It's for the reasons given in your 6th para that I think it needs to be considered... our benefits system has turned into a top-heavy beaurocratic nightmare in the UK. But of course there's plenty wrong with such an idea, for example the interesting question you pose in your 9th about individuals' relative status in Society following on, also what happens if no-one wants to do the dirty jobs. But the idea is that massive simplification in the beaurocracy of the welfare system would yield all the money needed to implement this and far more besides in cost-savings that might also solve our huge shortfalls in NHS funding.
But I don't know about questions of equity... this is fundamental social engineering after all
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