Auggie wrote on Dec 27
th, 2019 at 5:33pm:
So, based on your numbers, it's pretty much on par in terms of cost, with the UBI costing slightly more. However, much of this money would be spent back into the economy, so in this regard it would pay for itself in GDP terms.
They will lose out on other benefits, but the idea is based on the libertarian principle of personal responsibility without having people and children starve to death.
The main benefit of UBI is that it's unconditional - there's no need to apply to Centrelink and report your income, or be under the worry that you may lose your payment. It's guaranteed and it's unconditional.
I'd prefer a Negative Income Tax (NIT) over a UBI if we were to eliminate all welfare. An example of such a scheme would be a Tax Free Threshold (TFT) of $50,000 and a tax rate of 40%. Under a NIT, for those who earn under the TFT you'd receive the tax rate multiplied by the difference between the TFT minus what you earned. In layman terms:
If you earned $0, you'd receive $20,000.
If you earned $20,000, you'd received $12,000 on top of what you earned.
If you earned $40,000, you'd received $4,000 on top of what you earned.
Any amount earned over $50,000 would be taxed at 40%. However, receiving any amount through an NIT relies on lodging a tax return. While you could manage when people receive their NIT, it can get complicated if earning some level of income one year then nothing the next. For example, if for Year 0 you lodged a return and earned $0 for Year 0, you'd received $20,000 for Year 1. If you earned $20,000 during Year 1 and state this on your return, you'd receive $12,000 for Year 2. However, if you lost your source of income shortly after lodging your return, and couldn't find another source of income for Year 2, you'd only have the $12,000 to live on.
Possibly the simplest solution would be to tax any amount of income earned at 40%. In the example above, you'd receive the $20,000 you earned minus 40%, or $8,000. Once you lodged your tax return, you'd receive $12,000 plus the $8,000 held as tax as you earned less than $50,000. Therefore, if you did lose your source of income you'd at least be receiving $20,000 for the year.