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Sunday, November 19, 2017

The Shared Base Income (SBI) - quick intro

Income seeking is the desire to build enough wealth to ensure financial security. Financial security gives people the financial independence not to need to work for an income because they have enough wealth to sustain themselves without one. With financial independence, we can choose how we contribute and be safe from loss of income for any reason (such as illness, accident, whatever).

At a very high level of wealth, people have the equivalent of guaranteed income such that they can choose how much work, and what work, they do. They have the financial security, the financial independence, to do this.

One way to help people get off the rat-race of pursuing ever higher incomes to generate ever larger stores of wealth to gain financial security, is to just give them than financial security directly via a guaranteed income. This is what universal basic income plans seek to do.

Importantly, the universal basic income does not have to be only in direct payments. In fact, it is more effective if a substantial component of it is indirect in the form of public services like universal free education, universal free healthcare, and other public services that have a universal application by their nature, such as transportation infrastructure, law and order, and defence. By being a universal insurer, the government can (at least theoretically) provide the best and most effective services to everyone, and at the least cost (the government could competitive tender out the service provision, the important part is that the government ensures the universal provision).

The risk to giving everyone enough of a guaranteed income not to work, or rather, to work at what they wish to, is that the market forces of supply and demand and its intermediary of price levels are obscured, thus people may provide products and services that the market (other people) don’t actually want. That is why, rather than providing a guaranteed income at a high level, the guaranteed income, in a shared base income, is set at a ‘base' level, one that isn’t too high to destroy the desire to still attain more income by contributing product that others need.

The base income is coupled with a ‘half-share’ flat tax rate that funds it. It is flat so that there is a fixed (non-diminishing, so still motivating) return on every dollar earned, and is set at 50 per cent on the rationale that it can be conceived as a ‘fair share’, i.e., ‘half for you, half for me’. This also makes it very simple and straight-forward (and less costly) to administer.

The concept of a 'fair share', and a 'base income' that is 'shared universally', is why this universal basic income proposal is called the 'Shared Base Income' (SBI).

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