Guaranteed minimum income

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Guaranteed minimum income is a proposed system of income redistribution that would provide eligible citizens with a certain sum of money (independent of whether they work or not), also known as "Basic Income Guarantee (BIG)", "universal basic income", "citizen's income scheme", "demogrant," or just a basic income (the term "guaranteed annual income" is often used in the United States), but these systems also often include a method of paying for the income as well.

The system would be a government administered one that would allot every citizen a sum of money large enough to live on. A common amount proposed is 20% of per capita GDP. The wealthiest as well as the poorest citizens would receive this. Salaries from employment would be a supplement to this government income. One proposed method of offsetting the cost to the Treasury of this tax expenditure lies in its coupling with a flat tax, a type of federal income tax in which all taxpayers are subject to a single tax rate. The current model of progressive income taxes used throughout the western world could be eliminated, but the system would still be progressive, since those at the lower end of the wage scale would pay less in taxes than they would receive in guaranteed income. For the most wealthy members of society the few thousand dollars of the guaranteed income would only make a small dent in the taxes they have to pay.

1 Arguments
2 Examples of implementation
3 Advocates
4 Funding
5 See also
6 External links

[edit] Arguments

The Basic Income Earth Network (BIEN) describes one of the benefits of the Guaranteed minimum income scheme as having a lower overall cost than that of the current means-tested social welfare benefits. [1] However critics have pointed out the potential work disincentives created by such a program, and have cast doubts over its implementability. [2]

[edit] Examples of implementation

Brazil has just recently announced a system designed to eventually become a fully fledged basic income guarantee for the entire population of its permanent residents. The basic income guarantee in Brazil is being slowly implemented in a series of phases. At the present initial phase, it is an income limited system that will apply to the poorest members of society.

Whilst Brazil is aiming to eventually have an income guarantee implemented, Portugal is by far the closest a country has come to actually having fully implemented such a system. This is because the Portuguese government made a guaranteed minimum income a legally enshrined right for the entire population in 1997. The policy remains at present. However, the country's income security policy is rather residualist, with an amount guaranteed well below the poverty line, and other income security policies such as the minimum wage are thus still in place as a consequence. The system also forces participants to attend social integration sessions.

The U.S. State of Alaska has a system which guarantees each citizen a share of the state's oil revenues (see Alaska Permanent Fund Dividend).

The city of Dauphin, Manitoba, Canada had an experimental guaranteed annual income program ("Mincome") in the 1970s.[3]

Many other countries have political parties that advocate such a system, such as the Canadian Action Party, the Anarchist Pogo Party of Germany, the Danish Minority Party, Vivant (Belgium), both the Scottish Green Party and recently the Scottish National Party, and the New Zealand Democratic Party.

In 1972, members of the American Democratic Party wrote a proposal for a GMI into their official platform. However, that particular plank, along with numerous others, was removed following the landslide defeat of Senator George McGovern, the party's candidate in that year's presidential election.

A negative income tax, proposed by Milton Friedman, came close to implementation in the United States under Richard Nixon^{[citation needed]}. Also, the USA has the Earned income tax credit for low-income taxpayers. The citizen's dividend is a similar concept, but the payment made to individuals is based upon the revenues that the government can collect from leasing and selling natural resources (such a dividend in fact exists in the state of Alaska).

[edit] Advocates

The world's most noted advocate of the guaranteed minimum income system is the Belgian economist Philippe van Parijs. Other advocates include Keith Rankin (New Zealand), Andre Gorz (France), Gunnar Adler-Karlsson (Sweden), Herwig Büchele (Innsbruck, Austria), Götz W. Werner (Germany), Dieter Althaus (Germany), Hans A. Pestalozzi (Switzerland), Ayşe Buğra (Turkey), and Charles Murray (USA).

In his final book Where Do We Go From Here: Chaos or Community? (1967) Martin Luther King Jr. wrote

“ I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

from the chapter entitled "Where We Are Going"

Mike Gravel, a candidate for the 2008 Democratic nomination for President of the United States, advocates for a guaranteed annual income, which he terms a "citizen's wage," of $5,000 per person.