Hi Zachary — UBI schemes are all over the map — Free Money For Everyone? — Give Money Only To Low-Income People? — Pay A Set Amount? — Pay The Difference Between Their Earnings & A Set Amount? — Changing the Ratio Of Free Money to Earned Money? — A Negative Income Tax?
A very common UBI proposal is that everyone including millionaires gets the same amount. That’s the scheme this article was directed to. Other UBI ideas are for limited payouts to those on the bottom. I discussed plans like yours in this article: A Guaranteed Minimum Income Is The Wrong Answer To The Right Question
Payroll taxes pay for both Medicare and Social Security. They are projected to go negative in a few years. Using 100% of the payroll taxes would still not be enough to even pay for a UBI just for people over 66 and Medicare for people over 65. Even just for that elderly group 100% of the payroll taxes is insufficient.
That means you’re going to have to fund the UBI for people under 66 from the income tax/corp tax which means massive payments from sources that are now already insufficient to run the government we already have.
Even if your $900 billion number is correct that’s 60% of the current budget. Since defense already gets 50% of the budget you’re already at 110% of federal tax revenue. You’ve already broken the bank with just these two programs without funding any other federal activities.
Now if we add in the cost of some kind of medical care/insurance for Americans at several hundred billion/year it’s very, very clear that the UBI proposal for only low income people is totally impossible without close to a trillion dollars in new taxes. Or more because employment is expected to fall with a consequent drop in payroll taxes.
Today we have people screaming about food stamps and Obamacare being a waste of tax money. Imagine the response you’ll get when you tell them that you’re going to increase income and corporation taxes by $900 billion dollars (60%) so that you can give money to poor people.
In the real world this scheme is totally impossible. I present a better way to solve the low income problem in the article I referenced above.