Economists agree it’s the least damaging and most effective tax.

If taxation could undermine the effects of the Basic Income, then we must consider whether those advocating Basic Income have identified any innovative tax policies that might be able to meet such a criticism. Some of the ideas for paying for Universal Basic Income that are practical, like a flat-rate sales tax or an income tax that affects most transactions, would nonetheless be flawed in the way they account for economic change. However, one method for taxation that is practical but different than normal taxation is a value-added tax (VAT), a method that taxes the value added at each part of the manufacturing process of a product. European governments have employed a VAT in order to generate revenue from businesses that are traditionally left out of taxation. The efficient manner of value-added taxes cannot be understated with most of the Organization for Economic Co-operation and Development (OECD) members finding a significant amount of funding from it. As William Gale of Brookings Institution observed, “The VAT can raise substantial amounts of revenue. Among OECD member countries in 2016, VATs were the third largest source of revenue behind the individual income tax and social security contributions and raised about 7 percent of GDP on average.”25 Other professionals also agree that a value-added tax is much more preferrable than other forms of added taxation, “a VAT is a consumption tax. Economists of all stripes agree that if there must be a new tax, a broad-based consumption tax will do the least economic damage. Further, all the world’s other leading economies have VAT regimes.”