Dear Dr Henry
I write in relation to the reviews of the Australian social security system and taxation system. My submission is in the form of a proposal to construct the social security system in a way which would improve equity and remove inefficiencies.
Essentially, I am proposing that:
Because each individual receives the equivalent of the age pension the net rate of taxation on earned income would be slightly less than under the existing system for all workers earning up to the average male weekly earning (two thirds of all workers); those earning more than the average wage would pay slightly more tax and those on high incomes significantly more.
Those who currently receive superannuation do not pay tax and this system could continue – but if they wished to receive the Basic Income, they would have to pay the full rate of tax on their superannuation. It would, however, be simpler to treat superannuation as income and pay everyone the Basic Income.
I am attaching my latest paper “Individual rights, collective rights and Basic Income” which looks at some of these issues but there is a vast body of literature on the subject of Basic Income which can be found on the Basic Income Guarantee Australia website: http://www.basicincome.qut.edu.au/index.jsp
Of particular relevance to the current Australia inquiries is my e-Book: Income Insecurity: The Basic Income Alternative
Basic Income Guarantee Australia is a national affiliate of the Basic Income Earth Network On whose web site a huge array of academic papers can be accessed. http://www.basicincome.org/bien/
The Basic Income debate is intensifying in many parts of Europe, Latin America, Southern Africa and Canada. The last time there was as much international interest in the income maintenance debate Australia (through the Henderson Poverty Inquiry and Treasury’s Priority Review Staff) made a significant contribution. It would be a pity if we sleep through this revival in interest in Basic Income throughout much of the world.
Inquiries into Social Security and Taxation 2008 http://taxreview.treasury.gov.au/content/submissions/pre_14_november_2008/Tomlinson_J ohn.pdf
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