms, absolutely yes.

'double..'
-estimate of those receiving this new benefit vs. UC, and other legacy benefits. (double as in twice as many.)

'Entitlement checks would be easy enough "do you exist?" No means testing.'
- need to define elibility first, then we'd know what checks.
i'm sure where do you live/ how long have you lived here?/where are you now ? might be factors

'No proof of job hunting. '
-Totally. There should be other separate support for genuine jobseekers, not linked to benefit.

'No fighting to prove eligibility beyond possessing a NI number. HMRC and NHS already know all of this.'
- if we actually get hmrc and nhs systems in sync for this, that would be great. It still depends on the data held to be up to date and accurate..

Which Tyler wrote:I've been having discussions about UBI elsewhere a few weeks ago, which has now become 2 elsewheres, so let's discuss it here (we did briefly around April, as a potential spin-off from furlough and SEISS).

Putely on the maths, I'm running on the assumption than UBI would be set at a pretty basic level, at least initially, enough food, housing, gas/electricity and broadband. If you want a big TV with an expensive monthly contract, or an overseas holiday - you can still get a job. With UBI, other forms of government support would not be necessary.

UBI would replace pretty much all other welfare payments (some disabled would need higher UBI). So that's £275B already accounted for.
It would also remove the need for the "personal allowance" 0% tax bracket, so the first £12k of income for 37M people (it'd be less because plenty work, but earn less than £12k - but we're doing approximations here) - so that's another £444B. Essentially, UBI becomes the personal allowance - it's tax-free, anything earned above that, is taxed.
DWP is currently the biggest department of HMG, with 80,000 employees, Staffing costs around £2.6B. A massively simplified UBI would need less than 1\10 of this, so there's another couple of billion on staffing, let alone all the other costs associated - especially London offices. Negligible for these purposes, but allows a little leeway for our margin of error.

Either way, we've can put somewhere around £700-722B into a pot to be redistributed with UBI. If we "simply" did that, and didn't touch the rest of the tax brackets (though I would anyway), for a population of 66.6Million, that gives us £10,510- £10,840 for every man, woman and child in the country (AKA, anyone with a national insurance number).


To put that number into context, HMG think £12k is a livable wage (personal allowance before they start taxing you). From personal experience, my wife and I both earn around that, and we're... okay, no real luxuries, but not particularly close to poverty. We certainly have more than we would ever expect UBI to cover. We live in Gloucestershire, so hardly London prices, but hardly Northumbrian or Highlands either.
I'd suggest that an average around £10-11k as a UBI would be enough to cover the absolute necessities (we spent years earning significantly less than that which was genuinely concerning, but enough to survive).



Okay, so it's more complicated than that, and the above is purely a back-of-an-envelope costing exercise. Whilst kids are expensive, they don't cost the same in upkeep as an adult (at the very least, they tend to use the same house as their parent/s); different parts of the country would have different housing costs - though I'd consider the extent of that to be a bad thing etc etc. There would be some fraud, but it'd be tough to pull off, birth certificate and national insurance number needed to qualify, ended at point of death... the only viable way is to bury a body in your back yard, and that typically doesn't end well for anyone. These are all points for discussion - is UBI still universal if it's region dependent? Do we spend enough on it to allow a minimal quality of life in the highlands, and barely enough to buy food in London; or a minimal quality of life in London, and upper-middle-class in the Highlands? Do we go somewhere in between, with differences but not enough, and an attempt to even out inequality over time, using UBI as part of market forces? Do we give people more if they chose to live solo rather than flat-share or with partner?

Of course, there are other benefits and risks associated with UBI; it would be a major overhaul for how this country works, and treats its citizens - which is a good debate to have.

I’ve just had a look at the Money saving expert website for benefits payments. A single parent of 30, with no disabilities and one child aged 8 can claim:
£15.5k in Universal Credit
£1094 in child benefit.

They may also be eligible for council tax assistance, and would get free school meals.

I find it helpful to look at use cases for these kinds of calculations, so in this use case where a single parent has no income and receives no support from a partner, the £12K pa UBI would leave them significantly worse off.

Unless there are supplementary top ups for council tax, rent relief etc, your UBI basic payment would need to be quite a bit higher, probably more like double what you suggest, to cover that.

Of course with 2 adults all that changes. So perhaps it’s basic UBI with a single parent top up for those not in work at all.

morepork wrote:

Sandydragon wrote:

Mikey Brown wrote:Yeah, taking everyone out of poverty would be nice wouldn't it, but surely there's no chance here? Fear about higher tax on high earning jobs trumps everything. Making life liveable for poor people is just not important to the people who get to make these decisions.

Higher tax bands affect normal people too, not just the super rich. And if the metric of success is to remove everyone from relative poverty then you are almost certain to fail.

Trickle down! Good to see that it is still a thing.

I’m thinking more about the motivation to do demanding and responsible jobs which tend to come with a better salary.

Sandydragon wrote:

morepork wrote:

Sandydragon wrote: Higher tax bands affect normal people too, not just the super rich. And if the metric of success is to remove everyone from relative poverty then you are almost certain to fail.

Trickle down! Good to see that it is still a thing.

I’m thinking more about the motivation to do demanding and responsible jobs which tend to come with a better salary.

With disproportionately less emphasis on the responsibility.

Sandydragon wrote:

morepork wrote:

Sandydragon wrote: Higher tax bands affect normal people too, not just the super rich. And if the metric of success is to remove everyone from relative poverty then you are almost certain to fail.

Trickle down! Good to see that it is still a thing.

I’m thinking more about the motivation to do demanding and responsible jobs which tend to come with a better salary.

Which one of these jobs comes with a salary of £250k+? Only the top surgeons, barristers, and generals, maybe? I can't think of many others...

I wouldn't be increasing tax bands for under that sum, not that over that sum will make much difference: those earners will just shift their income elsewhere wherever possible. It's the loopholes that need closing but considering the UK has left the EU in order to keep those loopholes open...

Is people not bothering to do these top paying jobs because of higher tax rates actually an issue with real negative impacts? It’s hard not to feel it pales in comparison to the number of vital jobs that barely pay a living wage.

Mikey Brown wrote:Is people not bothering to do these top paying jobs because of higher tax rates actually an issue with real negative impacts? It’s hard not to feel it pales in comparison to the number of vital jobs that barely pay a living wage.

Well, yeah, indeed. It's not like it's going to impact at all. These high paid jobs aren't entry level, they're progressions... A top surgeon isn't going to turn down the chance to become a specialist because he'll have to pay £X more tax...

It's an insane argument.

Stom wrote:

Mikey Brown wrote:Is people not bothering to do these top paying jobs because of higher tax rates actually an issue with real negative impacts? It’s hard not to feel it pales in comparison to the number of vital jobs that barely pay a living wage.

Well, yeah, indeed. It's not like it's going to impact at all. These high paid jobs aren't entry level, they're progressions... A top surgeon isn't going to turn down the chance to become a specialist because he'll have to pay £X more tax...

It's an insane argument.

Or they will take in a lot more responsibility, have to work more hours and barely register their pay increase due to tax. Unless the increase in salary is very significant, it’s a factor in a decision not to go for promotion. And that’s feedback from real people, not theoretical.

Mikey Brown wrote:Is people not bothering to do these top paying jobs because of higher tax rates actually an issue with real negative impacts? It’s hard not to feel it pales in comparison to the number of vital jobs that barely pay a living wage.

And the pool of people who can do those specialist higher band jobs is smaller. And many of them are just as important, if not more so.

People barely managing to survive on minimum wage or not unemployment is an issue. Equally if those jobs that are are the lower end of the higher tax brackets are no longer of interest, we’d sure another problem for ourselves that is as significant.

Hence my point about not all high tax payers being super rich or even wealthy. And these people vote too and have a say in this country and have been taxed for years to pay for the stuff that low earners don’t pay enough to cover.

Stom wrote:

Sandydragon wrote:

morepork wrote: Trickle down! Good to see that it is still a thing.

I’m thinking more about the motivation to do demanding and responsible jobs which tend to come with a better salary.

Which one of these jobs comes with a salary of £250k+? Only the top surgeons, barristers, and generals, maybe? I can't think of many others...

I wouldn't be increasing tax bands for under that sum, not that over that sum will make much difference: those earners will just shift their income elsewhere wherever possible. It's the loopholes that need closing but considering the UK has left the EU in order to keep those loopholes open...

£250k? Try £50k.

Sandydragon wrote:

Stom wrote:

Sandydragon wrote: I’m thinking more about the motivation to do demanding and responsible jobs which tend to come with a better salary.

Which one of these jobs comes with a salary of £250k+? Only the top surgeons, barristers, and generals, maybe? I can't think of many others...

I wouldn't be increasing tax bands for under that sum, not that over that sum will make much difference: those earners will just shift their income elsewhere wherever possible. It's the loopholes that need closing but considering the UK has left the EU in order to keep those loopholes open...

£250k? Try £50k.

NO ONE IS SUGGESTING TO INCREASE TAX BANDS FOR PEOPLE EARNING 50K!

FFS, seriously, just read what's posted before making a point that has no basis in realism. 50k is not a big wage and it's not a high earner. And I don't think anyone here was suggesting that it was!

Which Tyler wrote:I've been having discussions about UBI elsewhere a few weeks ago, which has now become 2 elsewheres, so let's discuss it here (we did briefly around April, as a potential spin-off from furlough and SEISS).

Putely on the maths, I'm running on the assumption than UBI would be set at a pretty basic level, at least initially, enough food, housing, gas/electricity and broadband. If you want a big TV with an expensive monthly contract, or an overseas holiday - you can still get a job. With UBI, other forms of government support would not be necessary.

UBI would replace pretty much all other welfare payments (some disabled would need higher UBI). So that's £275B already accounted for.
It would also remove the need for the "personal allowance" 0% tax bracket, so the first £12k of income for 37M people (it'd be less because plenty work, but earn less than £12k - but we're doing approximations here) - so that's another £444B. Essentially, UBI becomes the personal allowance - it's tax-free, anything earned above that, is taxed.
DWP is currently the biggest department of HMG, with 80,000 employees, Staffing costs around £2.6B. A massively simplified UBI would need less than 1\10 of this, so there's another couple of billion on staffing, let alone all the other costs associated - especially London offices. Negligible for these purposes, but allows a little leeway for our margin of error.

Either way, we've can put somewhere around £700-722B into a pot to be redistributed with UBI. If we "simply" did that, and didn't touch the rest of the tax brackets (though I would anyway), for a population of 66.6Million, that gives us £10,510- £10,840 for every man, woman and child in the country (AKA, anyone with a national insurance number).


To put that number into context, HMG think £12k is a livable wage (personal allowance before they start taxing you). From personal experience, my wife and I both earn around that, and we're... okay, no real luxuries, but not particularly close to poverty. We certainly have more than we would ever expect UBI to cover. We live in Gloucestershire, so hardly London prices, but hardly Northumbrian or Highlands either.
I'd suggest that an average around £10-11k as a UBI would be enough to cover the absolute necessities (we spent years earning significantly less than that which was genuinely concerning, but enough to survive).



Okay, so it's more complicated than that, and the above is purely a back-of-an-envelope costing exercise. Whilst kids are expensive, they don't cost the same in upkeep as an adult (at the very least, they tend to use the same house as their parent/s); different parts of the country would have different housing costs - though I'd consider the extent of that to be a bad thing etc etc. There would be some fraud, but it'd be tough to pull off, birth certificate and national insurance number needed to qualify, ended at point of death... the only viable way is to bury a body in your back yard, and that typically doesn't end well for anyone. These are all points for discussion - is UBI still universal if it's region dependent? Do we spend enough on it to allow a minimal quality of life in the highlands, and barely enough to buy food in London; or a minimal quality of life in London, and upper-middle-class in the Highlands? Do we go somewhere in between, with differences but not enough, and an attempt to even out inequality over time, using UBI as part of market forces? Do we give people more if they chose to live solo rather than flat-share or with partner?

Of course, there are other benefits and risks associated with UBI; it would be a major overhaul for how this country works, and treats its citizens - which is a good debate to have.

I would set the UBI at the real living wage (so about £17k per year). That way it would be possible to survive and pay essential bills without having a job.

The advantages of this go further than just the micro-economic of giving people a chance to retrain and open their own businesses and thus increase the productivity of the average worker, as well as more money in the average man's pocket massively increases the tax base by creating more spending. It also creates a paradigm shift in the way the government interacts with corporations and other nations.

At present, the UK government has to be obsessed with jobs and unemployment, which leads to things like begging Tata and Nissan to keep plants open so that thousands of low paying jobs aren't lost, and debasing themselves to Amazon and Tesla in the hope that the new warehouse or factory will be built here. This has a massive impact on our tax income, as job creation is seen as better than paying tax.

Now imagine a living wage is paid as UBI. The government now doesn't care how many low paid jobs it can squeeze out of corporations, nor will it face electoral repurcussions from people annoyed that they can't slave for Amazon in order to live. It also is still getting the higher tax base from people spending as they would if they had a minimum wage job. They can afford to make Starbucks et al pay their fair tax bill as well as focussing on more productive jobs rather than just going for numbersnumbersnumbers.

Of course, this all relies on a government that aren't completely in bed with corporations every step of the way.

Puja

Stom wrote:

Sandydragon wrote:

Stom wrote:
Which one of these jobs comes with a salary of £250k+? Only the top surgeons, barristers, and generals, maybe? I can't think of many others...

I wouldn't be increasing tax bands for under that sum, not that over that sum will make much difference: those earners will just shift their income elsewhere wherever possible. It's the loopholes that need closing but considering the UK has left the EU in order to keep those loopholes open...

£250k? Try £50k.

NO ONE IS SUGGESTING TO INCREASE TAX BANDS FOR PEOPLE EARNING 50K!

FFS, seriously, just read what's posted before making a point that has no basis in realism. 50k is not a big wage and it's not a high earner. And I don't think anyone here was suggesting that it was!

Also, let's not forget that marginal tax brackets for the highest earners are at a historically low mark. The highest tax bracket has been taxed at 70% in the past without the country falling over and I believe are taxed much higher in neighbouring countries.

Puja

Stom wrote:

Sandydragon wrote:

Stom wrote:
Which one of these jobs comes with a salary of £250k+? Only the top surgeons, barristers, and generals, maybe? I can't think of many others...

I wouldn't be increasing tax bands for under that sum, not that over that sum will make much difference: those earners will just shift their income elsewhere wherever possible. It's the loopholes that need closing but considering the UK has left the EU in order to keep those loopholes open...

£250k? Try £50k.

NO ONE IS SUGGESTING TO INCREASE TAX BANDS FOR PEOPLE EARNING 50K!

FFS, seriously, just read what's posted before making a point that has no basis in realism. 50k is not a big wage and it's not a high earner. And I don't think anyone here was suggesting that it was!

Which Tyler suggested changing tax rates. The 40% tax rate starts at £50k. My post was in response to WTs original before you lot became all moralistic and assumed I was referring to very high earners.

You brought £250k into the argument somewhat belatedly. If that’s what you meant then be clear FFS.

Puja wrote:

Stom wrote:

Sandydragon wrote: £250k? Try £50k.

NO ONE IS SUGGESTING TO INCREASE TAX BANDS FOR PEOPLE EARNING 50K!

FFS, seriously, just read what's posted before making a point that has no basis in realism. 50k is not a big wage and it's not a high earner. And I don't think anyone here was suggesting that it was!

Also, let's not forget that marginal tax brackets for the highest earners are at a historically low mark. The highest tax bracket has been taxed at 70% in the past without the country falling over and I believe are taxed much higher in neighbouring countries.

Puja

Great way to encourage the brain drain. Thatcher reduced it to 60%. Previous tax them til the pips squeak approaches didn’t do us any favours and were contributory to us being an economic basket case of Europe.

There is also a good argument that with higher tax comes higher tax avoidance.

Sandydragon wrote:

Stom wrote:

Sandydragon wrote: £250k? Try £50k.

NO ONE IS SUGGESTING TO INCREASE TAX BANDS FOR PEOPLE EARNING 50K!

FFS, seriously, just read what's posted before making a point that has no basis in realism. 50k is not a big wage and it's not a high earner. And I don't think anyone here was suggesting that it was!

Which Tyler suggested changing tax rates. The 40% tax rate starts at £50k. My post was in response to WTs original before you lot became all moralistic and assumed I was referring to very high earners.

You brought £250k into the argument somewhat belatedly. If that’s what you meant then be clear FFS.

Fair enough. It is worthwhile noting, however, that even if taxes at 50k+ were raised, tax is marginal and thus only those on only just 50k would see no effect. Plus, those people wouldn't be earning 50k anymore, but 67k, so unless the new tax rate was incredibly punitive, they'd still be better off.

Puja