Download - Guaranteed Income Final
BY CHANDRA PASMA,CITIZENS FOR PUBLIC JUSTICE
Income Security for All Canadians
Guaranteed Income
Money given by government to citizens…to ensure that everyone has an income
adequate for meeting basic needs…without condition…rather than other government programs
such as welfare
Guaranteed Income
Also known as: Guaranteed annual income Guaranteed adequate income Guaranteed livable income/livable income Basic income/basic income grant/basic income
guarantee Citizen’s income Social/natural resources dividend Refundable family tax credit
Guaranteed Income
Negative Income Tax Administered through the tax system 3 key elements:
Benefit: the maximum amount that any person (or economic unit) can receive
Reduction rate: the amount by which the benefit is reduced for additional income
Break-even level: the income level at which the reduction rate is 100%
Guaranteed Income
Guaranteed Income
Appraisal: Targeted – only those below a certain income level
receive the benefit Lower cost Supposed “work incentive” – 100% of the benefit is
not clawed back for additional income Universal access, rather than universal benefit Is it easier to attack a benefit that is only going to
those in low income?
Guaranteed Income
Universal Demogrant Basic income A fixed amount is paid to every citizen (and permanent
resident) regularly, regardless of income, work or family structure
Payment is non-taxable, but tax on other income is increased Higher income citizens essentially pay the grant back
through taxes Flat tax vs. progressive tax
Guaranteed Income
Example: $15,000 per adult and oldest child in a single-parent
family Plus $7,000 per child With basic income tax rate increased from 15% to
18.5% for the first bracket of taxable income – and so on.
Guaranteed Income
Appraisal: No stigma, because everyone receives the same
benefit Greater social cohesion Easier to access the benefit Harder to cut the benefit rate because it’s not
targeted to low income people Cheaper administration Greater overall cost of the program
Guaranteed Income
Key questions: Conditional?
Targeted to low income earners Activity – a “participation condition”? Certain age groups could be excluded Non-citizens Institutionalized and incarcerated persons
Benefit level and tax rate Benefit level below the poverty line could increase poverty Cumulative tax rates could negate the impact Benefit levels and “work disincentive” Individual vs. family benefits
Guaranteed Income
Funding? Higher tax rates Special taxes – natural resources, consumption, wealth,
capital transfers, information transfers, electronic transactions, ecotax, or Tobin tax
Collapse of existing social programs What additional social programs are maintained?
Employment Insurance Child care Various tax credits and benefits, including CCTB OAS and GIS
Guaranteed Income
Jurisdictional issues Welfare versus assistance Who pays? If it is a federal program, is there a provincial
component?
Guaranteed Income
Arguments in favour: Economic arguments Social arguments Environmental arguments
Support from political right and leftBut also opposition from political right and
left