There's a lot to like about a guaranteed annual income. Or, at least, there would be if it were feasible and affordable. I don't think it can be both.This sounds both reasonable and devastating, right? The claim is based on an "impossible trinity", which is that you can only pick two of:
* low phaseout rateFrom which, just as the man said: a UBI can't be both feasible and affordable. Don't bother yourself with defining these terms: just focus on the fact they sound like clear & reasonable hurdles: you either pass or fail. Much the same story is told by Jim Rose in his Taxpayers Union report, the Herald and Liam Hehir who deserves special mention for arguing we shouldn't even talk about it: the whole thing is impossible madness.
* Big basic benefit
* same cost as current system.
These are brave attempts to shut down the debate: strangle the whole idea at birth while demonising those with the temerity to suggest it. If that was your goal, you'd make your strawperson as extreme and narrow as possible.
So let's review the approach of Eric and his mates. At present, some people are net taxpayers and some are net recipients of welfare. Line up all these people in order from the person with the biggest net tax bill on the left of the following diagram, through to the largest net recipient of welfare at the right end.
Here are a few things they're missing.
- A more modest UBI might in fact take a lot of people out of the poverty trap created by targeting multiple welfare payments all of which abate as you earn extra income. Not the people at the far right of the diagram, but some.
- The government would save money by not paying people to monitor, grill, and generally hassle these citizens.
- Contrary to Eric's view, NZ's tax code does in fact have "have free lunches baked into it" and removing these would add to government revenue. The two most obvious opportunities are clawing back some of the Apple/Google/Facebook/... avoidance and taxing capital tied up in residential property.