A Universal Basic Income will not cost $3 Trillion per Year

A Universal Basic Income (UBI) is a proposal to pay every citizen of a country - the United States in this case - a fixed stipend every year. This money would come from increased tax rates. Some opponents of the idea cite its cost, pointing out that a $10,000 UBI would cost $3 trillion per year. However, the real costs are much lower, and very achievable.

To give a small example, consider Amy and Bob. Amy make $15k/yr, and Bob makes $5k/yr. Being equitable people, they agree on a $5k/yr UBI, as well as a flat tax of 50% to pay for it. In a particular year, Amy pays $7.5k, and Bob pays $2.5k. Though the total tax bill is $10k, the real cost is only $2.5k: the only one paying is Amy, with her $7.5 tax bill offset by the $5k UBI stipend she is paying herself. Similarly, Bob's entire tax bill is paid back twice over. It may look a little strange for everyone to be paying themselves, but this allows the implementation of a UBI to be quite simple by making use of the existing tax code.

The situation for the United States is the same, with a $10k UBI costing approximately $750 Billion, rather than the nominal $3 Trillion. In real terms, this amounts to just one fifth of Federal tax revenue each year, rather than doubling it. Additionally, many existing welfare programs would be partially or completely redundant, and would be scaled down or eliminated entirely, further reducing the cost of implementing these proposals.

Should the United States implement such a system, we would be entering into some unexplored social territory, where so many of the previous assumptions we have regarding work and incentives are torn away. However, it's important that we are all on the same page regarding when discussing these ideas, to avoid wasteful discussions based on simple misunderstandings.