A carbon tax can pay for means tested basic income – it would not be enough to cover a UBI or prevent massive tax increases.

Will the politics change radically? While some UBI proponents argue that continued pressure on the middle class will make UBI politically feasible, I’m skeptical. Economic pressure on the middle class will not alter UBI’s daunting financing challenges. In fact, more such pressure will likelier increase middle-class resistance to the massive tax increases required to secure UBI without increasing poverty. And we shouldn’t think that we can just get the resources solely or primarily by hitting people at the top. Will we really tax the top 1 percent or top several percent enough to finance most or all of UBI — on top of the higher taxes we’ll want the same group to pay to shoulder a substantial share of the burden of restoring Social Security solvency, repairing the infrastructure, and meeting other critical needs? Increased pressure on the middle class is more likely to put UBI farther out of reach, unless it’s financed heavily — as UBI supporters on the right favor — by shifting income and resources away from the poor. To be sure, there is a possible exception: a carbon tax that returns its proceeds to the public via a universal payment. For a carbon tax to have any chance of enactment in the not-too-distant future, however, it almost certainly will have to allocate a substantial part of its proceeds to uses that are necessary to get the votes to enact it in the first place, such as relief for coal-producing states or regions. There’s also a powerful case for using some of the proceeds to greatly expand and accelerate research into alternative energy technologies; a carbon tax likely won’t be sufficient by itself to arrest global warming. Thus, the proceeds available from a carbon tax to finance universal payments would likely be significantly constrained. If a carbon tax could pass, we might need to focus the proceeds available for these payments on low- and moderate-income families — so the payments would be adequate to offset the higher energy costs these families would face as a result of the tax — rather than extending the payments all the way up the income scale in universal fashion.