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Unpublished Paper
The Cost of Basic Income: Back-of-the-Envelope Calculations
  • Karl Widerquist

This study makes simple, “back-of-the-envelope” estimates of the net cost of a UBI set at about the official poverty line: $12,000 per adult and $6,000 per child with a 50% “marginal tax rate.” Key findings of this study include the following. The net cost of this version of UBI is $539 billion per year: less than 16% of its often-mentioned but not-very-meaningful gross cost ($3.415 trillion), less than 25% of the cost of current U.S. entitlement spending, less than 15% of overall federal spending, and about 2.95% of Gross Domestic Product (GDP). The average net beneficiary of this UBI is a family of two making about $27,000 per year. The family’s net benefit from the UBI would be nearly $9,000, raising their income to almost $36,000.
  • Basic Income,
  • Universal Basic Income,
  • Transfer Payments,
  • Government Budget,
  • Poverty,
  • Taxation
Publication Date
Winter May, 2017
Citation Information
Karl Widerquist. "The Cost of Basic Income: Back-of-the-Envelope Calculations" (2017)
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