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By what measures?

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My estimates did not depend on flat tax. I calculated a flat tax rate to have some numbers to compare things to and to judge, not because I actually thought going with that option would be politically feasible. In fact, the numbers for funding all of the poverty-line GBI through income tax certainly work out better, politically, for a different approach; depending on definition, the range of people who pay more under $11,490 GBI + flat 37% income tax overlaps heavily with the middle class (who politicians are always trying to cater to).

Even aside from the details of funding and taxation, there are certainly a lot of complex details that would need to be worked out. It seems that one way to pay attention to poor children without creating the perverse incentives is to have some kind of growth curve where younger children are assumed to need less money than adults, and there are all kinds of problems with that approach; another would be for children to not get it, but have an appeals process or something, which causes a lot of other problems.

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I did have a quick gander at what the actual average value of “welfare” (all federal programs) are to the average recipient, and it gets murky quickly. There’s a hundred and sixty-odd programs, seventy two of which pay out direct benefits. Calculating this relies heavily on some partisan assumptions, with conservatives inflating the numbers and liberals lowballing the estimates.

However, depending on the state, the overall average amount of total welfare spending recieved per household (not individual, another huge problem) is somewhere between $20k (liberal estimate) and $35k (conservative estimate). Roughly $10k of this is in Medicare spending, so my point about health care would seem to be well founded.

I do agree that most healthy adults could live more or less on 10k per year at current PPP levels. Health care is what really throws the wrench in there. The other problem is children. If children get BiG, we have an expense problem and a perverse incentive for the poorest to knock out more and more kids (similar to what we have now). If they don’t, everything is easier, but we need to get real hard in response to sob stories about the hungry children of people with too-short time horizons. Which swings back to an earlier point, I think people are too nice (especially with “rich people’s” money) to let those who choose to mispend their BiG just starve when they screw up.

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The argument that it’s too expensive is a lot stronger. I was thinking less that $25k, but I’ll admit that I was thinking about what most people could live on (some people can and do even live on $5k comfortably; I think most people could live on $10k, if not particularly comfortably, with the right effort and education), not about what the people with more needs needed. Thinking about it more, a very natural place to put the amount received is at the national poverty line ($11,490 per individual; less if you’re in a family, but I’ll just go with the full number); I don’t know how the national poverty line was chosen, though. I ran both your number of $25k/year and the $11,490/year figure below; I’ve written up the national poverty line ones first. I still think your estimate is too high, but even it is somewhat feasible.

Let’s start with the national poverty line, but simplify it to assume everybody is single (which is both easier to calculate and pays out more cash). This means that the government needs to spend $11.49k/person × 320 million people ≈ $3.7 trillion (after rounding up) on GBI alone. This is almost twice what the government is currently spending on welfare and healthcare. If we got rid of all healthcare and welfare spending of the government and replaced it with this amount of GBI, we’d get a total government spending of about 6.2-1.9+3.7 = 8 trillion. According to this article, the current total income tax revenue is a bit over a trillion dollars. If we get all the extra money from income tax (because it’s simpler, not because I support such a policy), and don’t tax the money we’re giving out (we could tax it, but then we’d have to give out more; this could be done in a mathematically equivalent way but is again harder to calculate), this means we need a total of about $1.8 trillion more income tax, or (after rounding up) about $3 trillion in income tax total. There are a number of ways to collect that money, but since tax brackets are harder to calculate and are meant to make things easier for the poor (which should be less necessary now), I’ll simplify and use a flat tax rate. Assuming we leave the definition of AGI the same (I think it would probably be reasonable to change some of the adjustments, but that’s harder to deal with), this gives us a tax rate of $3 trillion ÷ $8.3 trillion × 100% ≈ 37% tax rate (again rounding up). Given 2014 tax brackets, this means that single people (ignoring other filing statuses) with AGIs between $61,218 and about $1.2 million (according to the Tax Foundation summary, that’s between 25% and 50% of taxpayers, probably closer to 25%, but I didn’t look for more precise numbers) would pay more net money under this scheme than they currently do (the people who suffer the highest absolute money loss are those with an AGI of $406,750; they pay $20,888.75 more net than they would; I haven’t calculated who would suffer the highest percent loss with the conversion); note that this specific detail is an artifact of completely changing the bracketing for easy calculation, and you could spread the burden to other demographics instead.

Above, I said we’d get all the extra required money from income tax. However, Wikipedia says that income tax revenue is only 46% of the US tax revenue. If we assume all taxes increase proportionately, then we only need 46% of the excess $1.8 trillion, or $828 billion. Rounding up, this gives us a needed $2 trillion in income tax revenue, or a (rounding up) 25% flat tax. This leaves literally every single person (and probably most people with other filing statuses) paying less (in income tax minus GBI, at least; presumably at least some people will pay more in other sources of tax, because we’re not creating or destroying money), because the increase in income tax revenue is more than covered by the GBI payed for with non–income tax sources. This would be equivalent, from a mathematical perspective, to lowering and simplifying income tax for everybody (sometimes into the negative, with tax = 25% AGI – $11,490) and raising taxes from other sources.

Now let’s try your proposed minimum amount of $25k. This requires total spending of $8 trillion total just for GBI, or about $12.3 trillion total government expenditure. If we take all the extra expenditure and collect it from income tax, this requires $6.1 trillion more income tax, or about $7.2 trillion total income tax, for a flat rate of about 87% (everybody with an AGI higher than $34,092 would pay more on net with this system). This is obviously a much bigger problem, and would be pretty infeasible. If we assume all taxes increase proportionately, then only 46% of the extra required income comes from income tax. This means income taxes go up by about $2.8 trillion to (rounding up) about 4 trillion, or about a 50% flat tax rate (rounding up again, more than I need to because 50% is a nice number). This is higher than any bracket now, but the government is giving a lot of money, so only anybody with an AGI over $83,425 would pay more (again only in terms of income tax minus GBI). If I’d rounded down instead of up a few of those times, 45% would have at least come close to working; then anybody with an AGI over $106,916 would pay more income tax. Either way, that’s between 10% and 25% of taxpayers. Probably not politically feasible, but not completely prohibitive either.

Again, my methodology here is simplified. I don’t account for the fact that this will have drastic changes on the economy which affect taxes available; I don’t take into account that governments can and do go into debt and have year-to-year deficits; I mix and match data from different years based on what I find; I don’t account for the fact that some of the Adjustments in AGI would change with this; I don’t account for bigger changes to tax policy like converting to more sales tax; I don’t account for the interaction between imigration and GBI; I don’t account for this type of “guarantee” often not extending to prison inmates or children (whatever my own opinions on whether or not they should be); etc. Some of these approximations make GBI easier to implement; some make it harder. Some of them are things I could have accounted for with more effort; some are things I can’t predict or even trained economists couldn’t predict. There are probably some problems with what I did that I don’t even know are problems, or other things I don’t know I don’t know. Still, I believe this is at least shows that, even if a reasonable GBI would be too expensive to implement, it takes more than some simple handwavey calculations to prove it, and there may very well be some wiggle room.

EDIT 1: Simple formatting changes, rewrite last sentence.
EDIT 2: Remember to add this log of edits.

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Either the BiG is low enough to afford, in which case many of the most needy get a net cut in benefits, or it is high enough to support everyone, in which case it is too expensive to contemplate.

Look, at the $5k level, $5k is the deductible on a low level health care plan. Poor people are disproportionately in need of health care, and we’ve just eliminated Medicaid as part of the BiG. So exactly how is a poor person with any health problems supposed to pay rent, food and heating costs, while maintaining health care coverage, and the deductible is their whole income? Disabled people would be crushed. There’s just no way the people who currently live on Medicaid, Welfare and SS Disability aren’t going to get slaughtered by a $5k BiG.

Ok, so we figure out how much people need to live at that level, and it’s (let’s say) $25k. Now we need to tax enough to get every person in the country $25k, plus enough to keep the courts running and the FBI working, the parks open, etc. Just the BiG is almost eight trillion dollars, which is well over half our GDP. Add in the rest of the government at current levels and we’re talking about the government spending roughly three quarters of GDP every year.

This is the trap, you can’t make the BiG high enough to care for the worst off without making it too expensive. It doesn’t work, unless you discriminate by need, SES etc. Which is what we do now, and produces all those bad incentives. As I said originally, there is a reason we have the system we do. They may not be great reasons, but they are currently better than the alternative.

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