certain (as yet unspecified) annual return. It will partly replace the benefit system. Income tax rates will be lowered by a, so far, unstated amount. The pension would no longer be universal, but limited to $10,000 with a means-tested top up. Thus, the TOP UBI differs in amount, funding method and philosophy.
We acknowledge that $2,000 per year is not huge, but by starting it gradually, people would be given time to readjust their finances and investment decisions. The 0.75% tax rate and $2,000 pay out would mean that a couple living in the median NZ house valued at $500,000 would pay $3,750 in tax but receive $4,000 in UCI. The average Auckland couple in the $1million house would pay $7,500 and receive $4,000. Non-house-owners would obviously be $4,000 better off. We believe this initial level would be manageable.
Over time the UCI would be increased and could also begin to replace some of the current benefits, but this would be a complex and gradual process.
How would the UCI be funded?
New Zealand's net private worth is approximately 1 trilliondollars. A twealth tax on this would gernerate $7.5b We estimate that there would be 3.77 million people eligible, requiring $7.5 billion.
What would be the benefits of the UCI?
1.Lower house prices, because investment in property speculation would be less profitable. The owner of two $1m houses would pay $12,000 but only receive $2,000. Houses would be more affordable, helping the housing crisis
2.Fewer houses would be left empty waiting for the capital gain on selling.
3.There would be an incentive to better match the size of a house to the number of residents in it. Thus, making more efficient use of the current housing stock.
4. Citizens would feel acknowledged as citizens and be less likely to suffer the alienation which leads to crime, imprisonment and health and mental health issues.
5.Prisoners would accumulate savings which would be available to them upon their release.
6. There would be very high voter turnout, especially among the young, which is good for community solidarity and a feeling of ownership in the democratic process.
7.Parents and other currently non-paid workers would feel that their contribution to society was valued.
8.The value of the UCI is not so high as to discourage participation in the workforce.
9. Young people on turning 18 would feel that they have a part to play in their future. This could have a big effect on New Zealand’s very high suicide rate for 20-30 year-olds.
10.There are many UBI type schemes being trialled around the world and these should be studied. Of particular interest was the experiment in Dauphin, Manitoba in the 1970s where an increase in health and mental health was reported.