An evaluation of a strictly revenue neutral citizen's income scheme

A Citizen’s Income - an unconditional and nonwithdrawable income for every individual - would offer many advantages: but because the UK's current benefits and tax systems are complex, transition to a benefits system based on a Citizen's Income could be difficult to achieve. Two previous EUROMOD working papers have studied some of the effects and financial feasibilities of a variety of Citizen's Income schemes.2 The advent of EUROMOD G3.0, and the availability of new FRS data, has made possible a more up to date evaluation of one of the schemes discussed in the second of the earlier working papers: a strictly revenue neutral scheme that could be paid for by raising Income Tax rates by 3%, by abolishing Income Tax Personal Allowances, and by making adjustments to National Insurance Contributions, and that would leave in place the existing social security structure and reduce households' means-tested benefits by taking into account their Citizen's Incomes. The earlier working papers show that such a scheme would impose almost no disposable income losses on low income households at the point of implementation, and would impose only manageable losses on households in general. This new working paper updates the previous research on such a scheme, offers a variety of additional evaluations, and studies the possibility of paying a Citizen's Income to a single year cohort as a first step in rolling out such a Citizen's Income scheme to the entire working age population.