A 0.1% FTT would provide an Unconditional Basic Income at 50% of median income for the entire world's population

Yes! I'm not kidding.

Readers of my blog are probably already aware of the fact that I am a big fan of having an Unconditional Basic Income. When people hear about the idea, they often ask two questions:

• How do you decide what the rate should be? 
• How do you finance it? 

In this post, I would like to suggest that we could decide to fix the rate at 50% of the median income in every country of the world.

How much would that cost? Well, Gallup has published figures for median per capita income for 130 countries, that together account for 7 billion of the total world population of 7.5 billion inhabitants. Gallup's figures can be found here.

I took those figures and multiplied them by the population of each country individually, and then added all the numbers together to get the total cost of providing a basic income at 50% of median income for every man, woman and child in all 130 countries.  The table is ordered by Median Per Capita Income. You can find the full data set as a google sheet here.

The bottom line is that providing a Basic Unconditional Income at 50% of median income would cost $10.6 trillion. This is certainly a very large number. But it is a number that is much smaller than the conservative numbers for the volume of global financial transactions provided by the Bank for International Settlements. Thier figures for 2015 were almost $10 quadrillion, a number that is nearly 1000 times larger (a quadrillion is one thousand trillions). 2015 was no exception - over the last ten years, the total volume of transactions was over $100 quadrillion.

I note that 50% of median income for every citizen is actually very generous, because the population figures include children who would not be working normally. This means that a family of four would be getting twice the median income, which is quite possibly too much. Halving the rate to just 25% of median income would reduce the cost to $5.3 trillion. But you might also decide to not give the income to children (so as not to encourage people to have extra children. There are clearly lots of options there, and I don't want to go into the various options here.

Instead, and for the sake of argument, let's suppose that we decide to stick to a true Universal Basic Income at 50% of median income. Imagine that some intelligent world leaders at the United Nations or at the IMF or World Bank decided to impose a modest 0.1% levy on every single electronic financial  transaction across the planet, and then directly redistributed all the revenue to citizens as a basic unconditional income. You could effectively virtually eliminate world poverty at a stroke.

I suppose that you could argue that it is unfair - that places like Norway where the median income is highest would get more than they deserve. But, anyone who has been to Norway knows that the cost of living there is such that Norwegians would not actually be that much better off.

A more interesting point would be to look at where the money would end up. The following table shows the countries that would be the biggest net winners - with more than $100 billion each.





The US gets most, with China next, followed by Japan, Germany, India, the UK, France and Russia.  This is actually pretty good news, because all of them will be naturally interested in getting the scheme in place!

I like ideas that are fair. And for me, this is about as fair as they get.

We could literally eradicate world poverty at a stroke. We would no longer be forced to read headlines telling us that the 8 richest people on the planet have as much wealth as the poorest 50% of the world's population.

Of course, the bankers and traders responsible for the bulk of the €10 quadrillion a year of transactions will probably say that any form of Financial Transaction Tax will mean that they will all stop making those transactions, and so my proposal won't work.

To that, there are a few simple answers.

First, the UN (or whoever is responsible for imposing the tax) could simply increase the rate to compensate. After all, 0.1% is nothing compared with the 2.75% I get charged by my credit company when I make a purchase in another currency. If the tax really does apply everywhere, and there is no way to avoid it by relocating, the trading would probably keep going - perhaps at reduced levels.

Second, under the current system, the banks responsible for doing trillions of dollars in transactions every day can always create some more money if they start running out! After all, it is the commercial banks that are responsible for creating the vast majority of money in the current system. If they did, they would be effectively using their money creation ability in the general interest, rather than just for their clients.

Third, the traders might actually realize that when they make their transactions and pay their 0.1% or whatever, they are actually doing their bit to eliminate poverty and inequality in the world. Hey, they might even be able to look at themselves in the mirror.

The amazing thing about this very simple proposal is that, by putting some $10 trillion into the pockets of the world's citizens every year in the form of debt free money there would be a clear path to solving the entire global debt problem. Remember that total debt in the world is currently over $200 trillion. 20 years of the sort of redistribution I am proposing here, and we would be living on a sane planet where almost everyone could be out of debt.  That surely has to be a good thing.

Note added 1st Feb 2017. I just found out that the world's first conference on the idea of a World Basic Income is taking place this weekend in Salford UK. Good luck to them!