Three ways to do a UBI: None are feasible
By Scott Sumner
There’s been a lot of discussion about the advantages of a universal basic income (UBI), which might involve giving everyone an income of say $10,000 or $12,000/year. I’ve written on this before, here I’ll just provide a very short and sweet explanation for why it won’t happen. Start with the two ways of doing a UBI:
1. Add on to existing social programs. This would require a mind-bogglingly large rise in taxes ($3 trillion?), and would in the end fail to deliver the required tax revenues for standard Laffer Curve reasons. AFAIK, no country raises the sort of tax revenue (per capita) required to finance a UBI in the US, if added to existing programs.
2. Replace existing programs with the UBI. There are two versions of this idea, neither of which would work:
a. Replace all social welfare programs with a UBI. This is a complete nonstarter politically. As soon as you start talking about taking away the public’s Social Security, Medicare, veterans benefits, etc., people would freak out.
b. Replace only those social programs aimed at poverty reduction. This would allow for only a very small UBI, far too small to eliminate poverty. It might be worth doing, but it’s not a UBI as most people think of the term.
So there are three options; 1, 2a, and 2b. None are feasible. There’s no point in even discussing a UBI, it won’t happen.