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Basic Income

A Basic income is a proposed system of social security, whereby an income is unconditionally granted to all citizens without any prerequisites. The income is a sum of money that is sufficient to live on and is provided to all citizens without means test or work requirement. It is a form of minimum income guarantee that every citizen is entitled to.

The use of the term ‘basic income’ is different in different in economics when compared to its typical usage in the English language. In fact, the definition does not fit all actual uses of the English expression “basic income” at all, or even of its most common translations in other European languages, such as “Bürgergeld”, “allocation universelle”, “renda basica”, “reddito di cittadinanza”, “basisinkomen”, or “borgerlon”.

A basic income may be in the form of a transfer of amount i.e. a citizen’s dividend. On the other hand, it may also be in the form of a guarantee when used as negative income tax. If the basic income is less than the social minimum, it is referred to as a partial basic income. Additionally, a worldwide basic income, which usually involves distribution of wealth between different nations of the world, is referred to as ‘global basic income.’

Currently, a form of minimum income guarantee exists in various European countries. However, the proposed system of basic income in the United States is different from these systems in many important ways. To begin with, the system proposes that the basic income should be paid to individuals as opposed to households. No other income or absence thereof should be considered in dispensing basic income. And finally, it is paid without requiring the performance of any work or the willingness to accept a job if offered.

Currently, there are many benefits provided by different governments of the world, but they are not in the form of cash. For instance, governments provide benefits in the form of a standardized bundle of food, or even in the form of the use of a plot of land. On the other hand, the government may also provide benefits in the form the form of a special currency with restricted uses, for example food stamps or housing grants. Most of these benefits however, permit consumption in the current period only without any possibility of saving it. The basic income, conversely, is provided in cash, without any restrictions whatsoever on the nature or timing of the consumption or investment it helps fund. Hence, it gives citizens the choice to use it in whichever way they feel appropriate.

The basic income can be distributed at regular intervals, such as a week, a month, a term or a year, depending on the proposal. It is also possible to ensure that there is disbursement of a one-time basic income to all citizens at specific points in their life, for instance, when they reach adulthood or retirement age.

However, the system of basic income is still in proposal stage and it is unclear what form it may take as and when it is approved and implemented.

Tags: cash, Economics, government, Income, money, tax

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