If we're talking about a basic income for just working aged Americans (because kids don't need it and the elderly are already covered by other programs) we're talking about roughly 200M people.
200M * 2000/hours per year * $10 hour = 4 trillion dollars a year.
For comparisons sake the current federal budget is about 3.8T.
The math: US population - 316m, income $10,000/yr, so a basic income for all would be 3 trillion dollars. The entire federal budget for 2014 is 3 trillion.
Just $10,000 per adult is $2.4 trillion. That of course wouldn't come close to being enough. Even if you assume tax redistribution of the money (rich people getting UBI, and then having it taxed away), for $2.4 trillion you probably would only manage to get the poorest 1/4 up to something like $15,000. Today the poorest 1/4 are receiving a net of more than twice that sum between Federal and State benefits.
Federal budget ($3.9 to $4.1 trillion or so depending on which year we're talking about) minus dozens of things that won't be replaced by UBI and won't go away (eg NASA, military, agriculture subsidies, budgets for countless agencies like HSA or FBI, transportation, justice and so on) = you might be lucky to break even or bleed just a few hundred billion on the budget if you allocate $2.4 trillion to UBI. That's assuming Social Security, all housing subsidy programs, all welfare programs, half of all social services programs, Medicare, Medicaid, Obamacare etc etc are all ended.
The equation at the state level is a whole 'nother calculation, and would be a very significant factor given the states budget is another ~$1.7 trillion and represents all sorts of welfare programs and healthcare spending.
Personally I favor Warren Buffett's premise of significantly boosting the earned income tax credit, and freezing or lowering the minimum wage. The UBI is dramatically regressive, there's no reason to be giving the top 50% in the US a UBI.
To pay all adults in the US (240 million) a UBI of $13,000 would require $3.1 trillion. The entire US federal budget (which is still in deficit by $500 billion) is $3.8 trillion. That can't be made up just with a little bit of increased taxation.
Converting $33,600 basic income (assuming this goes to every adult, 210 million people) to the entire population (318 million) is about $22,200 per capita.
Per capita income in the United States in 2012 was $42,693 [1]. Assuming that would remain unchanged, taxes to fund a basic income of $22,200 that would leave $20,500 per capita.
Per-capita state tax collections are already 2,435.11 [2] and federal tax collections are $8,528.22 [3]. Most states have to run a balanced budget but federal revenue only covers about 65% of outlays, so really we're looking at about $13,000 per capita federal spending that eventually needs to be paid for. So subtract $15,435 to cover current outlays.
Now we're at about $5,000 left over to pay for everything else: food, clothes, utilities, rent/mortgage, education, and all the other local taxes that fund essential services, e.g. local sales taxes, property taxes, various other fees and excise taxes.
Even if you did away with other "safety net" programs such as welfare and food stamps because they are replaced by basic income, there simply isn't enough REAL economic activity in the country to give everyone this kind of basic income.
The only missing number here is the US population (320 million). Basic income per month of $1000 gives $320 billion per month, or 4 Bill Gates fortunes.
Current US population: 324 million people, 250 million adults.
Poverty line income: $22,000 for the family of four (it is hard to estimate individual poverty line income, but it's more than $22,000 / 4. Let's say $12,000, which is $1000 / month).
Total cost of universal basic income of $1,000/month for the US: $3 trillion per year.
Total US income tax revenue: $1.8 trillion for personal income tax, $0.4 trillion for corporate income tax.
I like the idea of a Universal Basic Income but running the numbers is eye opening:
£1,500 ~= $2,274
$2,274/person/mo * 12 mo/yr * 300,000,000 people = $8,186,400,000,000/yr. $8 trillion a year to provide that level of UBI to all 300,000,000ish Americans.
Yeah, it does seem hard to make the numbers work. I always get tripped up because I usually wind up around $2-4 Trillion per year, which is like the whole federal budget. Let's see if I'm remembering that wrong.
So we'll give every adult in the United States a basic annual income of $10,000. It's hard to live off of that in many parts of the country, but we should start small. There are about 250 million adults in the USA as of 2016 (245.3 according to wikipedia, but let's keep it round.)
So...yep, that's $2.5 Trillion a year. You can argue that you'd pay for it with a tax on upper earners, but I haven't seen any actual numbers to support the theory that you could raise that amount via taxes on the wealthy. And I don't feel like looking into tax brackets and wages and crap right now.
I also think you're right that your average tech worker should be able to scrape together a 5-figure unemployment/job-hunting backup fund fairly quickly.
First let's take only adults, so it's 230 million, not 318 million population.
And then, let's say for people who earn more than $30 000, or something like that, per year, we increase their taxes the amount equivalent to what basic income would increase their earnings. Now, I am unsure how to estimate the size of this population, because for some reason I easily find only US household income distributions, not distributions per people. But let's guess this removes 60% of the adult population.
So we are left with something like 90 million.
And now we do your calculation: $454.3 bln / 318 = $5000/person/year, or $420/month.
Want to get close to 1000 $/month? Need to increase welfare spending 2-fold
Now what about the kids of undocumented workers? Will people in retirement continue to get their social security? How will we pay for all this? Assuming 418M people at $13K which I typically see mentioned as basic income, that is $4T which is more than the entire US federal budget.
>> There are about 242,000,000 adults living the United States. $18,000/year UBI X 242,000,000 people = $4,356,000,000,000 that’s $4.356 TRILLION Dollars per year. The total amount collected by the federal government from the income tax is about $1.5 Trillion Dollars per year. Since we would still have to run the rest of the government in addition to paying the UBI, the cost of the UBI plus the other government expenses we currently have would be about Six TRILLION Dollars.
So ignoring Medicare / Medicaid / health insurance in general, the current expenditures on social security / unemployment / welfare add up to ~$1.4 trillion, which (given the 235 million adults stated in the article) is ~$500/month per citizen.
I could easily live alone on that in parts of the country. Given that people surviving on said basic income could (and should!) have roommates or spouses, it's even more than necessary.
Near zero. Few are really portraying how expensive this is. $1k a month for every American is just under 4 trillion dollars. For every adult American it would be just under 2.5 trillion. Currently, the entire federal budget is 3.8 trillion dollars. The GDP is 19.5 trillion. We're looking to spend an amount equivalent to the entire federal budget or 10-20% of the whole country's GDP on UBI. Yang's attempt to portraying this as fiscally feasible is based on the assumption that UBI will automagically result in extreme economic growth.
Caveat: Not a professional analysis, and not the OP.
There's 248 million people ages 16 and older in the US, of which 63% are in the labor force[1]. So 156 million people are available for work (not all of whom are employed).
Total population is about 330 million.
If each of them were to get a basic monthly stipend (this is everyone, including infants) of $1200, that's $396 billion per month in payments.
Per working individual, that's a tax burden of $2538 per month. And that's just for this program - there's also the rest of government to pay for. Military, roads, police + fire protection, and so on. This also assumes that the basic stipend replaces all other existing entitlement and welfare programs. Which isn't likely, because politics.
Yes, the working individual will also receive a stipend payment, reducing their net tax burden to $1338. But for an hourly employee, that comes out to about $8.35 per hour worked that goes to tax. Even with the new $10.10 minimum wage proposal, that leaves them just $1.75/hr as incentive to work, vs. just staying home and living off the stipend.
Only about 200m people are over the age of 18 and 20k per person seems high. 200M at 10k per year is around 2 trillion. Seems doable if we are willing to scrap things like social security.
200M * 2000/hours per year * $10 hour = 4 trillion dollars a year.
For comparisons sake the current federal budget is about 3.8T.
reply