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Home > Guaranteed minimum income

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. A common way of paying for this system is through a negative income tax where a government flat income 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.

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.

The system has many opponents as well, however. They raise a number of objections:

• The most common of these objections is the so called Malibu surfer problem, where a certain section of the population would certainly 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.

Many other countries have political parties that advocate such a system, such as the Canadian Action PartyCanadian Action Party Current Leader Connie Fogal Founded 1997 Headquarters 99 Atlantic AvenueSuite 302 Toronto, OntarioM6K 3J8 Colours Blue Red Political ideology social democrat The Canadian Action Party is a Social Democrat Canadian federal political p and the New Zealand Democratic PartyCurrent Democratic Party logo This article is about the modern party based around the social credit theory. It should not be confused with the pro-business Democrat Party founded in 1934. The New Zealand Democratic Party is a small leftist political party.

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 ( InnsbruckThe Leopold-Franzens-Universitat more often simply called University of Innsbruck is one of the major Austrian universities, offering a broad range of subjects. Since 2004, its former medical faculty forms an independent university, the Innsbruck Medical) and Hans A. PestalozziPestalozzi ( 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 auth. 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.

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.

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