[ineedasername]

That all depends on who gets a UBI payment. If it served to "top up" people to a minimum income level, then those receiving the payments would by definition have been paying little enough tax that it wouldn't have covered the UBI they receive. So in those case, yes, they're probably more happy to receive the UBI than to have the tax waived. UBI doesn't require it to avoid means-testing the benefits, it simply sets a minimum acceptable income and lifts anyone below it up to that level. People with high incomes pay for it.

[zozbot234]

Typical UBI proposals are "means tested" in the form of a "negative" income tax (NIT), or as we call it nowadays, a refundable tax credit. If you make 0 taxable income, you get a "full" UBI payment. Then some percentage of your earned income (typically 60% or so) is clawed back from the UBI, until the break even point is reached where you get nothing as UBI, but also no further earned income is clawed back. This gives acceptable work incentives at the low end, very good ones above the break-even point, and a low monetary cost for the program as a whole. It is important that the break even point not be too high, or the cost of the program would be way too high for little benefit.

[akvadrako]

60% is absurd. That’s effectively a 60% income tax on the bottom bracket and will certainly decentivize work.

I’ve only seen such a number suggested by South African UBI proponents.

[zozbot234]

It will disincentivize work to some extent, among a comparative minority of UBI recipients. But the flip side is that by keeping the break-even point at a reasonable level and not pushing it too high, you actively slash costs for the program as a whole. The effect of having moderately-high clawbacks at the low end ripples upward, saving a comparable disincentive for every income above the breakeven point. This is a key insight about non-linear income taxation which is borne out by computer modeling of the "optimal" (utility-maximizing) tax rate structure, and economists who are knowledgeable about the subject do agree on this. It's not really controversial.