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The Relative Cost of a Universal Basic Income and a Negative Income Tax

  • Philip L. Harvey
Published/Copyright: December 28, 2006
Basic Income Studies
From the journal Basic Income Studies Volume 1 Issue 2

The cost of a negative income tax (NIT) designed to mimic the redistributive effects of a universal basic income (UBI) and set at a level sufficient to eliminate official poverty in the US is estimated using income distribution data for 2002. It is estimated that an NIT satisfying these conditions would have required an $826 billion increase in government spending in 2002, compared to a $1.69 trillion increase for an equivalent UBI. Despite this cost difference, the income and substitution effects of a UBI and an equivalent NIT are shown to be the same; and these effects are analyzed. Finally, the cost of providing a basic income guarantee (BIG) by either of these means is compared to the cost of securing the right to work and income security recognized in the Universal Declaration of Human Rights using a program of direct job creation and conventional income transfers.

Keywords: Keywords – basic income; negative income tax; Universal Declaration of Human Rights
Published Online: 2006-12-28

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

Articles in the same Issue

  1. Front Matter
  2. Content
  3. Editorial
  4. List of Contributors
  5. Research Article
  6. Reconsidering the Exploitation Objection to Basic Income
  7. Basic Income and the Problem of Cumulative Misfortune
  8. The Relative Cost of a Universal Basic Income and a Negative Income Tax
  9. Research Note
  10. Basic Income in 1848
  11. Debate
  12. Reasons for Launching a Basic Income Experiment
  13. The Bottom Line in a Basic Income Experiment
  14. Lottery Games as a Tool for Empirical Basic Income Research
  15. A Plea for the Use of Laboratory Experiments in Basic Income Research
  16. A Piece of the Puzzle: A Comment on the Basic Income Experiment Debate
  17. Book Review
  18. Review of Ailsa McKay, The Future of Social Security Policy: Women, Work and a Citizens' Basic Income
  19. Review of Clive Lord, A Citizens' Income: A Foundation for a Sustainable World
  20. Review of Russell Muirhead, Just Work
https://doi.org/10.2202/1932-0183.1032
Keywords for this article
Keywords – basic income; negative income tax; Universal Declaration of Human Rights

Articles in the same Issue

  1. Front Matter
  2. Content
  3. Editorial
  4. List of Contributors
  5. Research Article
  6. Reconsidering the Exploitation Objection to Basic Income
  7. Basic Income and the Problem of Cumulative Misfortune
  8. The Relative Cost of a Universal Basic Income and a Negative Income Tax
  9. Research Note
  10. Basic Income in 1848
  11. Debate
  12. Reasons for Launching a Basic Income Experiment
  13. The Bottom Line in a Basic Income Experiment
  14. Lottery Games as a Tool for Empirical Basic Income Research
  15. A Plea for the Use of Laboratory Experiments in Basic Income Research
  16. A Piece of the Puzzle: A Comment on the Basic Income Experiment Debate
  17. Book Review
  18. Review of Ailsa McKay, The Future of Social Security Policy: Women, Work and a Citizens' Basic Income
  19. Review of Clive Lord, A Citizens' Income: A Foundation for a Sustainable World
  20. Review of Russell Muirhead, Just Work
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