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MONTREAL ― A basic income of $22,000 a year to all adult Canadians is financially doable, and would nearly eliminate poverty in the country, a new economic analysis argues ― but not without tax hikes for higher earners and a higher corporate tax rate. The analysis from the Basic Income Canada Network (BICN) used a simulation database and model from Statistics Canada to predict how three different basic income programs would work. It picked $22,000 as the level because it’s an approximation of the cut-off point for a number of measures of poverty. It found all three options would virtually eliminate poverty in Canada, with the share of people living below the low income cut-off dropping by as much as 95 per cent, depending on the program type. Families in the bottom 10 per cent of earners would see their disposable incomes jump by 3.5 to 4.5 times current levels. The country would also see an immediate and significant shrinking of the income gap. The BICN report was released on Thursday. Watch: Ontario’s basic income pilot project was “a blessing” to these small business owners. Story continues below.

Part of the point of the analysis was to address concerns ― even within the basic income movement ― that a workable basic income could be designed, said Sheila Regehr, chair of BICN. The analysis showed that “there are ways of doing this (that) meet our objectives of reducing poverty, inequality and insecurity,” Regehr said in an interview with HuffPost Canada. The analysis found a large part of the cost can be covered by shuffling around money from existing federal and provincial programs that would be made redundant by a basic income, such as the Working Income Tax Benefit and the GST/HST credit. But it would still require additional revenue to keep it from driving up deficits.

The proposed basic income programs would raise $17.4 billion in revenue through a variety of policies championed by progressive economists as ways to address rising inequality. This includes hiking the corporate tax rate to 15 per cent from 10 per cent and the small business tax rate to 13.5 per cent from 10.5 per cent. That would return those tax rates to levels they were at earlier this century, before successive rounds of cuts. And in a move that would ruffle the feathers of higher earners, capital gains ― increases in the value of investments ― “would be treated the same” as income earned from work under the proposed options. Currently, only half the value of a capital gain is taxed as income. People’s principal residences would continue to be exempt. It would also mean higher income taxes for some. Those in the top 10 per cent of earners ― with an income above $148,000 ― would see their disposable income cut by between 7.2 and 10.2 per cent, depending on the type of basic income. No benefits above $60,000 But even some who consider themselves solidly middle earners would see higher taxes, thanks to the elimination of some tax breaks and higher tax brackets. The basic income’s benefit would fade completely at around the $60,000 income mark, and those above it could expect to see some increase in taxes. Earners in the $60,000 to $80,000 range would see a reduction in disposable income of between 2.9 and 6.9 per cent, depending on the type of program, the analysis found.

It’s to (corporations’) advantage to have a population that’s stable, where people are able to get a good education and to be consumers for the things they are making. Sheila Regehr, chair of BICN