Keith Rankin has an overview of the UBI arguing that it is basically a zero-cost reform of the tax system:
The way to do this is to tax all income at source at an appropriate rate – say between 33% and 37% – and to distribute a substantial proportion of that revenue, equally, to public equity beneficiaries. It’s that simple conceptually, and our present income-tax systems are much closer to this ideal than we realise.
In New Zealand it would not be a fiscal revolution to tax all income at the same 33% rate and to ensure that every tax-resident adult received in return at least $175 each week from public revenue; it would in traditional terms be equivalent to a tax cut for some people. (It would, however, be a conceptually revolutionary change for academics, politicians, public servants and journalists to think through.) For maybe half of New Zealand tax-residents the only change they would see would be in the itemisation of their pay-slips, or their benefits. For most of the rest, there would be an extra after-tax income of a few dollars per week.
I guess this is conceptually revolutionary because I honestly don’t understand it. Most people pay effective tax rates quite a lot lower than this on the bulk of their income. So this sounds like a plan to raise people’s taxes and then pay them the money back again, with the half on lower incomes getting a bit more. At no cost, somehow. Do I have that right?