Labor Party finance spokesman Grant Robertson yesterday ruled out an income rate tax of 50% to fund a Universal Basic Income. Labour is considering a Universal Basic Income. It released a background paper for that purpose as part of its Future of Work Commission.
Source: Taxpayers’ Union rubbishes Universal Basic Income idea | Stuff.co.nz.
Questions arise as to how the Labour Party will fund its Universal Basic Income after ruling out a tax rate of 50%. As Brain Easton said:
Many advocates put the UMI forward without doing the sums. Those who do find that the required tax rates are horrendous or the minimum income is so low that it is not a viable means of eliminating poverty. Among the latter are New Zealanders Douglas, Gareth Morgan and Keith Rankin.
The Labour Party’s background paper already has said that the Universal Basic Income proposed by the Morgan Foundation is insufficient because many beneficiaries and all retirees will be much worse off. They receive much more in income support under the existing welfare state and they would under a Universal Basic Income of $11,000 per adult as proposed by the Morgan Foundation.
The solution proposed by the Labour Party is a supplemental income transfers to ensure no one is worse under a Universal Basic Income. This will greatly increase the cost of a Universal Basic income in comparison to the Morgan Foundation proposals.
https://twitter.com/grantrobertson1/status/711758860659240960
A series of questions come to mind that the Labour Party and its finance spokesman Grant Robinson must answer if they are to go anywhere with a Universal Basic Income;
- Is not the point of a Universal Basic Income to replace the welfare state, not supplement it?
- How will the Labour Party fund its Universal Basic Income plus the supplemental income transfers without introducing a $8 billion tax on capital income (including the family home) as in the Morgan Foundation’s proposals?
- The Universal Basic Income proposed by the Morgan Foundation requires $13 billion in extra taxes ($8 billion from taxing capital and $5 billion from a 30% flat-rate income tax) so how much more to that will Labour need for a Universal Basic Income plus supplemental income transfers?
- What is the maximum top marginal income tax rate that Labour will consider to fund a Universal Basic Income?
- Will the Labour Party’s Universal Basic Income be funded by a flat rate income tax or a progressive income tax system?
Source: How we pay for a universal basic income – Whiteboard Wednesday.It would have been my first point
Utopia, you are standing in it! 
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