How is UBI funded? Is it significant taxes on corporate entities? And will adopting UBI be super challenging for a consumer economy like the US that depends so much on discretionary spending?
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Funding a ubi wouldn't be that hard if we only cared about the kinds of things that get cheaper with time. Right now our federal tax rate is enough to cover 10k/year/pp (though nothing else), but if actually taxed the wealthy as much as we tax the middle class (for example, if we had a higher capital gains tax on public share sales, reducing the amount earned by the class of people who produce no real value and just earn money from stock growth), we could bring in enough to give out 5k/year/pp pretty easily. If everything that matters in life were getting cheaper the way computers and food did over the last half century, 5k/year/pp would be a good start, and as we got richer we could afford more.
But some sectors of the economy get more expensive with time, and those are what are killing us now and what prevents the UBI from being a good idea (before we fix them). Housing, Healthcare, education and childcare absorb more money every year and faster than the economy grows. Give people more money and those sectors just find ways to charge more. If we can't fix the way they do that, we get poorer in reality no matter how much more money we earn.
I realize this isn't how a lot of folks view things. To see it through my lens, imagine for a moment how wealthy we'd be if housing cost less than it did fifty years ago. If healthcare did. If education did. That's the world Keynes imagined, where we could be working 15 hour weeks (probably actually 25 hour weeks, but still) and still feel rich.
> but if actually taxed the wealthy as much as we tax the middle class
The top 10% of earners paid 74% of all income taxes. The top 25% paid 89%.
85% of all fed tax revenue is either income tax, corporate income tax, or SS taxes (on income).
What's your point? I think you're trying to argue that we tax the wealthy as much as the middle class, but this claim doesn't support that. The 10th percentile of earnings in the US is 190k. The 5th is 290k. The 10-5th percentile is reasonable to class as "upper middle class" in many high cost locales.
5th percentile plus might be a reasonable proxy for wealthy, but even if they pay half of income tax receipts, that's not proof that we tax their income as much as we tax the middle class's. Income for the top 5% is on a power law curve. The top 1% starts at 850k - if they contribute twice as much as someone at the top 5, (290k), their percent is still lower.
Meanwhile, capital gains are taxed lower than ordinary income, and the wealthy make most of their income from capital gains. And the most exotic loopholes for reducing taxes on wealth are most available for the ultra wealthy.
If someone earning 5m/year pays 1m/year in tax, they should fire their accountant. And also they're paying less in tax than most upper middle class folks by percentage.
How is UBI funded?
Through taxes of course. And that means the tax rate will have to be something like the reciprocal of the velocity of money. But when people are handed the money for nothing, and then buy direct from a huge vertically integrated supplier it will have to be taxed 100 percent. The Laffer curve becomes relevant here.
I've never seen even a simple algebraic model of how UBI can possibly work.
In my mind (and possibly in the real world?) it works like this:
A company makes a 10% profit after paying huge labor costs, and we tax that profit to pay for our collective needs. The company all but eliminates labor costs with AI, and profits soar to 90%. We tax that profit to pay for our increased collective needs.
I'm by no means an economist nor do I pretend I have the answers to the questions.
But my initial view of UBI is to ensure that people can afford their basic necessities.
I've heard plenty of ways to which UBI could be funded - including taxation against the robots and AIs that take on the labour that used to be done. Is that practical in the short term? Probably not, but the whole article is about thinking about and planning for these future scenarios.
I don't know what the answer to UBI funding is, but that's sorta the problem in the first place. We haven't planned enough for that world.