Federal funding is more progressive because some states have flat taxes or no income taxes.

In the long term, in order for a state program to be permanent it must be funded by tax dollars, and those who have more should pay more. Guaranteed income envisions not only a program that provides a basic standard of living for people struggling most, but a program that is redistributive – funded by taxation of people and entities who have the most income and wealth (and the least need) – and distributed to people with the least income and wealth and most need, thus shrinking inequality through equitable revenue raising and redistribution. In order to fund a guaranteed income for its no-income, low-income and middle-income residents, states should examine the full breadth of their revenue raising powers and increase tax burdens on the richest individuals and corporations, and could consider taxing wealth, income, or both. The federal government utilizes a graduated tax rate where income within higher brackets is taxed at a greater percentage than income in lower brackets – generally equating toward those with higher income paying more money in taxes. However, some states have regressive flat income taxes, or no income tax at all, and could consider funding a guaranteed income through implementation of a graduated tax system to more equitably tax the income of high earners in the state.76 For other states, instituting a state wealth tax – perhaps through the form of an estate or inheritance tax – could be a viable strategy for public funding.77