I had previously moved more towards a negative income tax approach rather than a universal basic income. The latter seems to be consistently found to be too expensive to implement universally, and how does it make sense to give the basic income to someone who’s currently a billionaire or even a millionaire? (Ok, if a former millionaire loses it all and ends up deep in debt, that’s a bit different, but that’s why I’m limiting to current millionaires.)
That’s why I found this,
which found it is possible to halve previously projected costs while maintaining or even increasing its poverty-reduction impact.
To be so intriguing. Alas,
The PBO, therefore, confirms the P.E.I. report’s conclusion that it is possible to roughly halve the cost of a basic income program for Canada and each province by using the economic family definition instead of the nuclear family.
Basically, the use of the artificial “economic family” standard is what justifies giving lower payments to these folks. So the proposal saves money by … refusing to spend extra money.
Since housing is so expensive right now, many more are living together than we’d normally see otherwise, so I think today’s “economic families” are a bit artificially inflated. If a UBI based on this did go through, I’d expect folks to start moving out of their parents homes to qualify for additional basic income - which would legitimately help them afford their new places, but also cause the programme’s costs to skyrocket.
I don’t think the above was accounted for properly. Don’t get me wrong, I’d love to see a UBI or an NIT come to fruition, and Canada does have a working example of this from the past: https://en.wikipedia.org/wiki/Mincome
But having a badly designed proposal tried and failed would hurt the movement, so we have to look at these ideas closely. Ultimately, I don’t see that the “economic family” concept makes sense, and without it the cost of the programme doubles. Perhaps it still works, but be prepared to fund it at double the stated level, don’t let that rise catch us by surprise.
In fact it might all be taxed away for those who are actually rich.
I’d go a couple of steps further. Those rich enough (so not just the richest but perhaps everyone who’s even slightly rich) should have the UBI fully taxed away. Another way to put this is that their taxes after UBI should = taxes before UBI + cash value of UBI
So if this was just some kind of accounting gimmick then this would be perfect.
The issue from what I understand is that real money - the 1000 in your example - has to be sent into the richest person’s bank account (or equivalent money-receiving receptacle) before getting retrieved by being taxed back. Perhaps we could do something like saying UBI is paid out annually and only given the day before taxes are due to be paid in order to minimize the amount of time this money is floating out there - but the issue is that it still costs real money to pay everyone, even the richest of the rich, this UBI, only to claw it back again in full later. (At most, some higher middle class folks might gradually get less and less than the full amount of the negative income tax/basic income, until we get to zero.)
So it’s not the most efficient way to handle money. By contrast, with a NIT we avoid needing to have that extra cash to move around - we’d only have to give the basic income to those who wouldn’t qualify for this claw back. That frees up funds, real money. The catch is that we’d need some bureaucracy to deal with it - but by making it part of the income tax, the existing taxation bureaucracy can deal with it, hopefully minimizing this aspect of the cost. We’d likely have some costs here anyways as part of the “sorting out a proper taxation system” prereq for a true UBI, and the hope is that a NIT wouldn’t cost more than that.