Full Version: Universal Basic Income v Universal Inheritance
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The subject of a Universal Basic Income(UBI) has now become a topic of public debate, featured in a recent 3 page report in The Economist and subject to a national referendums in Switzerland.

It is seen as a method of providing an income for all in society, addressing issues of wage inequality and income in a changing workplace, alleviating poverty and social depravation and an alternative to state benefits.

The Liberal Party has long offered an alternative in the form of a Universal Inheritance(UI). This would be funded by reform of UK inheritance tax, to provide a lump sum for each and every qualifying young person in this country.

The scheme would look to grant annual or one off sums of monies between 1000 and 5000 pounds, depending on the schemes final form. It has the stated aim to create an opportunity society for those coming of age and entering the workforce.

The two schemes both seek make for a better, more equal society, but differ radically in their philosophy, outcome and funding sources.

A Universal Basic Income addresses the issues of everyday income and standards of living. It does not in itself give people the opportunity to better themselves or improve themselves. It has been argued that as such, it is a disincentive to work and ambition.

It would also in theory also go to those who absolutely do not need it as well as to those who do, unless a form of means testing was introduced, which contradicts the Universal part of the scheme.

A Universal Basic Income is either enough to live on, or it is not, and need related benefits may be a   better solution, such as a better funded and more realistic state pension.

It is unclear how UBI it would be funded in the first instance, but it seems most commentators are looking to taxation. A form of Universal basic Income therefore does not specifically look to redistribute wealth.

Unfortunately increased taxation and potentially more public debt are not sustainable in our current economic climate.

Universal Inheritance, funded by the reform of inheritance tax, seeks to redistribute some of the 44% of this nation’s accrued wealth, currently held by the top 10% of society. These monies move from generation to generation behind an opaque inheritance system.

It is simply impossible to know what sums are involved annually, but government inheritance tax revenues are only around 4 billion pounds a year, equivalent to perhaps 2p on the basic rate of tax.

A Universal Inheritance would not contribute to debt or distort the tax system through higher rates, which can in itself be a disincentive for work. Instead it makes for a modest, but progressive redistribution of wealth in our country. Its source of funding is deeper and more sustainable.

The reach of Universal Inheritance does not extend beyond a narrow age band, thus a narrower application. Yet these are the people for whom it could make the most striking benefits, an enabling inheritance to create an opportunity society in line with Liberal philosophy of a hand-up, not a hand-out.

In the final analyst the wealth of this nation will not support both schemes, even though they are presumed to come from different sources.

Universal Basic Income looks to benefit all for the immediate future, Universal Inheritance looks to create opportunity for a section of the community for long-term benefit. It seeks to redistribute the ownership of unearned capital in each new generation in the interest of greater equality of opportunity.

Whether the debate continues to garner public interest depends on how realistic funding and distribution of the wealth can be most easily accomplished.
I like the idea of both schemes, but Universal Basic Income appeals to me as it provides a sum to allow people to e incentive to work, feed, house and clothe themselves. Administration costs would be cheaper than the present benefit system. It can allow greater flexibility of work, allow people to take up more community or voluntary roles, and a safety nets for those who wish to start a small business or who are self employed. The argument against is that it reduces the incentive to work, the incentive would be a far greater income secured than simply receiving the Universal Basic Income.

As you say the Universal Basic Income would be paid to those on high incomes who do not necessarily need it. This I see as the costly flaw, and which is why adapting it to a National Income Scheme would be better, with a cut off point when wages reaches a certain level. I think this would allow taxation to pay for both National Income and Universal Inheritance.

Basically a combination of both could be achieved, help alleviate severe poverty, redistribute wealth and provide aspiration. It would mean changing the 'universal' aspect of the income scheme to one that is means tested, but a small sacrifice of principle to achieve positive goals.