Universal Basic Income - tailored to the capabilities of each nation
To create an equitable institutional environment, the proposal of a realistic universal basic income is laid out in the below document.
The General Assembly of Atlas proposes:
The implementation of a universal basic income (UBI) scheme in each country, according to the socio-economic capabilities of the implementing nation.
- The source for this will be nation-specific and may include the removal of other social safety nets and general tax reform, including the benefits system and other taxations (VAT, carbon tax, land value tax, etc.)
The level of this implementation is country-specific. We advocate for more universal cash assistance, even if it starts small. This includes:
- Introduction in a stage-by-stage trajectory depending on the age group
- The minimum level of this implementation is expanding existing child benefits to young adults
- The maximum level of this implementation is a universal basic income for each resident, regardless of age.
Context - Why? Current State?
The decline in poverty has slowed down and reversed due to COVID-19. There are still over 680 million people living in extreme poverty today, mostly in Sub-Saharan Africa. Back in 2013, only 13% of those with jobs felt engaged with them - a costly situation. Various complex social safety net initiatives are implemented across the world with a multitude of agencies and administrative burdens, which disproportionally affects low-income households. Additionally, there is mounting research on the benefits of swapping conditional child care benefits with unconditional child allowances (in a budget-neutral way), which include greater poverty reduction, better educational outcomes, and a lengthened life expectancy.
Goal - How should it be? Ideal State?
The state has the responsibility to increase the well-being, not only economic prosperity, of its citizens. While these two are correlated to a large extent, the stagnating growth in high-income countries and the lack of “catching up” growth in low-income countries call for new solutions. The government has the power to design economic incentives to influence the behavior of its citizen and should use them to increase the well-being of every member of society. One root of equality
of opportunity is to start at a similar socio-economic base. While realistic UBI will not be enough to reach that goal, it provides the framework for giving people a more equitable starting point in life.
Pathway - How do we get there? Path to the Ideal State?
During the campaigning experience of Atlas in the EU and worldwide, a few questions reappear consistently and are addressed here.
Where does the money come from?
- A: Depending on the level of UBI, different sources of funding need to be used. The most feasible are (non-exhaustive) land value taxes, value-added taxes (VAT), carbon taxes, and fiscal gains received from banning fossil fuel subsidies. Should a high level of UBI be targeted, general tax reform and a reform of the benefits system is necessary.
Does the implementation of UBI scrap all other social net provisions?
- A: This depends on the target group. A truly universal UBI would include kids and generally leave families with children better off, which makes existing child benefits redundant. Other small, marginalized groups (people with disabilities, etc.) need additional support to stand on equitable grounds.
Does UBI mean higher taxation on low/middle-income households?
- A: UBI will not be financed by a tax on income, and many low and middle-income households would face lower marginal tax rates than they do today since they wouldn't lose their benefits as they earn more.
Following the above, the design of this system around major points needs to be adapted to that national context.
The pathway to get to such a solution will and should be a nation-specific one - according to the country's culture and needs. Systemically, the following procedure is suggested:
- Assignment to existing tax or benefits agencies that area already well-suited for this (distribution agencies for pension or child benefit) or establishment of a new governmental agency
- Assessment of Economic Viability of various scenarios (removal of social safety net, taxation of other income yes/no, estimation of living costs above the poverty line etc.)
- Pilot phasing of UBI in a non-trivial region on a longer-term basis to estimate the real effects of UBI
- Stakeholder Consultation with the public and companies on working hours, market demand, and competitiveness
- Rolling out realistic universal basic income across the country