BY CHANDRA PASMA,CITIZENS FOR PUBLIC JUSTICE

Income Security for All Canadians

Guaranteed Income

Money given by government to citizens…to ensure that everyone has an income

adequate for meeting basic needs…without condition…rather than other government programs

such as welfare

Guaranteed Income

Also known as: Guaranteed annual income Guaranteed adequate income Guaranteed livable income/livable income Basic income/basic income grant/basic income

guarantee Citizen’s income Social/natural resources dividend Refundable family tax credit

Guaranteed Income

Negative Income Tax Administered through the tax system 3 key elements:

Benefit: the maximum amount that any person (or economic unit) can receive

Reduction rate: the amount by which the benefit is reduced for additional income

Break-even level: the income level at which the reduction rate is 100%

Guaranteed Income

Guaranteed Income

Appraisal: Targeted – only those below a certain income level

receive the benefit Lower cost Supposed “work incentive” – 100% of the benefit is

not clawed back for additional income Universal access, rather than universal benefit Is it easier to attack a benefit that is only going to

those in low income?

Guaranteed Income

Universal Demogrant Basic income A fixed amount is paid to every citizen (and permanent

resident) regularly, regardless of income, work or family structure

Payment is non-taxable, but tax on other income is increased Higher income citizens essentially pay the grant back

through taxes Flat tax vs. progressive tax

Guaranteed Income

Example: $15,000 per adult and oldest child in a single-parent

family Plus $7,000 per child With basic income tax rate increased from 15% to

18.5% for the first bracket of taxable income – and so on.

Guaranteed Income

Appraisal: No stigma, because everyone receives the same

benefit Greater social cohesion Easier to access the benefit Harder to cut the benefit rate because it’s not

targeted to low income people Cheaper administration Greater overall cost of the program

Guaranteed Income

Key questions: Conditional?

Targeted to low income earners Activity – a “participation condition”? Certain age groups could be excluded Non-citizens Institutionalized and incarcerated persons

Benefit level and tax rate Benefit level below the poverty line could increase poverty Cumulative tax rates could negate the impact Benefit levels and “work disincentive” Individual vs. family benefits

Guaranteed Income

Funding? Higher tax rates Special taxes – natural resources, consumption, wealth,

capital transfers, information transfers, electronic transactions, ecotax, or Tobin tax

Collapse of existing social programs What additional social programs are maintained?

Employment Insurance Child care Various tax credits and benefits, including CCTB OAS and GIS

Guaranteed Income

Jurisdictional issues Welfare versus assistance Who pays? If it is a federal program, is there a provincial

component?

Guaranteed Income

Arguments in favour: Economic arguments Social arguments Environmental arguments

Support from political right and leftBut also opposition from political right and

left