An unconditional basic income is, according to the Foundation National Institute for Budget Information (Nibud), possible from an accounting point of view and would not lead to less work incentives. The new system would lead to an increase in purchasing power between 15 and 50 percent for employees who earn minimum wage or middle-income.
In the new system, every adult with the Dutch citizenship would get 600 euros a month, and an additional 600 euros for households, with an extra grant of 300 euros for each child. As beautifully as it sounds, the plan does not come without consequences. The tax rate for the highest earning incomes would increase drastically and the social benefits would have to decrease with 1200 euros.
Robert Dur, Professor of incentives and performances at Erasmus School of Economics, who researched people entitled to social benefits, also believes that a basic income would be feasible, technically speaking. However, he questions if it would also be desirable. “The way the plan is presented makes it seem that there are only winners if this plan would be realized, but that is not true. People who earn more than twice the average wage will suffer a lot if this plan would be implemented.”
Dur also emphasizes that people do not take into account the change in people’s behaviour. “Research shows that a higher income tax leads to more tax evasion. Those kind of aspects should be taken into account when forming a plan for a basic income.” Dur says it is difficult to predict how people would react to a basic income and believes it might lead less incentive to keep working. He does not believe that the foundation of the plan is strong enough to be actually realized.
The whole article can be found here (in Dutch).
- Professor