Funding UBI with a tax on land
We need to tax the super-rich, but what’s the best way to do it?
One of the most common questions asked about Universal Basic Income (UBI) is “how are we going to fund it?”. Based on the current UK tax structure, it could be paid for through income tax, but it would require an increase in rates at every tax band. Although Income Tax is progressive, those in the lowest tax band would end up proportionately worse-off — they have less income to deduct from, and there are more people in this group than the others combined. Changing the rates of income tax is the simplest method if we stick with the system we have. But it’s certainly not the fairest way. UBI aims to reduce hardship and redistribute wealth so that everyone gets a decent slice of the pie. It would be counter-productive if we funded it through an unfair tax. We need to find another way of generating revenue while doing the least financial harm.
The more we look into the concept of UBI, the more challenges and consequences we see. UBI cannot exist alone — we will need some monetary and fiscal reform, even if we introduce it in stages to gradually smooth the transition. But if we are moving towards a different tax regime, we need to define what that is. We may or may not introduce it overnight, but we need to look at the end game first, if you see what I mean. I like the idea of a Land Value Tax (LVT), as…
