Universal Basic Income
Gary Williams (Otaki), 4 April 1998
I think we will not make much progress with UBI while people believe that it requires a tax increase that draws off real economic resources from other government activities.
To me it is vital that we distinguish between a tax take (or increase) for real government expenditure - such as on health and education - and a tax take (or increase) that is recycled as with the UBI. If we can't do this, then we are in deep trouble.
There are of course, many mechanisms that can be used, and a wide range of possible variations in levels of payments etc. Adjusting the income tax rates is just one, but under the present arrangement of taxes is the simplest, and easiest to implement.
I personally prefer a shift in the tax base towards asset and resource based taxes.
Whatever the tax mechanism used, I think we have to resist the pressure (generated from the present fashionable regime of low levels of government activity and hence low and declining taxes) of fudging the tax adjustment issue. It being an adjustment in the taxation system to alter the way income is derived, not an increase in taxation - for real government expenditure.
To emphasise this important point, I believe it is very useful in any presentation of UBI to show examples of the effects on a range of people in different circumstances, and not just concentrate on the lower end benefit replacement questions.
Thus in my 1986 presentation to the Income Maintenance Task Force, I gave examples of the current and proposed position for a range of family and income circumstances, as well as a comparison with benefit levels.