Could A Universal Basic Income Work?

Could A Universal Basic Income Work?

Ever since Sir Thomas More first proposed the idea in 1516, the promise of a Universal Basic Income, or UBI, has steadily gained support, now to the point that 48% of americans support a universal basic income, or UBI. The most common libertarian response to this is to scream “Taxation is Theft!” Although true, this is not the most persuasive rebuttal. An ideological response is necessary, but it is also prudent to look at the numbers, and determine whether a UBI could even work.

What Is UBI?

Let’s get the answer to this straight from the horse’s mouth. The Basic Income European Network defines basic income as a “periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.” BIEN goes on to describe five characteristics of UBI. It is periodic, a cash payment, individual, universal, and unconditional.

Although some libertarians have advocated for a UBI, most acknowledge that a basic income would be created using taxation, a method that has obvious moral problems. But regardless of the moral issues involved with a forcible redistribution of wealth, a UBI is not practical.

The Current Viability

The simple answer to why the U.S. can’t provide a UBI is that we’re broke. The Federal government has been running trillion dollar deficits for a few years now, and literally doesn’t have any money to distribute. In 2018, the revenue of the federal government was $3.5 trillion, and its outlays were $4.4 trillion, with a total deficit of $897 billion.

The majority of that budget, however, is some form of welfare: Social Security, Medicare, and Medicaid. These funds would presumably be transferred to the UBI fund instead of the current spending. Approximately 62 percent of federal expenditure, these welfare programs provide approximately $2.7 trillion.

That $2.7 trillion divided among the U.S. population as a UBI, would provide a whopping $8,221 per capita, per year. That’s 14% of the average U.S. income. Personally I would be happy to have an extra $8,000 per year, but we must remember, all that money is provided by taxes or inflation, and some of those funds go to the government, meaning that after paying the funds necessary to make a UBI, there is necessarily less money than if it weren’t run through the bureaucratic process.

The Best Case Scenario

However, most advocates for a UBI don’t support the current tax system. Would a 70% top marginal income tax rate, as promoted by recently elected Congresswoman Alexandria Ocasio-Cortez, provide enough funds for a reasonable UBI?

Mark Mazur calculated that AOC’s proposed tax would raise $720 billion/decade, an insignificant addition to a $2.7 trillion UBI. It would total $8,440 per capita per year, still only about 15% of an average income. Could it help out some households? Yes. Could that help be provided more efficiently through the free market rather than running it through the government machine? Almost certainly. Would it make the country richer? Absolutely not.

Author Bio: Samuel Stettheimer is a regular consumer of popular libertarian publications such as The Mises Institute,, and Currently in high school, he is an adept competitive speaker and debater. Through both cultural development and political influence, he hopes to uphold the principles of Peace, Liberty, and Prosperity in our declining culture. He currently resides in Birmingham, Alabama.

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