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Joined 2 years ago
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Cake day: May 13th, 2023

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  • The way these are usually envisioned long term is that tax rates go up to progressively eat up the universal payment.

    @Kichae I agree there are many UBI schemes that don’t really deserve the name for various reasons. A true universal basic income, however, could never be eaten up by tax for whatever group of people exactly because it’s universal and basic.

    A possible scheme, for example, would be that a UBI of 1,600 is guaranteed by the state, while every income above the UBI level is then taxed. So if you earn 2,000 and the tax rate is 40%, your tax amounts to (2,000 - 1,600)*0.4 = 160.

    An income of 1,600 would mean you pay no taxes at all as the 1,600 is the UBI, and any income below 1,600 triggered a negative tax rate (for example, if one earned 1,000 they would be given 600 from the state).

    In a nutshell: a real UBI can never be lowered by tax or any other public measures. Practically all researchers agree that this a very important feature of any UBI, no matter how it is designed.