Thu, 13 Aug 2020

Universal Basic Income: Who Pays for It

Pressenza
01 Jul 2020, 16:27 GMT+10

Every time that someone suggests a social measure which requires an expenditure, neoliberals and fearful people immediately show up stating that " there is no money". This seems to be our society's main problem: the shortage of money. But where exactly is it missing? Undoubtedly there are people who barely survive with their own means or maybe cannot even make it, but it is also true that in some social areas there is a surplus of money and we mean what we say: it is really too much.

Actually, the question of financing the UBI is merely technical. What matters is to reach an agreement to launch this measure, then it will be much easier to decide how to fund it. However, as we are living in an economic dictatorship, we cannot ignore something that worries part of the population: who pays for the UBI?

Over the last 12 years, since the last global financial crisis erupted, on the one hand public services have been cut in many countries, particularly in the richest ones, hitting the most disadvantaged levels of our societies; on the other hand the number of millionaires has increased in inverse proportion. None of that has happened by accident, on the contrary, it's the direct consequence of the measures taken in this regard. But that's another story. Currently, despite the system's crisis, it's still a fact that there are more and more rich people in the world, because poor people are always the most affected.

That's why it appears to be reasonable, practicable and fair to get part of this money from the privileged class to finance the UBI, allowing the vast majority of people to benefit from it. Economists who made the proposal of UBI have already thoroughly explained how it will be funded, so I leave it to them about the real question. Anyway, all the different proposals converge on a redistribution of wealth through tax collection.

In other words, it would be a matter of increasing taxes on those earning more and redistributing this extra income to the majority of the population through the UBI. According to such proposals, around 10% of the wealthy people would lose part of their profit, while the 80% with less income would benefit from it. The status of the class with the highest income, which accounts for 10-20% of the population, would roughly remain unchanged (they would pay more taxes but that would be offset by the UBI income which, it's good to remember, is applied to everyone).

The UBI, besides being sustained by tax increasing, would also gain from the cuts of other social benefits like the administrative expenditure for financial allowances, that would be replaced with other provisions. In the end, the countries could review their priorities, for example diverting the funds assigned to militarization to finance the UBI.

Money is the result of the society's work and the UBI aims to share it in line with this historical truth. It is time for UBI. This article, like similar ones, aims to briefly explain the different sides of the UBI. To consult the entire series of papers on the same topic, click here

Translation from Spanish by Emanuele Di Donato .

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