What is the Essential Difference Between a Basic Income and an Income-tested Benefit System?
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Anne Glenda Miller
Abstract
A basic income (BI) is defined by its characteristics, in contrast to a means-tested benefit, or more accurately here, an income-tested benefit (ITB). Both are tax-exempt. However, the ITB recipients’ gross incomes are taxed in two stages. An ITB is defined by the mechanism (a taper) used to ensure that a recipient does not profit unduly from the benefit. The special case of an ITB that is ‘a periodic cash payment unconditionally delivered to all on an individual basis’ would still not be categorised as a BI when gross income is zero, because ITBs are means-tested. The BI’s essential characteristic ‘without means test’ is identified as ‘it is separate from, and paid prior to, any taxation of incomes or wealth’. The consequences of this essential difference are summarised here. The effects of the characteristics of a BI and the structural features of a typical ITB system are also explored.
Acknowledgements
I am very grateful for helpful comments from Mike Danson on earlier drafts of this paper and for insightful questions from two anonymous referees.
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Articles in the same Issue
- Frontmatter
- Research Articles
- Automation Creates a New Kind of Collective Property That Can Fund Basic Incomes, Equal in Size to the Total Incomes Lost to Automation
- What is the Essential Difference Between a Basic Income and an Income-tested Benefit System?
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Articles in the same Issue
- Frontmatter
- Research Articles
- Automation Creates a New Kind of Collective Property That Can Fund Basic Incomes, Equal in Size to the Total Incomes Lost to Automation
- What is the Essential Difference Between a Basic Income and an Income-tested Benefit System?
- Equal Opportunity Left-Libertarianism and a Basic Income Guarantee
- Evaluating the Sustainability of the Productive Effects of a Universal Cash Transfer in Rural Uganda: Do Impacts on Savings, Investment, Production and Labour Persist After Program end?
- Guaranteed Income: A Policy Landscape Review of 105 Programs in the United States
- Green Basic Income: Evaluating the Bolsa Verde Project in the Brazilian Amazon
