That is, according to Widerquist, the $2-3 trillion projections are just bad math. These simplistic calculations involve multiplying the number of people in America (roughly 330 million) by the average UBI output (approximately $10-12k). While they accurately assess the amount of money that would be involved in such a system, they aren’t accounting for the fact that most of that money will be exchanged via the tax system (many people will pay into it, but they will also get that money back, effectively nullifying the need to generate “new” revenue), meaning that the total amount of new revenue that the government actually needs to generate is only about $539 billion, or roughly 3 percent of GDP. That new revenue, according to Widerquist, could mostly be generated by taxing America’s richest families and would help pay for basic income for some 99 million people, or roughly a third of the U.S. population.
When looked at this way, Widerquist says that a national UBI system would be a relatively small part of federal spending. “The net cost of this UBI scheme is less than 25% of the cost of current U.S. entitlement spending, less than 15% of overall federal spending, and about 2.95% of Gross Domestic Product (GDP),” his 2015 article claims. “The average net beneficiary is a family of about two people making about $27,000 per year in market income.”
The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax
Exactly. That’s a big part of what I’m talking about w/ taxing stock options. That’s how most extremely wealthy people get compensated (most C-Suite level people), so attacking that is the best way to get revenue from them.
That doesn’t solve the “growth” problem, but they tend to donate a ton to charities (see Bill Gates and Warren Buffet for huge examples), so we’re still getting a public benefit from those shares. If we want to target property, we can look at increasing property taxes (e.g. Land Value Tax).
However, even if we took every penny from billionaires, we could fund our budget deficit for ~3 years, or everyone could not pay taxes for one year. Taxing the super wealthy isn’t going to solve our problems, and it’s going to be an uphill battle.
Instead of that, we can look at options that don’t change how much taxes they pay but instead make more efficient use of the taxes we do pay. So the options to me are:
The second option sounds a lot more attractive to me… We just need to convince the middle class that they’ll still be fine with the change.
I’m still on team tax the wealthy AND lift everyone out of poverty. It’s not an either or situation.