A UBI would be extremely expensive – studies prove that growth induced tax revenue would not fully offset costs.
Grant, 2023 - Quantitative Research Analyst & Data Engineer · Grandeur Peak Global Advisors [Joseph, BYU Marriott Student Review, “A Universal Basic Income: Effective or Overkill?” https://scholarsarchive.byu.edu/marriottstudentreview/vol5/iss2/4/ Acc 2/22/23 TA]
THE FISCAL AND ECONOMIC COSTS OF BASIC INCOME Though the effects of a universal basic income on employment are important, the costs associated with a UBI are equally crucial to understand. Andrew Yang, for example, estimated that his proposed UBI of $1,000 monthly for all American adults would “permanently grow the economy by 12.6 to 13.1 percent… and would increase the labor force by 4.5 to 4.7 million people.”7 While the phrasing of Yang’s plan makes a UBI appear attractive, it ignores the issue of fiscal costs. Such a proposal would likely never be budget neutral. Figure 3 gives the estimated costs and revenues of Yang’s UBI as determined by the Tax Foundation. According to the Tax Foundation, Yang’s proposal would cost around $2.8 trillion with his proposed taxes only bringing in $1.3 trillion. Additionally, the Tax Foundation concludes that “it is very unlikely that it [Yang’s proposal] would be able to produce significant [economic] growth on a persistent basis.”8 This is because Yang’s proposed taxes to pay for a UBI would disproportionately target U.S. oil and gas operations, increasing costs and displacing workers in those industries as a result.