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Malcolm Torry

Print publication date: 2013

Print ISBN-13: 9781447311249

Published to Policy Press Scholarship Online: January 2014

DOI: 10.1332/policypress/9781447311249.001.0001

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Alternatives to a Citizen's Income

Alternatives to a Citizen's Income

Chapter:
(p.255) Chapter 15 Alternatives to a Citizen's Income
Source:
Money for everyone
Author(s):

Malcolm Torry

Publisher:
Policy Press
DOI:10.1332/policypress/9781447311249.003.0015

Three alternative reforms are discussed. Genuine Tax Credits: (Current ‘Tax Credits’ are a means-tested benefit, and are not true Tax Credits.) Tax Credits ascribe an amount of money to each worker. If there are no earnings, then the whole Tax Credit is paid. As earnings rise, the Tax Credit is withdrawn, until a break-point is reached, beyond which the worker pays tax. Negative Income Tax is similar, except that it is specified in terms of a rate of withdrawal for wages below the break-even point Both Tax Credits and Negative Income Tax are administered by the employer through the Pay As You Earn tax system, imposing administrative problems if someone changes their employer or their employment status. If household arrangements determine the amount of the Tax Credit, then the employer needs to know employees’ personal details. Experiments have shown that a Negative Income Tax does not stop people from wanting to be employed. This is a useful result. Also discussed is a Participation Income: like a Citizen's Income, but conditional on the claimant performing such activity as employment, caring work, or voluntary work. Because a Participation Income would require a casework approach, this would be difficult to administer.

Keywords:   Tax Credits, Negative Income Tax, Pay As You Earn, Rate of withdrawal, Administrative problems, Personal details, Participation Income, Caring work, Voluntary work, employment

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