A common challenge for UBI advocates is answering the question: Who will pay for it all?
There are many good proposals. There are even proposals that would have no impact on governments’ budgets; including the American Enterprise Institute’s working paper: A Budget-neutral Universal Basic Income.
However, many of these proposal miss one important aspect: more money in people’s pockets means more money being spent. Regardless of whether that money is spent on rent or food, on a coffee in the local coffee shop or a new pair of jeans from that multi-national, a better car or even a better education. These purchases will add to profits, which incur tax. Taxes that flow to the government and thus increase the money available for UBI.
Yes, a UBI will increase the money flow to more people and organisations, which means everyone will be better off and governments can collect more taxes.
The alternative is the system we have right now: With increasing automation and AI, technological unemployment means all the money flows to ever fewer, super rich owners of global mega companies that often avoid paying taxes. Their size and global mobility means, if taxes go up in their location, they simply move to another state or another country; especially one that allows them to automate even more and doesn’t have pesky unions limiting their use of AI.
The result: Less tax to the government, and less money for our UBI.
Let’s make UBI happen before it’s no longer affordable!
Any questions, please add a comment and I’ll get back to you by the end of the week.
Marcel Admiraal