Honestly everything I have read and researched shows that direct payment of money to citizens doesn’t accomplish much if anything. That money gets sucked up instantly in higher prices and lower wages as the rent seekers vacuum it all up. If you simply provide the citizens the goods and services they would be buying with that money that actually provides a downward pressure on prices and acts to counter market forces. For example if you provide free housing for people that drives down rents, if you give people rent subsidies that drives rent prices up.
Can you give some sources. A have been interested in UBI and other basic income schemes for quite some time; I haven’t read much that is negative; there are a lot of positives and some neutrals. The mental health benefits are generally staggeringly good!
The Finnish Experiment key point: “The results also call into question the punitive workfare policies based on the deterrent effect of unemployment services.”
Stockton, USA found that having sure income increased wellbeing and increased employment.
Give directly, Kenya this is really awesome; the life changing effects on the whole community is great.
Housing First whilst not UBI; housing first is similar. It tackles similar problems and and gives housing to homeless in an unconditional manner.
Whilst there hasn’t been a country wide application of UBI or similar; the benefits are generally well recognized. What remains in question is how to fund it sustainably and to remove the idea (some in the community have) that people need to be punished into working.
I have for a long time been a fan of replacing benefits with a UBI. The idea is that everyone is about as well off as they were before (not a cash injection, you adjust tax rates to balance it out), but they don’t have to do the stupid things WINZ make them do.
This way you save money by downsizing WINZ, you provide a smaller core team that can support the people who want to be there. This gives people the dignity that Qiulae is talking about, without the cash injection that would get hoovered up like you’re talking about.
You could, over time, reduce the age of eligibility to age 0 or even earlier (paid to the parents) to make one system that supports families as well.
Obviously the devil is in the detail, but I think this TOP (or rather Opportunity) plan has some basis in reality so long as there is a multi-pronged approach.
You could raise the lowest tax rate, that would be a good thing but it would only effect the people who already pay taxes. Better thing would be to eliminate the GST which would benefit everybody who buys anything. You can pay for it by adding some tiers to the tax system on top.
UBI is a cash injection whether you call it that or not. As I said you could achieve similar outcomes by giving people the essentials for free at least up to some threshold. The government could set up a public utility to provide electricity, bandwidth, water, etc and could provide the first X units for free and charge for the rest at market rates or just provide them at cost plus basis. This would force private companies to compete and lower prices for everybody. Similar things can be done for food or rent.
I can even envision a scenario where the government builds facilities like dormitories where you get a room, a bed, a desk and a shared bathroom. You cram these into buildings and offer them as public housing. People living there don’t pay for electricity or water or sewer or anything. Minimal and basic but free. As you build more you lower the eligibility requirements until one day every citizen can live in a tiny dorm room for free if they want.
Whilst removing GST seems like a good idea on the surface; it does serve some purposes which are not easily replaced.
It captures a bunch of revenue from tourists that otherwise would be harder to capture; tourists see the price and don’t think about the tax that they are contributing to the NZ economy. So tourists in Queenstown are helping to pay for hospitals in Auckland.
It captures some of the proceeds of crime; I know we want to reduce crime as much as possible; it is a fact of life, the GST helps to get some of that money back. It is a bad bargain but is better than nothing.
Adding carve outs in the GST scheme for fresh fruit etc, is a bad idea. In NZ the effective GST rate (15% - admin costs of the system) is something like 14.8% I couldn’t find the article that was from, I read it a few years ago. Compare that to the effective VAT in the UK, which is around 16% when they pay 20% in VAT on most stuff.
There are better ways to capture tourist dollars than GST though. Same goes for proceeds of crime (which isn’t that important because it’s such a tiny portion of the economy).
You can charge more for visas, you can have airport taxes, you can levy a fee on museums, huts, trails and such, you can place taxes on tour operators and guides etc.
Honestly everything I have read and researched shows that direct payment of money to citizens doesn’t accomplish much if anything. That money gets sucked up instantly in higher prices and lower wages as the rent seekers vacuum it all up. If you simply provide the citizens the goods and services they would be buying with that money that actually provides a downward pressure on prices and acts to counter market forces. For example if you provide free housing for people that drives down rents, if you give people rent subsidies that drives rent prices up.
Can you give some sources. A have been interested in UBI and other basic income schemes for quite some time; I haven’t read much that is negative; there are a lot of positives and some neutrals. The mental health benefits are generally staggeringly good!
Whilst there hasn’t been a country wide application of UBI or similar; the benefits are generally well recognized. What remains in question is how to fund it sustainably and to remove the idea (some in the community have) that people need to be punished into working.
I have for a long time been a fan of replacing benefits with a UBI. The idea is that everyone is about as well off as they were before (not a cash injection, you adjust tax rates to balance it out), but they don’t have to do the stupid things WINZ make them do.
This way you save money by downsizing WINZ, you provide a smaller core team that can support the people who want to be there. This gives people the dignity that Qiulae is talking about, without the cash injection that would get hoovered up like you’re talking about.
You could, over time, reduce the age of eligibility to age 0 or even earlier (paid to the parents) to make one system that supports families as well.
Obviously the devil is in the detail, but I think this TOP (or rather Opportunity) plan has some basis in reality so long as there is a multi-pronged approach.
You could raise the lowest tax rate, that would be a good thing but it would only effect the people who already pay taxes. Better thing would be to eliminate the GST which would benefit everybody who buys anything. You can pay for it by adding some tiers to the tax system on top.
UBI is a cash injection whether you call it that or not. As I said you could achieve similar outcomes by giving people the essentials for free at least up to some threshold. The government could set up a public utility to provide electricity, bandwidth, water, etc and could provide the first X units for free and charge for the rest at market rates or just provide them at cost plus basis. This would force private companies to compete and lower prices for everybody. Similar things can be done for food or rent.
I can even envision a scenario where the government builds facilities like dormitories where you get a room, a bed, a desk and a shared bathroom. You cram these into buildings and offer them as public housing. People living there don’t pay for electricity or water or sewer or anything. Minimal and basic but free. As you build more you lower the eligibility requirements until one day every citizen can live in a tiny dorm room for free if they want.
Whilst removing GST seems like a good idea on the surface; it does serve some purposes which are not easily replaced.
It captures a bunch of revenue from tourists that otherwise would be harder to capture; tourists see the price and don’t think about the tax that they are contributing to the NZ economy. So tourists in Queenstown are helping to pay for hospitals in Auckland.
It captures some of the proceeds of crime; I know we want to reduce crime as much as possible; it is a fact of life, the GST helps to get some of that money back. It is a bad bargain but is better than nothing.
Adding carve outs in the GST scheme for fresh fruit etc, is a bad idea. In NZ the effective GST rate (15% - admin costs of the system) is something like 14.8% I couldn’t find the article that was from, I read it a few years ago. Compare that to the effective VAT in the UK, which is around 16% when they pay 20% in VAT on most stuff.
There are better ways to capture tourist dollars than GST though. Same goes for proceeds of crime (which isn’t that important because it’s such a tiny portion of the economy).
You can’t let perfect be the enemy of the good.
What ways are effective for capturing tourist dollars?
I agree that GST is a regressive tax that overly targets the lower income earners. But it does serve a purpose
You can charge more for visas, you can have airport taxes, you can levy a fee on museums, huts, trails and such, you can place taxes on tour operators and guides etc.
There are lots of options.