Green Party and the Citizens' Income

onlyroz

antrobus wrote: »

£7k a year would cost more like £36 billion. That would mean a basic rate of income tax of 28%.

It's that kind of math that persuaded the Liberal Party to drop the idea.

Under the current system if you earn £30k a year you end up with a take-home pay of £23355 after tax and NI.

Let's imagine a new system where you are paid £7k and then you are taxed at 28% income tax and 12% NI on everything else. On a £30k income you would then end up with £25k (i.e. £7k + £30k - 0.28*£30k - 0.12*£30k).

Doesn't sound too bad to me.

N1AK

The idea of a universal payment is tempting. We've effectively decided as a society that we don't want to allow people to starve etc and it is simple way of handling things. It 'could' be used to streamline benefits etc considerably.

The issue with the Greens idea is that they have no economic sense what so ever. They've set the level far to high to sustain and try and deal with it by taxing the wealthy and companies out of existence. When the wealthy and companies flee the UK like battered spouses running from the family home the economy would collapse and everyone would earn the same: nothing.

BillJones

onlyroz wrote: »

I'm trying to find links to the exact figure they propose but from something I was reading last week I think they're suggesting about £7k a year, plus the removal of the personal allowance, plus the scrapping of most benefits. Pensioners and the disabled would be paid more.

It'd benefit me, as I have no personal allowance, so I'm in...

BillJones

onlyroz wrote: »

Under the current system if you earn £30k a year you end up with a take-home pay of £23355 after tax and NI.

Let's imagine a new system where you are paid £7k and then you are taxed at 28% income tax and 12% NI on everything else. On a £30k income you would then end up with £25k (i.e. £7k + £30k - 0.28*£30k - 0.12*£30k).

Doesn't sound too bad to me.

So it'd also drop my 47% marginal tax rate to 28%?

Better and better!..

antrobus

onlyroz wrote: »

Under the current system if you earn £30k a year you end up with a take-home pay of £23355 after tax and NI.

Let's imagine a new system where you are paid £7k and then you are taxed at 28% income tax and 12% NI on everything else. On a £30k income you would then end up with £25k (i.e. £7k + £30k - 0.28*£30k - 0.12*£30k).

Doesn't sound too bad to me.

My bad. I of course should have said that it would mean an extra 8% on basic rate. Which would of course be levied on top of, not the current basic rate, but the increased basic rate that would have applied anyway.

Where you to remove the current personal allowance of £10,000 (worth £2,000 to a basic rate tax payer) with a credit of £7,000, then obviously income tax rates would have to rise to recover that extra £5,000. £5k extra for every taxpayer in the country. You do the math.:)

Generali

onlyroz wrote: »

Under the current system if you earn £30k a year you end up with a take-home pay of £23355 after tax and NI.

Let's imagine a new system where you are paid £7k and then you are taxed at 28% income tax and 12% NI on everything else. On a £30k income you would then end up with £25k (i.e. £7k + £30k - 0.28*£30k - 0.12*£30k).

Doesn't sound too bad to me.

So where does the extra 2 grand come from?

Let me guess. Does someone else pay it? Rich people perhaps/the 1%?

onlyroz

antrobus wrote: »

My bad. I of course should have said that it would mean an extra 8% on basic rate. Which would of course be levied on top of, not the current basic rate, but the increased basic rate that would have applied anyway.

Where you to remove the current personal allowance of £10,000 (worth £2,000 to a basic rate tax payer) with a credit of £7,000, then obviously income tax rates would have to rise to recover that extra £5,000. £5k extra for every taxpayer in the country. You do the math.:)

I don't think it would be as much as an extra £5k each if you removed the administration costs associated with the current benefit system.

onlyroz

Generali wrote: »

So where does the extra 2 grand come from?

Let me guess. Does someone else pay it? Rich people perhaps/the 1%?

Again, how much does it cost to administrate the current benefits system?

Generali

onlyroz wrote: »

Again, how much does it cost to administrate the current benefits system?

I have no idea. Probably less than £2,000 a head for 60,000,000 people.

Plus of course you'll need a huge infrastructure in place to prevent people double and triple claiming.

chewmylegoff

Generali wrote: »

I have no idea. Probably less than £2,000 a head for 60,000,000 people.

Plus of course you'll need a huge infrastructure in place to prevent people double and triple claiming.

DWP's admin costs were £5.8 billion in 2012 according to this:

https://www.whatdotheyknow.com/request/what_percentage_of_the_dwps_budg

Of course HMRC also have costs to administer tax credits and not all of the DWP's admin costs relate to the payment of benefits so this is not the total picture but it seems unlikely that the cost of administering a citizen's income will be inconsequential either - presumably there would be some eligibility process (like errr you have to be a citizen) and therefore it would need a sprawling IT system and a load of staff to administer it and ensure fraud was combatted.