What role for an individual tax credit?

The Netherlands already have universal (i.e. non-means tested) systems of child benefits, of student grants and of non-contributory basic pensions, in addition to one of the world’s most generous and comprehensive means-tested guaranteed income schemes. In January 2000, the Dutch Parliament approved the essentials of the government’s plan for a comprehensive tax reform incorporating the replacement of the exemption on the lower income layer by a strictly individual tax credit at a level of about Euro 140 per month for all families with at least one worker (see Boerlage 1999). Gradually increased and made individually refundable (so that a worker’s non-working partner, for example, would be entitled to a cash payment equivalent to the credit rather than have the working partner doubly credited), this «negative income tax» for working families would provide the last missing element for the provision of a universal income floor. It could then be painlessly integrated into a low, but strictly individual, universal and unconditional basic income. Of course, even at a significantly increased level, this would remain a partial basic income, which would need to keep being supplemented, et any rate for single-adult households, with residual means-tested assistance.