Like Basic Income? Meet Basic Tax Control

So, you’ve heard of the idea of a Universal Basic Income: everyone in the country receives an unconditional amount of money that is enough for them to live on, for no other reason than being a citizen of the country. This money can help you sustain yourself while looking for a job, setting up a business, going back into education, or caring for a family member. It would allow everyone in the country to do what they want to do, not what they have to do to maintain a steady income.

That sounds like a good idea, I hear you say. Why, yes it does: we’ve written about it here, here and here.

What we’re concerning ourselves with here is Universal Basic Income’s cousin. That’s right — Universal Basic Income has a cousin: it’s called Basic Tax Control.

Basic Tax Control is a new idea expounded by writer Gris Anik. This is how it works: every month a small percentage of the government’s tax budget would be given to every citizen of the country over a certain age. Anik suggests this might be around £5 a month in the UK: in total, around £285 million per month would be used in the scheme, or 0.13% of GDP a year.

Giving cash to people? So far, so #basicincome, right? Well, this is where things get interesting. Rather than doing what they please with their £5 monthly sum, people must invest the money in a business or other organisation that works in an area of public policy.

The clue is in the name: Basic Tax Control would give people a direct say over how some of their taxes are used. They can be used to fund causes that are close to someone’s heart or help fund a solution to a local problem when government is being sluggish. Though £5 a month seems small, added to other people’s £5s it can make a big difference. In addition, £5 is only the bear minimum someone could receive: if it were successful, the government could hand over more money to citizens and allow them to to decide what to do with it.

Basic Tax Control has become a possibility now because of improved communication technology. Online platforms like Kickstarter show that projects can be funded extremely quickly and efficiently when using crowds’ money. Basic Tax Control would have a similar online platform where people can choose where to spend their tax money, though this website would be publicly owned.

There are many benefits to Basic Tax Control. First, public projects are directly accountable to the people who fund them, rather than a government organisation that may have ulterior motives; if the project performs poorly, then future funds can be withdrawn quickly. It also allows people to fund projects that they care about.

In addition, Basic Tax Control would strengthen the democratic process by giving ordinary citizens an active role in governing. For the first time, citizens would have a direct say over where some of the country’s tax funds are allocated, giving them a better sense of the compromises that governments come to when allocating funds. This should hopefully lead to a more democratically aware and better informed public.

Basic Tax Control would also shape how businesses and other organisations operate. When it comes to public works projects or providing public services, most of these groups either deal directly with governments through contract work, or try to appeal to a reluctant public for money.  Under a Basic Tax Control system, organisations appeal to a public who are compelled to spend their funds; they would be competing with other businesses and organisations for the public’s attention. This would mean the organisations with the best track record (as well as the best communications and data management) would attract the most funds for their projects.

Above all, Basic Tax Control would make people feel part of a shared society that they have a stake in. There is a recognition that for them to succeed the country must succeed, and they can take part in making that happen. A national community could be built up around a shared experience of Basic Tax Control.

As with all new ideas, there are a couple of issues with Basic Tax Control too. Like anything that relies on a form of direct democracy, there is a danger that the system descends into mob rule: that the majority of people make decisions to the detriment of minority groups and viewpoints.  A project based on catering for the needs of a minority religious group could be starved of funds if the majority ignore it, for example. This raises questions over whether Basic Tax Control could splinter society further than it already is currently, rather than bringing it together for a common endeavour. Anik addresses this issue in his latest book.

Linked to this, you cannot expect people to always behave rationally: people may give money to a cause that is close to their hearts at the expense of a project that needs the money more and has the capacity to do greater good. Indeed, as platforms like Kickstarter have shown, people often invest for the novelty, not the utility.  This could create problems of supply and demand, where projects that need little money are inundated while those that really need more money languish. Some oversight of the platform may be required.

However, these problems are smaller than the possibilities that Basic Tax Control offers — an opportunity to support innovation and build our society together is something to relish, not fear. At the very least, as with Universal Basic Income, we should start to think about implementing some Basic Tax Control pilots to see what the impact of it would be. As we’ve written about before, people need to gain more control over their own lives and over their institutions; Basic Tax Control would be a great step in that direction, and if the economics of the plan work out then we’re all for it. At a time when trust in government is lower than ever, Basic Tax Control would allow the public to re-engage in politics in a way that genuinely empowers them to make decisions.

What’s that? How does all this relate to Basic Income? Well, first, Anik suggests that Basic Tax Control would be a way to fund a Basic Income. In our understanding of Anik’s proposals, the businesses taking part in the Basic Tax Control scheme would be compelled to themselves invest in a Basic Income scheme through Basic Tax Control’s online platform. Basic Tax Control could also be used to directly fund Basic Income pilots and other related projects. In this way, Anik appears to consider Basic Tax Control and Basic Income are inextricably linked: Basic Tax Control is there to support the funding for a Basic Income. We may go into further detail of how this might work at a later date.

In addition, conceptually the two ideas are two sides of the same coin. Both empower citizens: Basic Income gives people more control over their own lives, while Basic Tax Control gives people more control over how their country is governed.  While Basic Income focuses on giving individuals more freedom to live their lives how they want, Basic Tax Control focuses on the communal and societal benefits of giving people more control over the process. Together they would bolster two of the most important ideas of our part of the world: freedom (Basic Income) and democracy (Basic Tax Control).  With people increasingly feeling like they have little control of their lives and with trust in democracy faltering, a system that combines these two ideas could be well worth investigating.

Welcome to the family, Basic Tax Control!

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Jack Perry

Jack is a trustee of Citizen's Basic Income Network Scotland.

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