You remove the marginal disincentive to work at the low income end. This is good.
However you add a large incentive to give up work at the higher end.
As an example, I own a house in london. I'm by no means rich but I have a fairly decent income and significant savings. Enough that if I downsized my house and lived frugally I could support myself for 10-15 years.
That's not enough to retire on. If I was to receive £4-5 free income a year though, it would make enough different that my saving would last 20 years or more and I'd be able to give up work now.
There might be a relative small number of people in my situation, but together we probably pay a great deal of tax that would be lost.
There might be a relative small number of people in my situation, but together we probably pay a great deal of tax that would be lost.
You've made a basic error in your assumptions - you're assuming that when you quit your job ceases to exist. It doesn't. Someone else would do it instead, being paid what you're paid, and paying the tax that you pay. So long as the number of people leaving the workforce to live on their basic income + savings is smaller than the number of currently unemployed people then the tax receipts wouldn't change. In fact, with the consequent savings on employment benefit, the amount of tax to spend on services would go up.
so it'll increase the efficiency of the workforce, instead of people just doing ANY job to survive they can take a short break while they look for what they really want to do in life.
You could pursue a hobby creating computer games, and when your game is ready you can they make profit and start paying back to society.
The work/welfare system stifles innovation, people with skills end up doing work they hate, those who wanted that job have to get a job they don't want and the unemployable take advantage of the system to watch TV all day.
You're assuming that the pool of unemployed workers would have the same skills and abilities as the early retirees, many of whom would be in the most productive phases of their careers. There may not be anyone who can fill the job and justify the same pay. If unemployment rates decrease the availability of skills drops off.
I'm not suggesting that unemployed people do the jobs of the people who leave the workforce - just that someone does it, and someone moves job to do their job, and so on, until eventually an unemployed person gets a job. There might be people who are really hard to replace, but they're so unusual that they're not really worth considering when you're talking about national policy.
No one could reasonably suggest that a nation should base their welfare policy ideas on whether or not a few thousand people will be hard to replace if they retire.
No one could reasonably suggest that only a few thousand people would opt to retire early if every adult had an automatic right to a sum in the region of the present basic state pension.[1]
There's nothing particularly unusual about the OP's circumstances, and they made a good point in that a BI would be particularly attractive to asset-rich people who had paid off their mortgages even whilst poor BI recipients struggled to pay rent without their housing benefit
[1]a touch under £6k per year in the UK, which is certainly in the ballpark of BI proposals, as well as probably not enough to replace other subsidies in may parts of the country.
No one could reasonably suggest that only a few thousand people would opt to retire early if every adult had an automatic right to a sum in the region of the present basic state pension.
Suggesting that people will decide not to work if you give them £6k a year is a ridiculous strawman.
The basic income (and the pension for that matter) aren't high enough to buy any significant assets. There's an assumption with a pension that you've already bought a home, you're not going to invest in a new car, that you're unlikely to want the latest expensive gadgets (I'm not arguing that the assumption is right, just that it's there). With a basic income being the equivalent the only people who'd use it to 'opt out' of the workforce are those who already have the assets they want and have decided they won't ever want new or better ones (a vanishingly small number who could probably opt out of the workforce now if they wanted to) and people who have decided they don't want those assets in the first place (a much larger number, but still very small in the grand scheme of things).
Every single person who has £6k x years-they're-likely-to-live could opt out of the workforce right now by your reckoning. It just doesn't happen. There's no reason to believe it would suddenly become popular if a basic income were enacted.
> Suggesting that people will decide not to work if you give them £6k a year is a ridiculous straw man.
Around 1.2 million people over the pensionable age live on only the state pension (and that has other qualification requirements). That's a little more than the number of people over 60 actually in work.
Sure, 40 year olds typically have a little more energy than 70 year olds and quite probably a few years of mortgage payments left, but I still think you can safely add more than a few thousand early [semi]retirees if you open it up to everyone and remove all qualification requirements.
Would you like to live frugally for those 20 years though? One could assume that you'd get bored of doing absolutely nothing after a while, so you'd end up working anyway, even if just to raise your living standards. People generally hate boredom. You may even be more willing to start your own venture since you're not risking extreme poverty if it doesn't pan out.
Definitely. I'm not arguing with that. But there's a difference between going frugal because you have to, and because you want to. BI is about getting rid of the first while maintaining the second.
I'm assuming you meant "£4k-5k" there - and if you own property in London, you're almost certainly getting more than that in asset price appreciation. You could probably live the rest of your life on equity withdrawal schemes.
However you add a large incentive to give up work at the higher end.
As an example, I own a house in london. I'm by no means rich but I have a fairly decent income and significant savings. Enough that if I downsized my house and lived frugally I could support myself for 10-15 years.
That's not enough to retire on. If I was to receive £4-5 free income a year though, it would make enough different that my saving would last 20 years or more and I'd be able to give up work now.
There might be a relative small number of people in my situation, but together we probably pay a great deal of tax that would be lost.
I think it is this that dooms any such scheme.