Land value tax

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Land_value_tax 

 

A land value tax or location value tax (LVT), also called a site valuation tax, split rate tax, or site-value rating, is an ad valorem levy on the unimproved value of land. Unlike property taxes, it disregards the value of buildings, personal property and other improvements to real estate. A land value tax is generally favored by economists as (unlike other taxes) it does not cause economic inefficiency, and it tends to reduce inequality.

Land value tax has been referred to as "the perfect tax" and the economic efficiency of a land value tax has been known since the eighteenth century. Many economists since Adam Smith and David Ricardo have advocated this tax, but it is most famously associated with Henry George, who argued that because the supply of land is fixed and its location value is created by communities and public works, the economic rent of land is the most logical source of public revenue.

A land value tax is a progressive tax, in that the tax burden falls on titleholders in proportion to the value of locations, the ownership of which is highly correlated with overall wealth and income. Land value taxation is currently implemented throughout Denmark, Estonia, Lithuania, Russia, Singapore, and Taiwan; it has also been applied to smaller extents in subregions of Australia, Mexico (Mexicali), and the United States (e.g., Pennsylvania).

Economic properties

Efficiency

A supply and demand diagram showing the effects of land value taxation. As the supply of land is fixed, the burden of the tax falls entirely on the land owner. There is no change in the rental price and quantity transacted, and no deadweight loss.

 

Most taxes distort economic decisions and suppress beneficial economic activity.^[13] LVT is payable regardless of how well or poorly land is actually used. Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses, preventing landlords from passing LVT to tenants.

The direct beneficiaries of incremental improvements to the area surrounding a site are the land's occupants. Such improvements shift tenants' demand curve to the right. Landlords benefit from price competition among tenants; the only direct effect of LVT in this case is to reduce the amount of social benefit that is privately captured as land price by titleholders.

LVT is said to be justified for economic reasons because it does not deter production, distort markets, or otherwise create deadweight loss. Land value tax can even have negative deadweight loss (social benefits), particularly when land use improves. Nobel Prize-winner William Vickrey believed that

"removing almost all business taxes, including property taxes on improvements, excepting only taxes reflecting the marginal social cost of public services rendered to specific activities, and replacing them with taxes on site values, would substantially improve the economic efficiency of the jurisdiction."

A positive relationship of LVT and market efficiency is predicted by economic theory and has been observed in practice. Fred Foldvary stated that the tax encourages landowners to develop vacant/underused land or to sell it. He claimed that because LVT deters speculative land holding, dilapidated inner city areas return to productive use, reducing the pressure to build on undeveloped sites and so reducing urban sprawl. For example, Harrisburg, Pennsylvania in the United States has taxed land at a rate six times that on improvements since 1975. This policy was credited by mayor Stephen R. Reed with reducing the number of vacant structures in downtown Harrisburg from around 4,200 in 1982 to fewer than 500.

LVT is arguably an ecotax because it discourages the waste of prime locations, which are a finite resource. LVT is an efficient tax to collect because unlike labour and capital, land cannot be hidden or relocated. Many urban planners claim that LVT is an effective method to promote transit-oriented development.

Real estate values

The value of land is related to the value it can provide over time. This value can be measured by the ground rent that a piece of land can rent for on the market. The present value of ground-rent is the basis for land prices. A land value tax (LVT) will reduce the ground rent received by the landlord, and thus will decrease the price of land, holding all else constant. The rent charged for land may also decrease as a result of efficiency gains if speculators stop hoarding unused land.

Real estate bubbles direct savings towards rent seeking activities rather than other investments and can contribute to recessions. Advocates claim that LVT reduces the speculative element in land pricing, thereby leaving more money for productive capital investment.

At sufficiently high levels, land value tax would cause real estate prices to fall by removing land rents that would otherwise become 'capitalized' into the price of real estate. It also encourages landowners to sell or relinquish titles to locations that they are not using. This might cause some landowners, especially pure landowners, to resist high land value tax rates. Landowners often possess significant political influence, so this may explain the limited spread of land value taxes so far.

Tax incidence

A land value tax has progressive tax effects, in that it is paid by the owners of valuable land who tend to be the rich, and since the amount of land is fixed, the tax burden cannot be passed on as higher rents or lower wages to tenants, consumers or workers.

Practical issues

Several practical issues are involved in the implementation of a land value tax. Most notably, it must be:

• Calculated fairly and accurately
• High enough to raise sufficient revenue without causing land abandonment
• Billed to the correct person or business entity

Assessment/appraisal

Levying a land value tax is straightforward, requiring only a valuation of the land and a title register. Value assessment can be difficult in practice. In a 1796 United States Supreme Court opinion, Justice William Paterson said that leaving the valuation process up to assessors would cause bureaucratic complexities, as well as non-uniform assessments. Murray Rothbard later raised similar concerns, claiming that no government can fairly assess value, and that this can only be determined by a free market.

Compared to modern day property tax evaluations, land valuations involve fewer variables and have smoother gradients than valuations that include improvements. This is due to variation of building style, quality and size between lots. Modern statistical techniques have eased the process; in the 1960s and 1970s, multivariate analysis was introduced as an assessment means. Usually, such a valuation process commences with a measurement of the most and least valuable land within the taxation area. A few sites of intermediate value are then identified and used as "landmark" values. Other values are filled in between the landmark values. The data is then collated in a database and linked to a unique property reference number, "smoothed" and mapped using a geographic information system (GIS). Thus, even if the initial valuation is difficult, once the system is in use, successive valuations become easier. Although still easily distorted by corrupt politicians through the excuse of the complex coding.

Revenue

In this case, land is taxed at 100% of its value, eliminating the landowner surplus completely. The ownership of land becomes worthless except to those who value it higher than market rents.

In the context of land value taxation as a single tax (replacing all other taxes), some have argued that LVT alone cannot raise enough revenues. However, the presence of other taxes can reduce land values and hence the amount of revenue that can be raised from them. The Physiocrats argued that all taxes are ultimately at the expense of land rental values. Most modern LVT systems function alongside other taxes and thus only reduce their impact without removing them. Land taxes that are higher than the rental surplus (the full land rent for that time period) would result in landowner abandonment.

Title

In some countries, LVT is impractical because of uncertainty regarding land titles and established land ownership and tenure. For instance a parcel of grazing land may be communally owned by village inhabitants and administered by village elders. The land in question would need to be held in a trust or similar body for taxation purposes. If the government cannot accurately define ownership boundaries and ascertain the proper owners, it cannot know from whom to collect the tax. The lack of clear titles is found in many developing countries. In African countries with imperfect land registration, boundaries may be poorly surveyed and the owner can be unknown. LVT proponents argue that such owners can be made to identify themselves under penalty of losing the land.

Incentives

Speculation

The owner of a vacant lot in a thriving city must still pay a tax and would rationally perceive the property as a financial liability, encouraging him/her to put the land to use in order to cover the tax. LVT removes financial incentives to hold unused land solely for price appreciation, making more land available for productive uses. Land value tax creates an incentive to convert these sites to more intensive private uses or into public purposes.

Incidence

The selling price of a good that is fixed in supply, such as land, decreases if it is taxed. By contrast, the price of manufactured goods can rise in response to increased taxes, because the higher price reduces the number of units that are made. The price increase is how the maker passes along some part of the tax to consumers. However, if the revenue from LVT is used to reduce other taxes or to provide valuable public investment, it can cause land prices to rise as a result of higher productivity, by more than the amount that LVT removed.

Land tax incidence rests completely upon landlords, although business sectors that provide services to landlords are indirectly impacted. In some economies, 80 percent of bank lending finances real estate, with a large portion of that for land. Reduced demand for land speculation might reduce the amount of circulating bank credit. 

While owners cannot charge higher rent to compensate for LVT, removing other taxes may increase rents.

Land use

Assuming constant demand, an increase in constructed space decreases the cost of improvements to land such as houses. Shifting property taxes from improvements to land encourages development. Infill of underutilized urban space is one common practice to reduce urban sprawl.

Collection

LVT is less vulnerable to tax evasion, since land cannot be concealed or moved overseas and titles are easily identified, as they are registered with the public. Land value assessments are usually considered public information, which is available upon request. Transparency reduces tax evasion.

Ethics

Land acquires a scarcity value owing to the competing needs for space. The value of land generally owes nothing to the landowner and everything to the surroundings. LVT supporters claim that the value of land depends on the community.

Religion

In religious terms, it has been claimed that land is God's gift to mankind. For example, the Roman Catholic Church as part of its "universal destination of goods" principle asserts:

Everyone knows that the Fathers of the Church laid down the duty of the rich toward the poor in no uncertain terms. As St. Ambrose put it: "You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich."

— Pope Paul VI, Populorum Progressio (1967)

In addition, the Church maintains that political authority has the right and duty to regulate, including the right to tax, the legitimate exercise of the right to ownership for the sake of the common good.

Equity

Everybody works but the vacant lot – Henry George

 

LVT considers the effect on land value of location, and of improvements made to neighbouring land, such as proximity to roads and public works. LVT is the purest implementation of the public finance principle known as value capture.

A public works project can increase land values and thus increase LVT revenues. Arguably, public improvements should be paid for by the landowners who benefit from them. Thus, LVT captures the value of socially created wealth, allowing a reduction in tax on privately created (non-land) wealth.

LVT generally is a progressive tax, with those of greater means paying more, in that land ownership is correlated to incomes and landlords cannot shift the tax burden onto tenants. LVT generally reduces economic inequality, removes incentives to misuse real estate, and reduces the vulnerability of economies to property bubbles and their collapse.

History

Pre-modern

Land value taxation began after the introduction of agriculture. It was originally based on crop yield. This early version of the tax required simply sharing the yield at the time of the harvest, on a yearly basis.

Aryan sages of ancient India claimed that land should be held in common and that unfarmed land should produce the same tax as productive land. "The earth ...is common to all beings enjoying the fruit of their own labour; it belongs...to all alike"; therefore, "there should be left some for everyone". Apastamba said "If any person holding land does not exert himself and hence bears no produce, he shall, if rich, be made to pay what ought to have been produced".

Mencius was a Chinese philosopher (around 300 BCE) who advocated for the elimination of taxes and tariffs, to be replaced by the public collection of urban land rent: "In the market-places, charge land-rent, but don't tax the goods."

During the Middle-Ages, in the West, the first regular and permanent land tax system was based on a unit of land known as the hide. The hide was originally an amount of land sufficient to support a household, but later became subject to a land tax known as "geld".

Physiocrats

Anne Robert Jacques Turgot, one of the leading physiocrats

The physiocrats were a group of economists who believed that the wealth of nations was derived solely from the value of land agriculture or land development. Before the Industrial Revolution, this was approximately correct. Physiocracy is one of the "early modern" schools of economics. Physiocrats called for the abolition of all existing taxes, completely free trade and a single tax on land. They did not distinguish between the intrinsic value of land and ground rent. Their theories originated in France and were most popular during the second half of the 18th century. The movement was particularly dominated by Anne Robert Jacques Turgot (1727–1781) and François Quesnay (1694–1774). It influenced contemporary statesmen, such as Charles Alexandre de Calonne. The Physiocrats were highly influential in the early history of land value taxation in the United States.

Radical Movement

A participant in the Radical Movement, Thomas Paine contended in his Agrarian Justice pamphlet that all citizens should be paid 15 pounds at age 21 "as a compensation in part for the loss of his or her natural inheritance by the introduction of the system of landed property." "Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds." This proposal was the origin of the citizen's dividend advocated by Geolibertarianism. Thomas Spence advocated a similar proposal except that the land rent would be distributed equally each year regardless of age.

Classical economists

Adam Smith, in his 1776 book The Wealth of Nations, first rigorously analyzed the effects of a land value tax, pointing out how it would not hurt economic activity, and how it would not raise contract rents.

Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expense. In every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground-rent.

— Adam Smith, The Wealth of Nations, Book V, Chapter 2, Article I: Taxes upon the Rent of Houses

Henry George

Henry George in 1865

Henry George (2 September 1839 – 29 October 1897) was perhaps the most famous advocate of recovering land rents for public purposes. An American journalist, politician and political economist, he advocated a "Single Tax" on land that would eliminate the need for all other taxes. In his best-selling work Progress and Poverty (1879), Henry George argued that because the value of land depends on natural qualities combined with the economic activity of communities, including public investments, the economic rent of land was the best source of tax revenue. This book significantly influenced land taxation in the United States and other countries, including Denmark, which continues 'grundskyld' (Ground Duty) as a key component of its tax system. The philosophy that natural resource rents should be captured by society is now often known as Georgism. Its relevance to public finance is underpinned by the Henry George theorem.

Meiji Restoration

After the 1868 Meiji Restoration in Japan, Land Tax Reform was undertaken. A land value tax was implemented beginning in 1873. By 1880 initial problems with valuation and rural opposition had been overcome and rapid industrialisation began.

Liberal and Labour Parties in the United Kingdom

In the United Kingdom, LVT was an important part of the platform of the Liberal Party during the early part of the twentieth century: David Lloyd George and H. H. Asquith proposed "to free the land that from this very hour is shackled with the chains of feudalism." It was also advocated by Winston Churchill early in his career. The modern Liberal Party (not to be confused with the Liberal Democrats, who are the heir to the earlier Liberal Party and who offer some support for the idea) remains committed to a local form of land value taxation, as do the Green Party of England and Wales and the Scottish Green Party.

The 1931 Labour budget included a land value tax, but before it came into force it was repealed by the Conservative-dominated National Government that followed shortly after.

An attempt at introducing site value taxation in the administrative County of London was made by the local authority under the leadership of Herbert Morrison in the 1938–9 Parliament, called the London Rating (Site Values) Bill. Although it failed, it detailed legislation for the implementation of a system of land value taxation using annual value assessment.

After 1945, the Labour Party adopted the policy, against substantial opposition, of collecting "development value": the increase in land price arising from planning consent. This was one of the provisions of the Town and Country Planning Act 1947, but it was repealed when the Labour government lost power in 1951.

Senior Labour figures in recent times have advocated an LVT, notably Andy Burnham in his 2010 leadership campaign, former Leader of the Opposition Jeremy Corbyn and Shadow Chancellor John McDonnell.

Republic of China

The Republic of China was one of the first countries to implement a Land Value Tax, it being part of its constitution. Sun Yat-Sen would learn about LVT from the Kiautschou Bay concession, which had successful implementation of LVT, bringing increased wealth and financial stability to the colony. The Republic of China would go on to implement LVT in farms at first, later implementing it in the urban areas due to its success. 

Modern economists

Alfred Marshall argued in favour of a "fresh air rate", a tax to be charged to urban landowners and ‘'levied on that value of urban land that is caused by the concentration of population'’. That ‘'general rate'’ should have ‘'to be spent on breaking out small green spots in the midst of dense industrial districts, and on the preservation of large green areas between different towns and between different suburbs which are tending to coalesce'’. This idea influenced Marshall's pupil Arthur Pigou's ideas on taxing negative externalities.

Paul Samuelson supported a land value tax. "Our ideal society finds it essential to put a rent on land as a way of maximizing the total consumption available to the society. ...Pure land rent is in the nature of a 'surplus' which can be taxed heavily without distorting production incentives or efficiency. A land value tax can be called 'the useful tax on measured land surplus'."

Milton Friedman stated: "There's a sense in which all taxes are antagonistic to free enterprise – and yet we need taxes. ...So the question is, which are the least bad taxes? In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago."

Michael Hudson is a proponent for taxing rent, especially land rent.".... politically, taxing economic rent has become the bête noire of neoliberal globalism. It is what property owners and rentiers fear most of all, as land, subsoil resources and natural monopolies far exceed industrial capital in magnitude. What appears in the statistics at first glance as "profit" turns out upon examination to be Ricardian or "economic" rent."

Paul Krugman agreed that a land value tax is efficient, however he disputed whether it should be considered a single tax, as he believed it would not be enough alone, excluding taxes on natural resource rents and other Georgist taxes, to fund a welfare state. "Believe it or not, urban economics models actually do suggest that Georgist taxation would be the right approach at least to finance city growth. But I would just say: I don’t think you can raise nearly enough money to run a modern welfare state by taxing land [only]."

Joseph Stiglitz, articulating the Henry George theorem wrote that, "Not only was Henry George correct that a tax on land is nondistortionary, but in an equilitarian society ... tax on land raises just enough revenue to finance the (optimally chosen) level of government expenditure."

Rick Falkvinge has proposed a "Simplified taxless state" where the state is said to own all the land it can defend from other states, and may lease this land to people at market rates.

Implementation

Australia

Land taxes in Australia are levied by the states, and generally apply to land holdings only within a particular state. The exemption thresholds vary, as do the tax rates and other rules. 

In New South Wales, the state land tax exempts farmland and principal residences and there is a tax threshold. Determination of land value for tax purposes is the responsibility of the Valuer-General. In Victoria, the land tax threshold is $250,000 on the total value of all Victorian property owned by a person as at 31 December of each year, and taxed at a progressive rate. The principal residence, primary production land and land used by a charity are exempt from land tax. In Tasmania the threshold is $25,000 and the audit date is 1 July. Between $25,000 and $350,000 the tax rate is 0.55% and over $350,000 it is 1.5%. In Queensland, the threshold for individuals is $600,000 and $350,000 for other entities, and the audit date is 30 June. In South Australia the threshold is $332,000 and taxed at a progressive rate, the audit date is 30 June.

By revenue, property taxes represent 4.5% of total taxation in Australia. A government report in 1986 for Brisbane, Queensland advocated a land tax. 

The Henry Tax Review of 2010 commissioned by the federal government recommended that state governments replace stamp duty with land value tax. The review proposed multiple marginal rates and that most agricultural land would be in the lowest band with a rate of zero. Only the Australian Capital Territory moved to adopt this system and planned to reduce stamp duty by 5% and raise land tax by 5% for each of twenty years.

United States

Common property taxes include land value, which usually has a separate assessment. Thus, land value taxation already exists in many jurisdictions. Some jurisdictions have attempted to rely more heavily on it. In Pennsylvania certain cities raised the tax on land value while reducing the tax on improvement/building/structure values. For example, the city of Altoona adopted a property tax that solely taxes land value in 2002 but repealed the tax in 2016.

In the late 19th century followers of Henry George founded a single tax colony at Fairhope, Alabama. Although the colony, now a nonprofit corporation, still holds land in the area and collects a relatively small ground rent, the land is subject to state and local property taxes.

Hong Kong

Government rent in Hong Kong, formerly the crown rent, is levied in addition to Rates. For properties that are located in the New Territories (including New Kowloon), or located in the rest of the territory and whose land grant was recorded after 27 May 1985, government rent is levied at 3% of the rateable rental value.

Canada

Land value taxes were common in Western Canada at the turn of the twentieth century. In Vancouver LVT became the sole form of municipal taxation in 1910 under the leadership of mayor, Louis D. Taylor. Gary B. Nixon (2000) stated that the rate never exceeded 2% of land value, too low to prevent the speculation that led directly to the 1913 real estate crash. All Canadian provinces later taxed improvements.

Estonia

Estonia levies a land value tax which is used to fund local municipalities. It is a state level tax, but 100% of the revenue is used to fund Local Councils. The rate is set by the Local Council within the limits of 0.1–2.5%. It is one of the most important sources of funding for municipalities. The land value tax is levied on the value of the land only, improvements are not considered. Very few exemptions are considered on the land tax and even public institutions are subject to the land value tax. Land that is the site of a church is exempt, but other land held by religious institutions is not exempt. The tax has contributed to a high rate (~90%) of owner-occupied residences within Estonia, compared to a rate of 67.4% in the United States.

Kenya

Kenya's LVT history dates to at least 1972, shortly after it achieved independence. Local governments must tax land value, but are required to seek approval from the central government for rates that exceed 4 percent. Buildings were not taxed in Kenya as of 2000. The central government is legally required to pay municipalities for the value of land it occupies. Kelly claimed that maybe as a result of this land reform, Kenya became the only stable country in its region. As of late 2014, the city of Nairobi was still taxing only land values, although a tax on improvements had been proposed.

Namibia

A land value taxation on rural land was introduced in Namibia, with the primary intention of improving land use.

Singapore

Singapore owns the majority of its land which it leases for 99-year terms. In addition, Singapore also taxing development uplift at around 70%. These two sources of revenue fund most of Singapore's new infrastructure.

Taiwan

As of 2010, land value taxes and land value increment taxes accounted for 8.4% of total government revenue in Taiwan.

Mexico

The capital city of Baja California, Mexicali, has had a Land Value Tax since the 1990s when it became the first locality in Mexico to implement such a tax.

Russia

In 1990, several economists wrote to then President Mikhail Gorbachev suggesting that Russia adopt LVT; its failure to do so was argued as causal in the rise of the Oligarchs. Currently, Russia has a very modest Land Value tax of 0.3% on residential, agricultural and utilities lands as well as a 1.5% tax for other types of land.

Countries with active discussion

China

China's Real Rights Law contains provisions founded on LVT analysis.

Ireland

In 2010 the government of Ireland announced that it would introduce an LVT, beginning in 2013. However following a 2011 change in government, a property value tax was introduced instead (see Local property tax (Ireland)).

New Zealand

After decades of a modest land value tax, New Zealand abolished the tax in 1990. Discussions remain as to whether or not to bring it back (see Land taxes in New Zealand). Earlier Georgist politicians included Patrick O'Regan and Tom Paul (who was Vice-President of the New Zealand Land Values League).

United Kingdom

In September 1908 Prime Minister Lloyd George instructed McKenna, the First Lord of the Admiralty, to build more Dreadnought battleships in the financial year to the following April, the ships were to be financed by a proposed new Land Tax. Lloyd George believed relating national defence to land tax would both provoke the opposition of the House of Lords and rally the people round a simple emotive issue. The House of Lords, composed of wealthy land owners, rejected the Budget in November 1909, leading to a constitutional crisis.

LVT was on the UK statute books briefly in 1931, introduced by Philip Snowden's 1931 budget, strongly supported by prominent LVT campaigner Andrew MacLaren MP. MacLaren lost his seat at the next election (1931) and the act was repealed, MacLaren tried again with a private member's bill in 1937; it was rejected 141 to 118.

Labour Land Campaign activities within the Labour party and the broader Labour movement for "a more equitable distribution of the Land Values that are created by the whole community" through LVT. Its membership includes members of the British Labour Party, Trade Unions and Cooperatives and individuals. The Liberal Democrats' ALTER (Action for Land Taxation and Economic Reform) aims

to improve the understanding of and support for Land Value Taxation amongst members of the Liberal Democrats; to encourage all Liberal Democrats to promote and campaign for this policy as part of a more sustainable and just resource based economic system in which no one is enslaved by poverty; and to cooperate with other bodies, both inside and outside the Liberal Democrat Party, who share these objectives.

The Green Party "favour moving to a system of Land Value Tax, where the level of taxation depends on the rental value of the land concerned."

A course in "Economics with Justice" with a strong foundation in LVT are offered at the School of Economic Science, which was founded by Andrew MacLaren MP and has historical links with the Henry George Foundation.

Scotland

Since the establishment of the Scottish Parliament in 1999, interest in adopting a land value tax in Scotland has grown. 

In February 1998, the Scottish Office of the British Government launched a public consultation process on land reform. A survey of the public response found that: "excluding the responses of the lairds and their agents, reckoned as likely prejudiced against the measure, 20% of all responses favoured the land tax" (12% in grand total, without the exclusions). The government responded by announcing "a comprehensive economic evaluation of the possible impact of moving to a land value taxation basis". However, no measure was adopted.

In 2000 the Parliament's Local Government Committee's inquiry into local government finance explicitly included LVT, but the final report omitted any mention.

In 2003 the Scottish Parliament passed a resolution: "That the Parliament notes recent studies by the Scottish Executive and is interested in building on them by considering and investigating the contribution that land value taxation could make to the cultural, economic, environmental and democratic renaissance of Scotland."

In 2004 a letter of support was sent from members of the Scottish Parliament to the organisers and delegates of the IU's 24th international conference—including members of the Scottish Green Party, Scottish Socialist Party and the Scottish National Party.

The policy was considered the 2006 Scottish Local Government Finance Review whose 2007 Report concluded that "although land value taxation meets a number of our criteria, we question whether the public would accept the upheaval involved in radical reform of this nature, unless they could clearly understand the nature of the change and the benefits involved.... We considered at length the many positive features of a land value tax which are consistent with our recommended local property tax [LPT], particularly its progressive nature." However, "[h]aving considered both rateable value and land value as the basis for taxation, we concur with Layfield (UK Committee of Inquiry, 1976) who recommended that any local property tax should be based on capital values."

In 2009, Glasgow City Council resolved to introduce LVT: "the idea could become the blueprint for Scotland’s future local taxation" The Council agreed to a "long term move to a local property tax / land value tax hybrid tax": Its Local Taxation Working Group stated that simple [non-hybrid] land value taxation should itself "not be discounted as an option for local taxation reform: it potentially holds many benefits and addresses many existing concerns".

Policy interest

In Zimbabwe, government coalition partners the Movement for Democratic Change adopted LVT.

Belgium

Ethiopia

Republic of South Africa

Thailand

Hungary

South Korea

Basic income

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Basic_income 

 

On 4 October 2013, Swiss activists from Generation Grundeinkommen organized a performance in Bern in which roughly 8 million coins, one coin representing one person out of Switzerland's population, were dumped on a public square. This was done in celebration of the successful collection of more than 125,000 signatures, forcing the government to hold a referendum in 2016 on whether or not to incorporate the concept of basic income in the federal constitution. The measure did not pass, with 76.9% voting against changing the federal constitution to support basic income.

 

Basic income, also called universal basic income (UBI), citizen's income, citizen's basic income, basic income guarantee, basic living stipend, guaranteed annual income, or universal demogrant, is a theoretical governmental public program for a periodic payment delivered to all citizens of a given population without a means test or work requirement.

Basic income can be implemented nationally, regionally, or locally. An unconditional income that is sufficient to meet a person's basic needs (i.e., at or above the poverty line) is sometimes called a full basic income; if it is less than that amount, it may be called a partial basic income. The expression 'negative income tax' (NIT) is used in roughly the same sense as basic income, sometimes with different connotations in respect of the mechanism, timing or conditionality of payments. Some welfare systems are sometimes regarded as steps on the way to a basic income, but because they have conditions attached, they are not basic incomes. One such system is a guaranteed minimum income system, which raises household incomes to a specified minimum. For example, Bolsa Família in Brazil is restricted to low-income families, and the children of recipients are obligated to attend school.

Several political discussions are related to the basic income debate, including those regarding automation, artificial intelligence (AI), and the future of work. A key issue in these debates is whether automation and AI will significantly reduce the number of available jobs and whether a basic income could help alleviate such problems.

History

The idea of a state-run basic income dates back to the early 16th century when Sir Thomas More's Utopia depicted a society in which every person receives a guaranteed income. In the late 18th century, English radical Thomas Spence and American revolutionary Thomas Paine both declared their support for a welfare system that guaranteed all citizens an assured basic income. Nineteenth-century debate on basic income was limited, but during the early part of the 20th century, a basic income called a "state bonus" was widely discussed. In 1946 the United Kingdom implemented unconditional family allowances for the second and subsequent children of every family. In the 1960s and 1970s, the United States and Canada conducted several experiments with negative income taxation, a related welfare system. From the 1980s and onward, the debate in Europe took off more broadly, and since then, it has expanded to many countries around the world. A few countries have implemented large-scale welfare systems that have some similarities to basic income, such as Bolsa Família in Brazil. From 2008 onward, several experiments with basic income and related systems have taken place. 

Governments can contribute to individual and household income maintenance strategies in three ways:

1. The government can establish a minimum income guarantee and not allow income to fall below levels set for various household types, maintaining these levels by paying means-tested benefits.
2. Social insurance can pay benefits in the case of sickness, unemployment, or old age, on the basis of contributions paid.
3. Universal unconditional payments, such as the United Kingdom's Child Benefit for children.

A means-tested benefit that raises a household's income to a guaranteed minimum level is unlike a basic income in that income delivered under a system of guaranteed minimum income is reduced exactly as other sources of income increase, whereas income received from a basic income is constant regardless of other sources of income. Johannes Ludovicus Vives (1492–1540), for example, proposed that the municipal government should be responsible for securing a subsistence minimum to all its residents "not on the grounds of justice but for the sake of a more effective exercise of morally required charity." However, Vives also argued that to qualify for poor relief, the recipient must "deserve the help he or she gets by proving his or her willingness to work."

The first to develop the idea of social insurance was Marquis de Condorcet (1743–1794). After playing a prominent role in the French Revolution, he was imprisoned and sentenced to death. While in prison, he wrote the Esquisse d’un tableau historique des progrès de l’esprit humain ("Sketch for a Historical Picture of the Progress of the Human Mind"; published posthumously by his widow in 1795), the last chapter of which describes his vision of social insurance and how it could reduce inequality, insecurity, and poverty. Condorcet mentioned, very briefly, the idea of a benefit to all children old enough to start working by themselves and to start up a family of their own. He is not known to have said or written anything else on this proposal, but his close friend and fellow member of the U.S. Constitutional Convention Thomas Paine (1737–1809) developed the idea much further, several years after Condorcet's death.

The first social movement for basic income developed around 1920 in the United Kingdom. Its proponents included:

• Bertrand Russell (1872–1970) argued for a new social model that combined the advantages of socialism and anarchism, and that basic income should be a vital component in that new society.
• Dennis and Mabel Milner, a Quaker married couple of the Labour Party, published a short pamphlet entitled "Scheme for a State Bonus" (1918) that argued for the "introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom." They considered it a moral right for everyone to have the means to subsistence, and thus it should not be conditional on work or willingness to work.
• C. H. Douglas was an engineer who became concerned that most British citizens could not afford to buy the goods that were produced, despite the rising productivity in British industry. His solution to this paradox was a new social system he called social credit, a combination of monetary reform and basic income.

In 1944 and 1945, the Beveridge Committee, led by the British economist William Beveridge, developed a proposal for a comprehensive new welfare system of social insurance, means-tested benefits, and unconditional allowances for children. Committee member Lady Rhys-Williams argued that the incomes for adults should be more like a basic income. She was also the first to develop the negative income tax model. Her son Brandon Rhys Williams proposed a basic income to a parliamentary committee in 1982, and soon after that in 1984, the Basic Income Research Group, now the Citizen's Basic Income Trust, began to conduct and disseminate research on basic income.

Milton Friedman

In the 1960s and 1970s, some welfare debates in the United States and Canada included discussions of basic income. Six pilot projects were also conducted with the negative income tax. President Richard Nixon proposed a massive overhaul of the federal welfare system, replacing many of the federal welfare programs with a negative income tax – a proposal favored by economist Milton Friedman. Nixon said, "The purpose of the negative income tax was to provide both a safety net for the poor and a financial incentive for welfare recipients to work." Congress eventually approved a guaranteed minimum income for the elderly and the disabled, not for all citizens.

In the late 1970s and the 1980s, basic income was more or less forgotten in the United States, but it started to gain some traction in Europe. Basic Income European Network, later renamed to Basic Income Earth Network, was founded in 1986 and started to arrange international conferences every two years. From the 1980s, some people outside party politics and universities took an interest. In West Germany, groups of unemployed people took a stance for the reform.

In 2002, a green paper was commissioned on the topic by the Government of Ireland.

Since 2010, basic income again became an active topic in many countries. Basic income is currently discussed from a variety of perspectives, including in the context of ongoing automation and robotization, often with the argument that these trends mean less paid work in the future. This would create a need for a new welfare model. Several countries are planning for local or regional experiments with basic income or related welfare systems. For example, experiments in Canada, Finland, India, and Namibia have received international media attention. The policy was discussed by the Indian Ministry of Finance in an economic survey in 2017.

So far, no country has introduced an unconditional basic income as law. The first and only national referendum about basic income was held in Switzerland in 2016. The result was a rejection of the basic income proposal in a vote of 76.9% to 23.1%.

Perspectives in the basic income debate

Automation

The debates about basic income and automation are closely linked. U.S. presidential candidate and nonprofit founder Andrew Yang has stated that automation caused the loss of 4 million manufacturing jobs and advocated for a UBI of $1,000/month rather than worker retraining programs.

Some technologists believe that automation, among other things, is creating technological unemployment. Some in the "tech elite" (Marc Andreessen, Sam Altman, Peter Diamandis, and others) support the idea of a UBI.

Entrepreneur and 2020 Democratic candidate Andrew Yang has advocated for a basic income to counter job displacement through automation. His basic income policy, the Freedom Dividend, proposes to give every American adult $1,000 a month.

Bad behavior

Criticism of a basic income includes the argument that some recipients would spend a basic income on alcohol and other drugs. However, studies of the impact of direct cash transfer programs provide evidence to the contrary. A 2014 World Bank review of 30 scientific studies concludes: "Concerns about the use of cash transfers for alcohol and tobacco consumption are unfounded."

Basic income as a part of a post-capitalistic economic system

Erik Olin Wright

Harry Shutt proposed basic income and other measures to make most or all businesses collective rather than private. These measures would create a post-capitalist economic system.

Erik Olin Wright characterizes basic income as a project for reforming capitalism into an economic system by empowering labor in relation to capital, granting workers greater bargaining power with employers in labor markets, which can gradually de-commodify labor by separating work from income. This would allow for an expansion in the scope of the social economy by granting citizens greater means to pursue non-work activities (such as art or other hobbies) that do not yield strong financial returns.

James Meade advocated for a social dividend scheme funded by publicly-owned productive assets. Russell argued for a basic income alongside public ownership as a means of shortening the average working day and achieving full employment.

Economists and sociologists have advocated for a form of basic income as a way to distribute economic profits of publicly owned enterprises to benefit the entire population, also referred to as a social dividend, where the basic income payment represents the return to each citizen on the capital owned by society. These systems would be directly financed from returns on publicly owned assets and are featured as major components of many models of market socialism.

Guy Standing has proposed financing a social dividend from a democratically-accountable sovereign wealth fund built up primarily from the proceeds of a tax on rentier income derived from ownership or control of assets—physical, financial, and intellectual.

During the COVID-19 Pandemic of 2020, U.K. Chancellor of the Exchequer Rishi Sunak rejected calls for the implementation of a basic income, stating that the government were "not in favour of a universal basic income," whilst Business Secretary Alok Sharma said that the UBI has been "tested in other countries and hasn't been taken forward" 

Economic critique

In 2016, the IGM Economic Experts panel at the University of Chicago Booth School of Business was asked whether they agreed with the following statement: "Granting every American citizen over 21-years old a universal basic income of $13,000 a year — financed by eliminating all transfer programs (including Social Security, Medicare, Medicaid, housing subsidies, household welfare payments, and farm and corporate subsidies) — would be a better policy than the status quo." 58 percent of participants disagreed or strongly disagreed, 19 percent were uncertain, and 2 percent agreed. The cost was an issue for those who disagreed as well as a lack of optimization in the structure proposed. Daron Acemoglu, professor of economics at the Massachusetts Institute of Technology, expressed these doubts in the survey: "Current US status quo is horrible. A more efficient and generous social safety net is needed. But UBI is expensive and not generous enough". Eric Maskin has stated that "a minimum income makes sense, but not at the cost of eliminating Social Security and Medicare". Simeon Djankov, professor at the London School of Economics, argues the costs of a generous system are prohibitive.

Another critique comes from the far-left. Douglas Rushkoff, a professor of Media Theory and Digital Economics at the City University of New York, suggests that universal basic income is another way that "obviates the need for people to consider true alternatives to living lives as passive consumers". He sees it as a sophisticated way for corporations to get richer at the expense of public money.

Some conservatives have contended that universal basic income could act as a form of compensation for fiat currency inflation.

Economic growth

Some proponents of UBI have argued that basic income can increase economic growth because it would sustain people while they invest in education to get higher-skilled and well-paid jobs. However, there is also a discussion of basic income within the degrowth movement, which argues against economic growth.

Employment

One argument against basic income is that if people have free and unconditional money, they would "get lazy" and not work as much. Critics argue that less work means less tax revenue and hence less money for the state and cities to fund public projects. The degree of any disincentive to employment because of basic income would likely depend on how generous the basic income was.

Some studies have looked at employment levels during the experiments with basic income and negative income tax and similar systems. In the negative income tax experiments in the United States in the 1970s, for example, there was a five percent decline in the hours worked. The work reduction was largest for second earners in two-earner households and weakest for the main earner. The reduction in hours was higher when the benefit was higher. Participants in these experiments knew that the experiment was limited in time.

In the Mincome experiment in rural Dauphin, Manitoba, also in the 1970s, there were also slight reductions in hours worked during the experiment. However, the only two groups who worked significantly less were new mothers and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling. Under Mincome, "[t]he reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women".

A recent study of the Alaska Permanent Fund Dividend -— the largest scale universal basic income program in the United States, running from 1976 to the present -— seems to show this belief is untrue. The researchers, Damon Jones from the University of Chicago Harris School of Public Policy and Ioana Marinescu from the University of Pennsylvania School of Public Policy and Practice, show that although there is a small decrease in work by recipients due to reasons like those in the Manitoba experiment, there has been a 17 percent increase in part-time jobs. The authors theorize that employment remained steady because of the extra income that let people buy more also increased demand for service jobs. This finding is consistent with the economic data of the time. No effect was seen when it came to jobs in manufacturing, which produce exports. Essentially, the authors argue, macroeconomic effects of higher spending supported overall employment. For example, someone who uses the dividend to help with car payments can cut back on hours working as a cashier at a local grocery store. Because more people are spending more, the store must replace the worker who started working less. Meanwhile, the distribution of the dividend doesn't affect the international demand for oil and the jobs connected to it. Jones and Marinescu found instead that the larger scale of the program is what allows it to work and not dissuade people out of the workforce.

Another study that contradicted such a decline in work incentive was a pilot project implemented in 2008 and 2009 in the Namibian village of Omitara. The study found that economic activity actually increased, particularly through the launch of small businesses, and reinforcement of the local market by increasing individuals' buying power. However, the residents of Omitara were described as suffering "dehumanising levels of poverty" before the introduction of the pilot, and as such the project's relevance to potential implementations in developed economies is unknown.

James Meade states that a return to full employment can only be achieved if, among other things, workers offer their services at a low enough price that the required wage for unskilled labor would be too low enough to generate a socially desirable distribution of income. He therefore concludes that a "citizen's income" is necessary to achieve full employment without suffering stagnant or negative growth in wages.

If there is a disincentive to employment because of basic income, the magnitude of such a disincentive may depend on how generous the basic income was. Some campaigners in Switzerland have suggested a level that would be only just liveable, arguing that people would want to supplement it.

Freedom

Philippe Van Parijs

Philippe van Parijs has argued that basic income at the highest sustainable level is needed to support real freedom, or the freedom to do whatever one "might want to do". By this, van Parijs means that all people should be free to use the resources of the Earth and the "external assets" people make out of them to do whatever they want. Money is like an access ticket to use those resources, and so to make people equally free to do what they want with world assets, the government should give each individual as many such access tickets as possible—that is, the highest sustainable basic income.

Karl Widerquist and others have proposed a theory of freedom in which basic income is needed to protect the power to refuse work; in other words, if the resources necessary to an individual's survival are controlled by another group, that individual has no reasonable choice other than to do whatever the resource-controlling group demands. Before the establishment of governments and landlords, individuals had direct access to the resources they needed to survive. Today, resources necessary for the production of food, shelter and clothing have been privatized in such a way that some have gotten a share and others have not.

Therefore, the argument is that the owners of those resources owe compensation back to non-owners, sufficient at least for them to purchase the resources or goods necessary to sustain their basic needs. This redistribution must be unconditional because people can consider themselves free only if they are not forced to spend all their time doing the bidding of others simply to provide basic necessities to themselves and their families. Under this argument, personal, political and religious freedom are worth little without the power to say no. Basic income therefore may provide economic freedom which, combined with political freedom, freedom of belief and personal freedom, establish each individual's status as a free person.

Gender equality

The Scottish economist Ailsa McKay has argued that basic income is a way to promote gender equality. She noted in 2001 that "social policy reform should take account of all gender inequalities and not just those relating to the traditional labor market" and that "the citizens' basic income model can be a tool for promoting gender-neutral social citizenship rights".

Women perform the majority of unpaid care work around the world. In fact, if unpaid care work performed by women were compensated at even just minimum wage around the world, this would boost measured global economic output by 12 trillion USD, which is 11% of global economic output and is equivalent to the annual economic output of China, according to a study by the McKinsey Global Institute. Thus basic income would be a way to compensate women for the essential care services they already perform and to raise the standard of living for women who devote a substantial portion of their time to unpaid care work.

Some feminists support basic income as a means of guaranteeing minimum financial independence for women. However, others oppose basic income as something that might discourage women from participation in the workforce, reinforcing traditional gender roles of women belonging at home and men at work.

Poverty reduction

Advocates of basic income often argue that it has the potential to reduce or even eradicate poverty.

According to a randomized controlled study in the Rarieda District of Kenya run by the Abdul Latif Jameel Poverty Action Lab at the Massachusetts Institute of Technology (MIT) on the Give Directly program, the impact of an unconditional cash transfer was that for every $1,000 disbursed, there was a $270 increase in earnings, a $430 increase in assets, and a $330 increase in nutrition spending, with no effect on alcohol or tobacco spending.

Milton Friedman, a renowned economist, supported UBI by reasoning that it would help to reduce poverty. He said: "The virtue of [a negative income tax] is precisely that it treats everyone the same way. [...] [T]here’s none of this unfortunate discrimination among people."

Martin Luther King Jr. believed that a basic income was a necessity that would help to reduce poverty, regardless of race, religion or social class. In King's last book before his assassination, Where Do We Go from Here: Chaos or Community?, he said: "I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income."

Reduction of medical costs

The Canadian Medical Association passed a motion in 2015 in clear support of basic income and for basic income trials in Canada.

British journalist Paul Mason has stated that universal basic income would probably reduce the high medical costs associated with diseases of poverty. According to Mason, stress diseases like high blood pressure, type II diabetes and the like would probably become less common.

Transparency and administrative efficiency

According to Guy Standing's theories, basic income may be a much simpler and more transparent welfare system than welfare states currently use. Standing suggests that instead of separate welfare programs (including unemployment insurance, child support, pensions, disability, housing support), social support systems could be combined into one income, or could be one basic payment that welfare programs could add to. This may require less paperwork and bureaucracy to check eligibility. The Basic Income Earth Network claims that basic income costs less than current means-tested social welfare benefits, and has proposed an implementation that it claims is financially viable.

A real-world example of how basic income is being implemented to save money can be seen in a program that is being conducted in the Netherlands. The city councillor for the city of Nijmegen, Lisa Westerveld, said in an interview: "In Nijmegen, we get £88m to give to people on welfare, but it costs £15m a year for the civil servants running the bureaucracy of the current system". Her view is shared by Dutch historian and author Rutger Bregman, who believes the Netherlands' welfare system is flawed, and by economist Loek Groot, who believes the country's welfare system wastes too much money. Outcomes of the Dutch program will be analysed by Groot, a professor at the University of Utrecht who hopes to learn if a guaranteed income might be a more effective approach. However, other proponents argue for adding basic income to existing welfare grants, rather than replacing them.  Support for basic income has been expressed by several people associated with conservative political views. While adherents of such views generally favor minimization or abolition of the public provision of welfare services, some have cited basic income as a viable strategy to reduce the amount of bureaucratic administration that is prevalent in many contemporary welfare systems.

Wage slavery and alienation

Frances Fox Piven argues that an income guarantee would benefit all workers by liberating them from the anxiety that results from the "tyranny of wage slavery" and provide opportunities for people to pursue different occupations and develop untapped potentials for creativity. André Gorz saw basic income as a necessary adaptation to the increasing automation of work, yet basic income also enables workers to overcome alienation in work and life and to increase their amount of leisure time.

These arguments imply that a universal basic income would give people enough freedom to pursue work that is satisfactory and interesting even if that work does not provide enough resources to sustain their everyday living. One example is that of Nelle Harper Lee, who lived as a single woman in New York City in the 1950s, writing in her free time and supporting herself by working part-time as an airline clerk. She had written several long stories, but achieved no success of note. One Christmas in the late fifties, a generous friend gave her a year's wages as a gift with the note: "You have one year off from your job to write whatever you please. Merry Christmas". A year later, Lee had produced a draft of To Kill a Mockingbird, a novel that subsequently won the Pulitzer Prize. Most proponents of UBI argue that the net creative output from even a small percentage of basic income subscribers would be a significant contributor to human productivity, one that might be lost if these people are not given the opportunity to pursue work that is interesting to them.

Welfare trap

The welfare trap, or poverty trap, is a speculated problem with means-tested welfare. Recipients of means-tested welfare may be implicitly encouraged to remain on welfare due to economic penalties for transitioning off welfare. These penalties include loss of welfare and possibly higher tax rates. Opponents claim that this creates a harsh marginal tax for those rising out of poverty. A 2013 Cato Institute study claimed that workers could accumulate more wealth from the welfare system than they could from a minimum wage job in at least nine European countries. In three of them; Austria, Croatia and Denmark; the marginal tax rate was nearly 100%.

Problems associated with the welfare trap may be aggravated by workplace automation: this is discussed in the article on wage subsidy.

Proponents of universal basic income claim that it could eliminate welfare traps by removing conditions to receive such an income, but large-scale experiments have not yet produced clear results.

Pilot programs and experiments

Omitara, one of the two poor villages in Namibia where a local basic income was tested in 2008–2009

Since the 1960s, but in particular since 2010, there have been a number of basic income pilot programs. Some examples include:

• Experiments with negative income tax in United States and Canada in the 1960s and 1970s.
• The province of Manitoba, Canada experimented with Mincome, a basic guaranteed income, in the 1970s. In the town of Dauphin, Manitoba, labor only decreased by 13%, much less than expected.
• The basic income grant in Namibia, launched in 2008 and ended in 2009.
• An independent pilot implemented in São Paulo, Brazil launched in 2009.
• Basic income trials in several villages in India. whose government has proposed a guaranteed basic income for all citizens.
• The GiveDirectly experiment in Nairobi, Kenya, the longest-running basic income pilot as of 2017.
• An experiment in the city of Utrecht in the Netherlands, launched in early 2017, that is testing different rates of aid.
• A three-year basic income pilot that the Ontario provincial government, Canada, launched in the cities of Hamilton, Thunder Bay and Lindsay in July 2017. Although called basic income, it was only made available to those with a low income and funding would be removed if they obtained employment, making it more related to the current welfare system than true basic income. The pilot project was canceled on 31 July 2018 by the newly elected Progressive Conservative government under Ontario Premier Doug Ford.
• A two-year pilot the Finnish government began in January 2017 which involved 2,000 subjects In April 2018, the Finnish government rejected a request for funds to extend and expand the program from Kela (Finland's social security agency).
• A project called Eight in a village in Fort Portal, Uganda, that a nonprofit organization launched in January 2017, which provides income for 56 adults and 88 children through mobile money.
• Social Income started paying out basic incomes in the form of mobile money in 2020 to people in need in Sierra Leone. The international initiative is financed by contributions from people in the Global North, who donate 1% of their monthly paychecks.
• In a study in several Indian villages, basic income in the region raised the education rate of young people by 25%.

Examples of payments with similarities

Alaska Permanent Fund

The Permanent Fund of Alaska in the United States provides a kind of yearly basic income based on the oil and gas revenues of the state to nearly all state residents. However, the payment is not high enough to cover basic expenses (it has never exceeded $2,100) and is not a fixed, guaranteed amount. For these reasons, it is not considered a basic income.

Quasi-UBI programs

• Pension: A payment which in some countries is guaranteed to all citizens above a certain age. The difference from true basic income is that it is restricted to people over a certain age.
• Child benefit: A program similar to pensions but restricted to parents of children, usually allocated based on the number of children.
• Conditional cash transfer: A regular payment given to families, but only to the poor. It is usually dependent on basic conditions such as sending their children to school or having them vaccinated. Programs include Bolsa Família in Brazil, Reddito di Cittadinanza in Italy and Programa Prospera in Mexico.
• Guaranteed minimum income differs from a basic income in that it is restricted to those in search of work and possibly other restrictions, such as savings being below a certain level. Example programs are unemployment benefits in the U.K. and the revenu de solidarité active in France.

Examples

• Bolsa Família is a large social welfare program in Brazil that provides money to many low-income families in the country. The system is related to basic income, but has more conditions, like asking the recipients to keep their children in school until graduation. Brazilian Senator Eduardo Suplicy championed a law that ultimately passed in 2004 that declared Bolsa Família the first step towards a national basic income. However, the program has not yet been expanded to a full basic income.

• The Rythu Bandhu scheme is a welfare scheme started in the state of Telangana, India in May 2018, aimed at helping farmers. Each farm owner receives 4,000 INR per acre twice a year for rabi and kharif harvests. A budget allocation of 120 billion INR (1.6 million USD as of June 2020) was made in the 2018–2019 state budget. The scheme offers financial help of 8,000 INR (105 USD as of June 2020) per year to each farmer (for two crops), holds no cap on money disbursed to the number of acres of land owned, and does not discriminate between rich or poor landowners. Preliminary results in 2018 were promising for getting farmers funding they need to invest in farming — procuring fertilizers, seeds, pesticides, and other materials. The first phase of the survey concluded that 85% of farmers received checks for amounts ranging from 1,000 INR (13 USD as of June 2020) to 20,000 INR (262 USD as of June 2020) for farmland comprising less than an acre to about five acres, and about 10% of farmers received checks for amounts between 20,000 INR to 50,000 INR (654 USD as of June 2020). Only 1% of farmers got amounts more than 50,000 INR. The spending pattern revealed that 28.5% of farmers opted to buy seed, about 18% spent the money on fertilizer, 15.4% on new agricultural assets including farm equipment, and 8.6% on pesticides. Only 4.4% of beneficiaries said they utilized it for household consumption and an insignificant percentage for repayment of loans. The scheme received a high satisfaction rate of 92% from farmers since other forms of capital investment like welfare or loans had many strings attached to it and would not reach the farmers before the cropping season starts. Other states and countries are following the development of the program to see if they can implement it for their farmers. This is a new type of program that is considered an embryonic UBI or quasi-UBI to replace traditional systems of agricultural support.

• Citizen Capitalism is a supplemental income program proposed by legal scholar Lynn Stout and her co-authors Tamara Belinfanti and Sergio Gramitto of the book Citizen Capitalism: How A Universal Fund Can Provide Influence and Income to All, published in 2019. In the book, the authors propose building a not-for-profit universal fund composed of shares donated by corporations and philanthropists in which every American would receive one share. These shares could not be sold, donated, or borrowed against. However, each "citizen shareholder" would receive an even portion of the net dividends paid out by shares in the fund, therefore contributing to the amelioration of income inequality. Each shareholder would also receive additional influence in the form of a vote (corresponding to their shares in the fund), potentially providing for a significantly expanded degree of citizen engagement in the role of public corporations in American society.

Basic income in cryptocurrencies and as part of social media apps

Nimses is a concept that offers universal basic income to every member of its system. The idea of Nimses consists of a time-based currency called Nim (1 nim = 1 minute of life). Every person in Nimses receives nims that can be spent on different goods and services. This concept was initially adopted in Eastern Europe.

Electroneum is a cryptocurrency project which uses a mobile application to pay users. The first KYC/AML compliant cryptocurrency, Electroneum enables users to mine using their mobile phone through a simulated mining system. The system pays up to $3.00 per month to its users, with the goal of enabling the world's unbanked population with financial freedom. The cryptocurrency can currently be used to purchase mobile top-ups from the South African telecommunications company The Unlimited as well as to transact with any business that has integrated the Electroneum API, or directly between individuals.

In response to COVID-19

Democratic politicians Andrew Yang, Alexandria Ocasio-Cortez and Tulsi Gabbard were early advocates for universal basic income in response to the COVID-19 pandemic. On 17 March, the Trump administration indicated that some payment would be given to non-millionaires as part of a stimulus package. This amounts to $1,200 per adult and $500 per child in the CARES Act, which passed unanimously in the Senate and House and was signed into law by President Trump in late March.

Eleven U.S. mayors plan to establish basic income pilot programs in their cities of Newark, New Jersey, Columbia, South Carolina, Atlanta, Compton, California, St. Paul, Minnesota, Los Angeles, Jackson, Mississippi, Shreveport, Louisiana, Oakland, California, and Tacoma, Washington.

Public opinion

Support for a universal basic income varies widely across Europe, as shown by a recent edition of the European Social Survey. A high share of the population tends to support the scheme in southern and eastern European Union countries, while enthusiasm tends to be lower in western European countries such as France and Germany, and even lower in Scandinavian countries such as Norway and Sweden. Individuals who face greater economic insecurity because of low income and unemployment tend to be more supportive of a basic income. Overall, support tends to be on average higher in countries where existing unemployment benefits are not generous or the receipt of benefits is conditioned on certain job search behavior.  An April 2020 public poll by YouGov found that the majority of the public in the United Kingdom supported a universal basic income in response to the 2020 COVID-19 pandemic, with only 24% unsupportive.

A poll conducted by the University of Chicago in March 2020 indicated that 51% of Americans aged 18–36 support a monthly basic income of $1,000. Support for universal basic income spans the political spectrum, with conservatives, progressives, and libertarians all having camps both for and against basic income.

Petitions, polls and referendums

• 2008: an official petition for basic income was launched in Germany by Susanne Wiest. The petition was accepted, and Susanne Wiest was invited for a hearing at the German parliament's Commission of Petitions. After the hearing, the petition was closed as "unrealizable."
• 2013–2014: a European Citizens' Initiative collected 280,000 signatures demanding that the European Commission study the concept of an unconditional basic income.
• 2015: a citizen's initiative in Spain received 185,000 signatures, short of the required number to mandate that the Spanish parliament discuss the proposal.
• 2016: the world's first universal basic income referendum in Switzerland on 5 June 2016 was rejected with a 76.9% majority. Also in 2016, a poll showed that 58% of the EU's population is aware of basic income, and 65% would vote in favor of the idea.
• 2017: Politico/Morning Consult asked 1,994 Americans about their opinions on several political issues including national basic income; 43% either "strongly supported" or "somewhat supported" the idea.
• 2019: in a September poll conducted by The Hill and HarrisX, 49% of U.S. registered voters support basic income, up 6% from a similar survey conducted six months earlier.
• 2019: In November, an Austrian initiative received approximately 70,000 signatures but failed to reach the 100,000 signatures needed for a parliamentary discussion. The initiative was started by Peter Hofer. His proposal suggested a basic income of 1200 EUR for every Austrian citizen.
• 2020: A public poll by YouGov in 2020 has found that the majority of people in the United Kingdom support a universal basic income, with only 24% unsupportive. In March 2020, over 170 MPs and Lords from all political parties signed a letter calling on the government to introduce a basic income during the coronavirus pandemic.

Prominent advocates

Prominent contemporary advocates include Economics Nobel Prize winners Peter Diamond and Christopher Pissarides, tech investor and engineer Elon Musk, political philosopher Philippe Van Parijs, former finance minister of Greece Yanis Varoufakis, Facebook founder Mark Zuckerberg, eBay founder Pierre Omidyar, and entrepreneur and nonprofit founder Andrew Yang, who ran for the Democratic nomination for the 2020 United States presidential election on a platform of instituting a $1,000-a-month universal basic income.

On 13 March 2020, Democratic representatives Ro Khanna and Tim Ryan introduced legislation to provide payments to low-income citizens during the COVID-19 crisis via an earned income tax credit. On 16 March, Republican senators Mitt Romney and Tom Cotton stated their support for a $1,000 basic income, the former saying it should be a one-time payment to help with short-term costs. Senator Bernie Sanders has called for $2,000 in monthly basic income to help "every person in the United States, including the undocumented, the homeless, the unbanked, and young adults excluded from the CARES Act." House Speaker Nancy Pelosi has also suggested that a basic income could be "worthy of attention."

On 12 April 2020, Pope Francis called for the introduction of basic income in response to coronavirus.