So yesterday I posted this on Mumsnet
Scrap Benefits and pay every adult, working, non working or retired, an unconditional basic income of £15,000 a year? Discuss
What a Kerfuffle I seem to have started (!)
So many responses, both critical and positive, and I’m trying my best to respond to all of them, but the 2 main critisisms that seem to be repeatedly posted are
2. Giving People an Unconditional Basic Income would cause Rampant Inflation
Here are my responses to these Critisisms
1. VAT is a tax that is charged on the “Sales Price” of a limited amount of products. If you are not VAT registered, then you cannot reclaim the VAT you pay on any product that you buy. Therefore the VAT you pay on that product you buy (i.e the SALE that has been made) is collected as TAX. Therefore VAT is a SALES TAX.
The reason VAT has been mentioned is that someone suggested that collecting tax on all sales would make the money eventually disappear out of the system. ie pay £5 for something, £1 goes in tax, leaving £4 to the seller. The seller then spends £4 on something, £0.80 goes in tax, leaving the new seller with £3.20. After 2 transactions, £5 has diminished to £3.20 because £1.80 has been taken by the tax man.
However, this is how VAT already works at the moment, and the money does not dissapear, so why would it with a full sales tax?
Also, under my proposal, the money collected by the Sales Tax, is put back into peoples pockets as Basic Income, giving them new money to spend, to replace the money being taken out of the system, by the tax man.
2. “Quantative Easing”, which is printing money from thin air and putting it into the system, has not caused Rampant Inflation. “Bailing Out The Banks” which is also printing money from thin air and putting it into the system, has not caused Rampant Inflation.
So far both these measures have “Cost” £350 Billion. Paying every adult an Unconditional Basic Income of £15,000 would “Cost” £750 Billion. Ok this is double as much, but hardly a Rampant Increase.
Also, someone said, Landlords and Utility companies would know people had this income and would increase their prices to get this money off people.
The national average wage i £26,000. The Basic Income I am proposing is only £15,000. Its way less than the national average as it already exists. Why arent they already increasing prices to get our £26,000 off us?
Finally, the Unconditional Basic Income is Index Linked to Inflation. Free Market Equilibrium would prevail eventually anyway.
Feel free to comment below, or go to this Mumsnet Thread and contribute from there.
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