UBI costs turns inequality—raised taxes plague the welfare state

If significant tax hikes aren’t viable, then the question remains: what gets cut in order to fund UBI? Under this scenario, UBI becomes stingy and punitive, as a vast amount of important government programs would be on the chopping block.

Murray, the conservative UBI proponent, recommends that a $13,000 annual basic income replace all social assistance programs. Consider the value of the benefits people would lose: Medicaid, Medicare, Disability Insurance, the Children’s Health Insurance Program, Social Security, Supplemental Security Income, Unemployment Insurance, SNAP, Section 8 housing vouchers, Pell Grants, the Earned Income Tax Credit, Temporary Assistance to Needy Families. As Dylan Matthews writes, “$13,000 a year doesn’t mean much if you lose insurance that was paying $60,000 a year on chemotherapy.”15

Even a UBI that retains much of the existing social safety net could hit the disadvantaged harder, depending on which tax credits and government assistance programs get cut. Stern listed the Supplemental Nutrition Assistance Program (SNAP), the Earned Income Tax Credit (EITC), and housing assistance as potential policies to end in favor of UBI. But consider one example. In Queens, New York, a single, low-income working parent with three children can receive up to $31,100 worth of benefits annually from SNAP, the EITC, and Section 8 housing vouchers alone, and for good reason.16 Replacing those benefits with a $12,000 UBI for the parent would reduce the family’s income and benefits by $19,100.

A fundamental motivation for UBI is to eliminate poverty, but the tradeoffs necessary for funding would likely cause harm to vulnerable populations. This begs the question: If the main difference between UBI and our current safety net is that UBI gives relatively more to people who don’t need help, what would make UBI worthwhile? Some proponents have suggested UBI could be restricted to certain populations in need, but that would defy the universality at the idea’s core. At this point, what they are really proposing is an expansion of the existing safety net. That’s a worthwhile conversation to have, but it’s not about a universal basic income.