Definitions

progressive income taxes

Guaranteed minimum income

Guaranteed minimum income (GMI) is a proposed system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by citizenship, a means test and either availability for the labour market or a willingness to perform community services. The primary goal of a guaranteed minimum income is to combat poverty. If citizenship is the only requirement, the system turns into a basic income guarantee.

Elements

A system of guaranteed minimum income can consist of several elements, most notably:

Basic income

A basic income is granted independent of other income (including salaries) and wealth, with no other requirement than citizenship. This is a special case of GMI, based on additional ideologies and/or goals. While most modern countries have some form of guaranteed minimum income, a basic income is rare.

A basic income is a proposed system of social security, that periodically provides each citizen with a sum of money that is sufficient to live on. Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test; the richest as well as the poorest citizens would receive it.

A basic income is often proposed in the form of a citizen's dividend (a [transfer]) or a negative income tax (a guarantee). A basic income less than the social minimum is referred to as a partial basic income. A worldwide basic income, typically including income redistribution between nations, is known as a global basic income.

One of the arguments for an basic income was articulated by French Economist and Philosopher André Gorz: "The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet- unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...

From the point where it takes only 1,000 hours per year or 20,000 to 30,000 hours per lifetime to create an amount of wealth equal to or greater than the amount we create at the present time in 1,600 hours per year or 40,000 to 50,000 hours in a working life, we must all be able to obtain a real income equal to or higher than our current salaries in exchange for a greatly reduced quantity of work...

Neither is it true any longer that the more each individual works, the better off everyone will be. The present crisis has stimulated technological change of an unprecedented scale and speed: `the micro-chip revolution'. The object and indeed the effect of this revolution has been to make rapidly increasing savings in labour, in the industrial, administrative and service sectors. Increasing production is secured in these sectors by decreasing amounts of labour. As a result, the social process of production no longer needs everyone to work in it on a full-time basis. The work ethic ceases to be viable in such a situation and workbased society is thrown into crisis" Andre Gorz,Critique of economic Reason,Gallile´,1989

The Basic Income Earth Network (BIEN) describes one of the benefits of a basic income as having a lower overall cost than that of the current means-tested social welfare benefits.However critics have pointed out the potential work disincentives created by such a program, and have cast doubts over its implementability,se: Interview with Philippe van Parijs.In later years, Basic Income Studies:How it could be organised, Different Sugesstions,have made a lot fully financed proposals.

Examples of implementation The U.S. State of Alaska has a system which provides each citizen with a share of the state's oil revenues.The USA also have the Earned Income Tax Credit for low-income taxpayers. In 2006 a bill, written by members of the advocacy organization USBIG, to transform the credit into a partial basic income, was introduced in the US congress, but did not get passed.

In 2008, a pilot project with a basic income grant was started in the Namibian village of Otjivero.The city of Dauphin, Manitoba, Canada had an experimental basic income program ("Mincome") in the 1970s.

In Belgium, winners of the game Win for Life of the national lottery are awarded with a monthly basic income of EUR 1,000.Winners of a similar lottery in Virginia receive USD 1,000 on a weekly basis.

Methods of implementation One proposed method of offsetting the cost to the Treasury of this tax expenditure lies in its coupling with a flat tax, a type of federal income tax in which all taxpayers are subject to a single tax rate. 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.

Advocates

In his final book Where Do We Go From Here: Chaos or Community? (1967) Martin Luther King Jr. wrote

In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.

In 1987, New Zealand's Labour Finance Minister Roger Douglas announced a Guaranteed Minimum Family Income Scheme to accompany a new flat tax. Both were squashed by then Prime Minister David Lange, who sacked Douglas.

Modern advocates include Hans-Werner Sinn (Germany) and Ayşe Buğra (Turkey).

Funding

Many different sources of funding have been suggested for a guaranteed minimum income:

See also

References

External links

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