Workers would face 40 percent taxes on wages to fund a new universal basic income

Workers could have their wages taxed at 40 percent to pay for a new universal basic income, according to proposals under consideration in a report today.

ESRI research shows that introducing a payment of €1,200 per month per person, regardless of income, would cost almost €50 billion. According to the report, a universal basic income would be an unconditional payment, paid regularly to everyone over the age of 18, that would be “enough to live on.”

It wouldn’t be a means test and people wouldn’t have to work to get it.

The report says recent policy proposals to afford such a system would mean replacing the lower 20 percent tax rate with the higher 40 percent rate.

She notes that this is put forward in a Greens plan that would also mean removing tax credits.

It was previously estimated that, according to 1990s proposals, an income tax rate of 50 percent or 60 percent would be required to fund such a system. According to the report, the introduction of a basic income for all would require significant changes to the tax and benefit system.

It adds that a pilot study and further analysis would provide further evidence of the broader impact of full deployment in Ireland.

“Assuming it is paid to every person over the age of 18 in Ireland, a universal basic income set at 60 per cent of median income in 2019 would equate to a monthly payment of €1,200 per person and would entail a gross cost of just under €50 billion per person cause year. says the ESRI report, which was funded by the Low Pay Commission.

For comparison: The total expenditure for all social assistance programs amounted to 20.9 billion euros in 2019.

The report looks at other scenarios, including a universal basic income of 50 percent of the median income, or €1,000 per person, which would cost €41 billion.

The cost of universal income at the current welfare rate of €208 per week would be €37 billion.

For €10 billion per year, individuals would end up receiving a monthly payment of €243.

The report lists a number of benefits that come from establishing a universal basic income.

These include an end to the complex administration of means tests and the stigma attached to welfare payments.

It would provide more financial security, it said, and avoid situations where people are discouraged from taking up paid work because of the risk of losing means-tested benefits.

According to the report, it would give people the financial freedom to leave unsafe or exploitative work for other jobs.

Those with higher incomes would pay more taxes at the 40 percent rate since their total income, including that portion of universal income, would be counted.

The disadvantages include the fact that the funds are not distributed “proportionally” to those most in need, since everyone receives them regardless of income.

The report raises concerns that it could cause some people to withdraw from the labor market.

It could likely leave some low-income households financially worse off, and that would require an additional increase in welfare.

“Regardless of the type of universal basic income you think of, it would be very costly and would require deep tax and welfare changes,” said Dr. Paul Redmond, Senior Research Associate at ESRI and one of the authors of the report.

He said the concept receives a lot of attention in public debate, but very little is known about the impact of such policies.

https://www.independent.ie/irish-news/news/workers-would-face-40pc-tax-on-pay-to-fund-new-universal-basic-income-42231610.html Workers would face 40 percent taxes on wages to fund a new universal basic income

Fry Electronics Team

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