The art of taxation

After paying tax and receiving the basic income:

• those on lower incomes would be advantaged compared with the present system;
• people who earned between $20,000 and the average income would be in about the same position as they are now; and
• richer Australians would pay more tax.

Because worker and workless would be paid a basic income this would put an end to the corrosive downward envy which has been eating away at our humanity in this country for the last nine years. It would end the moral panic about “people getting something for nothing” and the ridiculous suggestion that if a government gives people without income enough to live on, they are obliged “to give something back”. A basic income would put an end to perverse incentives to remain on welfare because, unlike the present system, people will always be better off whenever they earn extra income.

Governments would not have to pay the administrative costs of maintaining an exceedingly complex welfare system. There would be greater compliance with the tax system because it would be understood, people would see they get something as a result of their permanent residence in this country and they would regard the system as fairer. In addition the government would be better placed to monitor tax collection once it lets go of its obsession with chasing welfare cheats.

Such a change to the tax and welfare systems would be a reform in the sense meant by the Macquarie Dictionary. A Basic Income would ensure no one lives in poverty. It would allow people to know what they are paying in tax and what everybody is getting as a right of membership of this society and it would provide an efficient base on which to build a more productive and decent country.