Below is a quick document summarizing a Flat Tax paired with UBI. It started as a study into the merits of Negative Income Tax (NIT), but then I realized you can achieve a similar effect with the scheme outlined below.
Intro: This document is a quick overview of a tax/welfare solution to balance the budget and replace the Unites States’s current welfare scheme. A flat tax is simply a fixed percentage tax rate for all individuals, regardless of income. Universal Basic Income (UBI) is essentially a sum of money paid to all adult or tax paying citizens without any other stipulations.
The Model: The model I propose is basically a form of UBI paired with a flat income tax. Details are as follows:
• Every individual either over the age of 18 or who is employed (to take into consideration those under 18 who are legally employed) receives base governmental compensation (BGC)
• BGC is set at $20,000 USD annually (as of 2019).
• BGC replaces all federal mandatory spending (i.e. Medicare, Medicaid, Social Security, etc.)
Pros:
• Flat tax rate is egalitarian and appeals to conservatives
• UBI aspect will appeal to liberals
• Balanced budget
• Reduced bureaucracy by eliminating welfare programs and infrastructure
• Less disincentive for individuals to work than conventional welfare.
With this model, you don’t get more benefits for hitting certain requirements of need. Everyone gets the base income, and if you want to make more money, you are more than welcome to. Math stuff:
• Some basic calculations were run with US budget and spending from 2015
• A surplus of roughly $315 billion USD results from this model
• Obviously this is extremely oversimplified but it gives a basic proof of concept
Conclusion: Our current system of federal revenue and spending is very clearly broken. To remedy this, we must look into alternative approaches. This may not be the right one, but at the very least it gets us thinking about ways to fix our system.
Dangling Woo Li Master 