You ask, “ What would you do with an extra $1,000 per month?
Ed Dolan

If labor is being replaced by capital, which it is, then the revenue should come mostly from capital, through the stakeholders of that capital. There’s more than one way to go about that, but Universal Basic Income should not be seen as requiring a tax on hard work. It should treat capital gains and dividend taxes just like normal income, and tax that instead.

It should target rentierism. If people see basic income as unearned income, why not tax unearned income to pay for unearned income? Makes sense to me.

I also like the idea of a consumption tax like a VAT in the US combined with the UBI. A 10% VAT for example combined with a $12,000 UBI would mean anyone spending more than $120,000 per year would be a net payer, but unlike a direct tax on income, it’s an indirect tax that people could avoid by just not consuming as much. Reduce income taxes as part of the deal.

And of course, I think most of the funding for UBI should come from what we already do. Get rid of the bulk of the programs, wherever possible in full, where not possible, partially. Get rid of the bulk of tax credits, deductions, allowances, and subsidies too. Programs like the home mortgage deduction benefit the rich far more than everyone else. Replace it with the UBI functioning as one universal fully refundable tax credit instead of a multi-millionaire getting $15,000 for their mansion while a renter receives nothing.

While we’re at it, cut corporate taxes and ordinary income taxes. Tax what we don’t want instead, like carbon pollution and high frequency trading. I’m a big fan of Pigovian taxes. I’m also a big fan of land value taxes, but I think it may be more realistic to do that one state by state, or even city by city, and use that to pay dividends that add to the UBI.

The idea of citizen seigniorage also interests me. Why do we let banks create most of the money in our economy through debt? Let’s instead remove that power from banks and create new money directly in the hands of citizens. By doing this, we could reduce the taxation required for UBI, or simply add it to the UBI on top as something that would change in value year to year based on what the Fed thinks how much money should be created each year.

Let’s also figure out how UBI can be seen as predistribution. Why do we grant monopolies to those like Disney to keep things like Mickey Mouse out of the public domain for over a century? If a company wants to keep a patent, or a copyright, or a trademark, all to themselves, let’s charge them rent, and raise that rent year after year until the cost of excluding that intellectual property from the public domain no longer makes sense to the bottom line.

And finally, but perhaps most importantly, let’s recognize ourselves as shareholders deserving of dividends. If all Level 1 research in the US is being paid for with tax dollars, and that research is then used to build products like the iPhone, citizens should be seen as the investors that put up the capital to make that possible. To accomplish this I like Varoufakis’ idea of taking a small percentage of all IPO stocks, and putting those stocks into a giant national mutual fund, whose dividends pay out into the UBI pool. I’m sure there are other ways to accomplish this, but it’s imperative we as citizens start seeing ourselves as the shareholders we are.

Basically, I think we have a lot of options to consider, and I think the conversation itself around universal basic income provides the opportunity to really reform the ways in which we fund government, and in so doing, each other.