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Encyclopedia > Basic Income Guarantee

A guaranteed minimum income is a proposed system of income redistribution that would give each citizen a certain sum of money independent of whether they work or not. It is sometimes known as a "Basic income Guarantee (BIG)", "universal basic income", "citizen's income scheme", or just a basic income (the term "guaranteed annual income" is often used in the United States), but these systems also often include a method of paying for the income as well. Income redistribution or redistribution of wealth is a political policy usually promoted by members of the political left, and opposed by members of the political right. ...


The system would be a government administered one that would allot every citizen a sum of money large enough to live on. A common amount proposed is 20% of per capita GDP. The wealthiest as well as the poorest citizens would receive this. Salaries from employment would be a supplement to this government income. An often proposed way of paying for this system is through a negative income tax where a government flat tax would be charged to all citizens. The current model of progressive income taxes used throughout the western world could be eliminated, but the system would still be progressive, since those at the lower end of the wage scale would pay less in taxes than they would receive in guaranteed income. For the most wealthy members of society the few thousand dollars of the guaranteed income would only make a small dent in the taxes they have to pay. In economics, a negative income tax (abbreviated NIT) is a method of tax reform that is popular among economists but has never been fully implemented. ... A flat tax, also called a proportional tax, is a system that taxes all entities in a class (typically either citizens or corporations) at the same rate (as a proportion on income), as opposed to a graduated, or progressive, scheme. ... A progressive tax, or graduated tax, is a tax that is larger as a percentage of income for those with larger incomes. ...


Proponents of a guaranteed minimum income argue that the system has a number of advantages:

  • It would simplify the welfare state. The introduction of a guaranteed minimum income could also see the elimination of traditional welfare, the minimum wage, much of unemployment insurance, government pensions, and benefits for the disabled and ill. This would eliminate large amounts of government bureaucracy. It could also see the elimination of the progressive income tax with no adverse effects on the poor, as explained above.
  • It would prevent any citizen from falling into abject poverty. With a guaranteed minimum income, starvation and homelessness would be all but eliminated.
  • It would cure some of the major problems of the modern welfare state such as the welfare trap, that is assumed to discourage people from working.
  • It would give enough money for every citizen to be able to receive a good education and proper healthcare.
  • It would give each citizen the freedom to select jobs that are more pleasant (assuming they are available), thus potentially eliminating unpleasant tasks that the economy would thus be forced to automate.
  • It would allow citizens to do work that is productive but cannot provide income, such as caring for children or the elderly within one's own family, or providing public goods.
  • It would place no ceiling on income (thus preserving incentive) but would create a solid income floor below which no one could fall.

The system has many opponents as well, however. They raise a number of objections: There are three main interpretations of the idea of a welfare state: the provision of welfare services by the state. ... Welfare has four main meanings. ... The minimum wage is the minimum rate a worker can legally be paid (usually per hour) as opposed to wages that are determined by the forces of supply and demand in a free market. ... Unemployment benefits are sums of money given to the unemployed by the government or a compulsory para-governmental insurance system. ... The examples and perspective in this article may not represent a worldwide view. ... The term disability, as it is applied to humans, refers to any condition that impedes the completion of daily tasks using traditional methods. ... The welfare trap is a name for the phenomenon by which taxation and welfare systems jointly contribute to keep people on social insurance. ...

  • The most common of these objections is the so called Malibu surfer problem, where a certain unambitious section of the population would presumably elect not to work at all.
  • It involves a transfer of resources from the rich to the poor, which critics find objectionable as a matter of principle.
  • It would increase wages dramatically for the very large category of workers who are doing unpleasant, menial but essential jobs, thus potentially damaging the economy.
  • It would cost a large amount of money, which would necessitate raising taxes.

No country in the world has ever implemented a full guaranteed minimum income system. Portugal is by far the closest, with a guaranteed minimum income a legally enshrined right for the entire population since 1997. However, the amount guaranteed is well below the poverty line and other programs such as the minimum wage are thus still in place. The system also forces participants to attend social integration sessions. In political theory, the Malibu surfer problem is the prospect of an individual who can work but chooses not to do so, and instead leads a life of self-indulgence funded through some other means. ... 1997 (MCMXCVII) is a common year starting on Wednesday of the Gregorian calendar. ...


Brazil has also just recently announced a limited system that will apply to the poorest members of society. Some European countries have reoriented their taxation systems to more closely reflect a guaranteed minimum income system, including Belgium, the Netherlands and the United Kingdom.


The U.S. State of Alaska has a system which guarantees each citizen a share of the state's oil revenues. For other uses, see United States (disambiguation) and US (disambiguation). ... Official language(s) English Capital Juneau Largest city Anchorage Area  - Total  - Width  - Length  - % water  - Latitude  - Longitude Ranked 1st 663,267 mi² / 1,717,854 km² 808 mi / 1,300 km 1,479 mi / 2,380 km 13. ...


The city of Dauphin, Manitoba, Canada had an experimental guaranteed annual income program in the 1970s.[1] For the rural municipality, see Dauphin, Manitoba (rural municipality) Dauphin is a city in Manitoba of approximately 8085 people. ...


Many other countries have political parties that advocate such a system, such as the Canadian Action Party, the Danish Minority Party, both the Scottish Green Party and recently the Scottish National Party, and the New Zealand Democratic Party. In 1972, members of the American Democratic Party wrote a proposal for a GMI into their official platform. However, that particular plank, along with numerous others, was removed following the landslide defeat of Senator George McGovern, the party's candidate in that year's presidential election. The Canadian Action Party (CAP) is a Canadian federal political party founded in 1997. ... The Minority Party (Minoritetspartiet) is a political party in Denmark without parliamentary representation. ... The Scottish Green Party is the Green party in Scotland, and a full member of the European Federation of Green Parties. ... In Scotland, the Scottish National Party (SNP) (Pàrtaidh Nàiseanta na h-Alba in Scottish Gaelic) is a centre-left political party which campaigns for Scottish independence. ... Current Democratic Party logo This article is about the modern party based around the social credit theory. ... 1972 (MCMLXXII) was a leap year that started on a Saturday. ... It has been suggested that Democratic presidents be merged into this article or section. ... George McGovern Dr. George Stanley McGovern (born July 19, 1922) was a United States Congressman, Senator, and Democratic presidential candidate, losing the 1972 presidential election to incumbent Richard Nixon. ... The President of the United States (fully, President of the United States of America; unofficially abbreviated POTUS) is the head of state of the United States and the chief executive of the federal government. ...


The world's most noted advocate of the guaranteed minimum income system is the Belgian economist Philippe van Parijs. Other advocates include Keith Rankin (New Zealand), Herwig Büchele (Innsbruck) and Hans A. Pestalozzi. The system is supported by both left wing and right wing thinkers, but it is more popular among leftists and socialists. Right-wing advocates generally prefer the negative income tax model. Philippe Van Parijs (born 1951) is a Belgian philosopher and political economist, mainly known as secretary of the Basic Income European Network. ... The Leopold-Franzens-Universität, more often simply called University of Innsbruck, is one of the major Austrian universities, offering a broad range of subjects. ... Hans A. Pestalozzi (1929 - July 14, 2004) was a Swiss social critic who, in the prime of life, broke free from the Establishment and started a new life explaining and criticizing late 20th century capitalism, which eventually led to his becoming a bestselling author (Nach uns die Zukunft, Auf die... The color red and particularly the red flag are traditional symbols of Socialism. ...


A negative income tax, proposed by Milton Friedman, came close to implementation in the United States under Richard Nixon. Also, the U.S. does have the GMI-inspired Earned income tax credit. The citizen's dividend is a similar concept, but the payment made to individuals is based upon the revenues that the government can collect from leasing and selling natural resources (such a dividend in fact exists in the state of Alaska). In economics, a negative income tax (abbreviated NIT) is a method of tax reform that is popular among economists but has never been fully implemented. ... Milton Friedman (born July 31, 1912) is a U.S. economist, known primarily for his work on macroeconomics and for his advocacy of laissez-faire capitalism. ... Richard Milhous Nixon (January 9, 1913 – April 22, 1994) was the 37th President of the United States, serving from 1969 to 1974. ... The United States federal earned income tax credit (EITC) is a refundable tax credit that reduces or eliminates the taxes that low-income working people pay (such as payroll taxes) and also frequently operates as a wage subsidy for low-income workers. ... Citizens dividend is a proposed state policy based upon the principle that the natural world is the common property of all persons (see Georgism). ... Official language(s) English Capital Juneau Largest city Anchorage Area  - Total  - Width  - Length  - % water  - Latitude  - Longitude Ranked 1st 663,267 mi² / 1,717,854 km² 808 mi / 1,300 km 1,479 mi / 2,380 km 13. ...


Many different sources of funding have been suggested for a guaranteed minimum income:

  • Income taxes
  • Sales taxes
  • Capital gains taxes
  • Inheritance taxes
  • Wealth taxes
  • Luxury taxes
  • Elimination of current income support programs and tax deductions
  • Repayment of the grant at death or retirement
  • Land and natural resource taxes
  • Pollution Taxes
  • Fees from government created monopolies (such as the broadcast spectrum and utilities)
  • Collective resource ownership
  • Universal stock ownership
  • A National Mutual Fund
  • Money creation
  • Tariffs, the lottery, or sin taxes

In his final book Where Do We Go From Here: Chaos or Community? (1967) Martin Luther King Jr. wrote Martin Luther King, Jr. ...

I am now convinced that the simplest approach will prove to be the most effective -- the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.

--from the chapter entitled "Where We Are Going"


See also

Guaranteed Income Supplement (GIS) provides additional money, in addition to the Old Age Security pension, to low-income seniors living in Canada. ... The Basic Income Earth Network (BIEN; until 2004 Basic Income European Network) is a network of academics and activists interested in the idea of a universal basic income, based on citizenship and not on work requirement or charity. ...

External links

  • Basic Income Earth Network (BIEN)
  • U.S. Basic Income Guarantee Network (USBIG)
    • About Basic Income
  • Global Basic Income (GBI) Foundation
  • Canadian pro-GMI advocacy site
  • New Zealand UBI paper

  Results from FactBites:
 
Guaranteed minimum income - Wikipedia, the free encyclopedia (1116 words)
It is sometimes known as a "Basic income Guarantee (BIG)", "universal basic income", "citizen's income scheme", or just a basic income (the term "guaranteed annual income" is often used in the United States), but these systems also often include a method of paying for the income as well.
The current model of progressive income taxes used throughout the western world could be eliminated, but the system would still be progressive, since those at the lower end of the wage scale would pay less in taxes than they would receive in guaranteed income.
The introduction of a guaranteed minimum income could also see the elimination of traditional welfare, the minimum wage, much of unemployment insurance, government pensions, and benefits for the disabled and ill. This would eliminate large amounts of government bureaucracy.
USBIG: What is BIG? (2794 words)
BIG is an efficient, effective, and equitable solution to poverty that promotes individual freedom and leaves the beneficial aspects of a market economy in place.
The name Basic Income Guarantee was chosen because it is similar to both “basic income” (the best-known version of BIG in Europe today) and “guaranteed income” (as the idea was known in the United States when it was seriously considered in the 1960s and 70s.
BIG would free the poor from such supervision and allow people to be responsible their own judgments.
  More results at FactBites »

 
 

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