This is not a new post, but with all of the talk about universal basic income lately I wanted to put it back there. no one seems to look at old on Steemit like they do on other sites.
After looking in to it the only way I can see universal basic income (UBI) working is with a 50% federal income tax across the board. No deductions, no exceptions. That being said with $1,197.83 in UBI coming in each month, who cares. Working will be optional for most people. I should note that the UBI income it's self will not be taxed, but all other income will be subject to the 50% tax. Let's follow the numbers from 2016, for example, US gross domestic product was 18.62448 trillion dollars. Take 18.62448 divide in half, and 50% of US GDP is 9.31224 trillion. Now subtract 3.4 trillion for single payer health care (Something that seems to go hand and hand with UBI) and you have 5.91224 trillion. Subtract the us federal budget of 3.871 trillion minus redundant programs such as, health care 1.107,446 trillion, social security 944.338 billion, and income security/ entitlement programs 546.35 billion. You are now left with 1.272866 trillion for government operating expenses. Subtract that 1.272866 trillion from the above 5.91224 trillion and it equals 4.639374 trillion. Now divide that by the us population 322.762018 million round to the nearest dollar and you get 14,374 dollars. Divide one more time by the 12 months of the year and you arrive at $1,197.83 a month. I that wasn't to hard to fallow.
The one flaw I see in my own plan is that if this plan were to be instituted today with the high amount of people needed in the workforce to make our economy function it would probably lead to runaway inflation. Companies would have to entice people to work when they're already receiving a UBI and have to pay a 50% income tax on wages. Even wages for fast food workers may go as high as $20 to $30 an hour and with the wages being as high as they are businesses will pass these costs on to the consumers which will then decrease the real world purchasing power of the above mentioned amount of UBI. The UBI would again be raised with the increased revenue from the 50% tax now being on $20- $30 an hour jobs as opposed to $8- $9 an hour jobs from before. and this cycle just continues causing runaway inflation. In order for this system to work we will need a high level of unemployment, most likely technological unemployment, before a plan like this could be instituted. With only a small work force needed to run the economy in our more automated near future. Wage increases that would be a natural result of UBI should lead to negligible amounts of inflation.
Source information
US GDP
https://tradingeconomics.com/united-states/gdp
Health care costs
https://www.cnbc.com/2017/06/23/heres-how-much-the-average-american-spends-on-health-care.html
Us budget info
https://www.fool.com/investing/general/2016/02/13/the-2016-federal-budget-where-the-money-really-goe.aspx