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I did the calculation for UK 2015-2016: There are about 31 million taxpayers in the UK. The basic income tax rate of 20% for income up to £42k/year generates 3

I did the calculation for UK 2015-2016: There are about 31 million taxpayers in the UK. The basic income tax rate of 20% for income up to £42k/year generates 33% of the income tax revenue. Let's agree that these are not the rich people we want to tax. (88,7% of Britons earn less than £50k/year.) The higher (40%) and additional (45%) tax rates generate the rest 67% or £117 billion of the £174 billion income tax revenue. In order to raise additional £472 billion, we would have to increase the higher and additional tax rates to approximately 211%. As you can see, taxing the "rich" cannot raise enough money to give everyone unconditional poverty line minimum income. Source: https://www.gov.uk/government/statistics/income-tax-liabilities-by-income-range https://www.gov.uk/government/statistics/income-tax-liabilit..., https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates

bryanlarsen 9y ago
"Let's agree that these are not the rich people we want to tax." I definitely do not agree. BI is only viable if the average taxpayer sees no or very little net benefit from BI. So the average taxpayer would pay £15k extra in taxes if they receive £15k in BI. And £42k is above average (but not a lot, the medium income is £21k, but only a little more than half of adults are taxpayers)
- dandare 9y ago
  The average taxpayer with income between £20k and £30k pays on average £2630 tax, some 10.7%. If you hand him over £15k and them tax him on average additional £15k then his tax rate must be around 44%. This will be extremely demotivational. A hard-working person will have barely more than absolute freeloader and if he tries to work extra hard you will take half of his reward.
  - bryanlarsen 9y ago
    No, he will have almost twice as much money as the freeloader. More importantly, if both him & the freeloader are spending £15k on rent & food, then the freeloader has £0k of disposable income and the worker has infinitely more disposable income. Another way of looking at it is that average taxpayer with UBI has an income of between £35k and £45k and has a marginal rate not much different from what people making £45k are paying right now. People making £45k aren't currently significantly demotivated by taxes, are they?
    - dandare 9y ago
      You are contradicting yourself. "the average taxpayer would pay £15k extra in taxes if they receive £15k in BI" vs "Another way of looking at it is that average taxpayer with UBI has an income of between £35k and £45k". Today a taxpayer with median income £21k takes home £19k net. After your reform, he will take home the same £19k net (remember: pay £15k extra in taxes if they receive £15k in BI). Except hew will now be way below the median and making only £4k more than the now ubiquitous dude Lebowski type.
      - bryanlarsen 9y ago
        The average taxpayer is well above £21k -- that's the median income, which includes the 40% not paying taxes and of course median is well below average due to tail effects.

bryanlarsen 9y ago

"Let's agree that these are not the rich people we want to tax." I definitely do not agree. BI is only viable if the average taxpayer sees no or very little net benefit from BI. So the average taxpayer would pay £15k extra in taxes if they receive £15k in BI. And £42k is above average (but not a lot, the medium income is £21k, but only a little more than half of adults are taxpayers)

dandare 9y ago
The average taxpayer with income between £20k and £30k pays on average £2630 tax, some 10.7%. If you hand him over £15k and them tax him on average additional £15k then his tax rate must be around 44%. This will be extremely demotivational. A hard-working person will have barely more than absolute freeloader and if he tries to work extra hard you will take half of his reward.
- bryanlarsen 9y ago
  No, he will have almost twice as much money as the freeloader. More importantly, if both him & the freeloader are spending £15k on rent & food, then the freeloader has £0k of disposable income and the worker has infinitely more disposable income. Another way of looking at it is that average taxpayer with UBI has an income of between £35k and £45k and has a marginal rate not much different from what people making £45k are paying right now. People making £45k aren't currently significantly demotivated by taxes, are they?
  - dandare 9y ago
    You are contradicting yourself. "the average taxpayer would pay £15k extra in taxes if they receive £15k in BI" vs "Another way of looking at it is that average taxpayer with UBI has an income of between £35k and £45k". Today a taxpayer with median income £21k takes home £19k net. After your reform, he will take home the same £19k net (remember: pay £15k extra in taxes if they receive £15k in BI). Except hew will now be way below the median and making only £4k more than the now ubiquitous dude Lebowski type.
    - bryanlarsen 9y ago
      The average taxpayer is well above £21k -- that's the median income, which includes the 40% not paying taxes and of course median is well below average due to tail effects.