The Financial Feasibility and Redistributive Impact of a Basic Income Scheme in Catalonia

In this paper we present some provisional results of a research project which aims to show how Basic Income is economically feasible in Catalonia and how it would have a strong redistributive impact on income distribution. We use a micro-simulation program specifically designed for this aim in order to evaluate different policy options of tax-benefit integration which involve a Basic Income, and we apply it to an extensive sample of Catalan income tax payers data. The results show that the proposed reforms are broadly feasible in financial terms, and that their impact on Catalan income distribution would be strongly progressive. However, the political feasibility of the reform still remains as an open question. INTRODUCTORY NOTE The study we are presenting in this paper is still being developed as a research project financed by the Jaume Bofill Foundation (Barcelona) under the title “Feasibility and Impact of a Universal Basic Income in Catalonia”. The project, which is to be finished at the end of 2004, is the first empirical attempt to investigate the economical and political feasibility of a Basic Income scheme in Catalonia, and the authors intend to launch it as a concrete political proposal into the Catalan political agenda. The following results are then to be considered as provisional ones. The microsimulation model we present has been reshaped and modified many times and is still being so. This is the first public presentation of some of the results of the project. The authors will be glad to receive any comment, criticism or suggestion.