1. To claim that a BI is a hand-out to millionaires is to ignore the wider picture. Consider a second criticism voiced in the first paragraph: “many people will pay more in tax than they receive in citizen’s income”. But of course they will – that is how a BI is paid for. After all most people TODAY pay more in tax than they receive from the state through the plethora of government spending. And most likely millionaires will be amongst those who pay more in tax than they receive (unless they have good accountants. But they beauty of a BI system, and the simplification of the tax code that it would encompass, would be to make ‘tax optimization’ considerably harder).

2. You mention the two main objectives behind a citizen’s income: On the right the main objective is to reduce the size of the state, and the extent to which it interferes with the lives of its citizens. On the left the main objective is to alleviate poverty and allow people to lead lives worth living (which, given the way property is currently distributed, necessarily involves transfers from the rich to the poor). But you then go on to say that these two are ‘extremely difficult to reconcile’.

I fail to see how this is so: the administrative simplicity of BI schemes require less manpower to run than current welfare regimes (far less in fact). Furthermore the lack of strings attached allow citizens to choose how to lead their lives, free from government ‘nudging’ (to use a newly fashionably phrase). Hence a smaller and less involved state. But a simple system can be extremely redistributive (indeed, as I said above, more so than a complicated one. There is less wiggle-room for sophisticated accounting). Just consider a BI coupled with a 40% marginal tax rate on any additional earnings – people who earn twice as much as the average pay twice as much as the average…Thus fulfilling the aims of the left.

3. Revenue neutrality and increased average level of benefit received are compatible. This is fairly obvious – the difference comes from the savings made from firing thousands of civil servants. (there are currently roundabout 100,000 civil servants in the Department for Works & Pensions. A BI scheme could feasibly be run on a tenth of that.).

However, this leaves at least two important criticisms standing:

a) odd anomalities. These would certainly exist. How much of a problem they would be is hard to ascertain – families for example would of course benefit from their childrens’ BI entitlement, which may or may not offset the loss in maternity pay. But other pockets, e.g. the disabled, would remain.

b) Disruptions caused by its introduction. These could potentially be huge. The sacking of tens of thousands of civil servants alone would be enough to bring the country to a grinding hold…

I hope this helps to clarify some of the confusions commonly prevalent. Personally I am strongly in favour of BI/CI, though it can probably do its best work in developing countries. Unfortunately fruitful debate on it will most likely remain impossible until we’ve seen a few pilot schemes in action (like the B.I.G. one in namibia). Whether or not it can best be achieved in developed countries through a piece-meal approach or through a big bang, I am not sure…

yours, max