You can raise income taxes on the employed pay for UBI for the unemployed. Therefore, the cost would only be $20 * India's unemployed adult population, which is a lot less than 900 million.
How would you even define unemployed in a vast part of India? There is quite an bit of informal economy. I think >94% don't even file income taxes (either too low an income or don't declare.)
I don't need to define it though. India has non-zero tax revenue. It can raise that revenue somehow (to claim otherwise would be bold and would require evidence). And some individuals will have a tax liability greater than the level of basic income.
If basic income is X, some of the individuals receiving it will have a tax liability >= X. All legitimate UBI proposals I've ever heard share this property. It's either that, or the government finances the entire UBI with a budget deficit. And no one is seriously proposing that.
There's also minimum guaranteed income... which guarantees that Earned Income + Basic Income - Tax Liability >= Minimum Guaranteed Income, for all individuals. That's a stronger proposal. We should really aim for this.
But I don't think implementing UBI means that everyone is better off the next day. Some people's post-tax income will stay the same or go down.
Another question: do UBI and income tax go together? It would be interesting to see proposals that provide UBI but eliminate income tax, replacing it with some other kind of tax.
I initially interpreted the parent to say that employed people don't receive UBI. If they do, it is in fact a UBI but then does not get around the cost issue (I comment about that on a sub thread).
Absolutely it does get around the cost issue. Someone with no income receives just a UBI. They cost the system $20. Someone with non-zero income recives both a UBI and a higher income tax burden. What net impact does that individual have on the cost of the system? If their income is greater than the UBI... the impact might be zero, or negative.
Assuming a 40% tax (no idea what it would actually be in practice), everyone earning less than $50 a month would be a net cost.
As a thought experiment, imagine that you increased the UBI payments so that they took up all the gross income of the country. Now your tax rates are 100%, even though the "net impact" of the redistribution is 0. A smaller UBI is the same concept, just the percent of income distributed is smaller. The bigger the UBI, the larger your tax rates on all workers. As those tax rates reduce the supply of labour, the costs mount even more.
The OP is suggesting that taxes on the employed go up by >= $20 at the same time that they receive a check for $20. No net benefit for the employed while they are employed, but the checks keep coming even if employment stops.
Ok, but that's still increasing marginal rates even if you ignore the unemployed. Consider the case where you have 100 people, one that earns $1/week, one that earns $2/week, etc. and the last person earns $100/week.
A $20/week UBI for all of them would cost $2000/week. You would need a flat tax of 39.6% on everyone to cover that. So everyone's marginal tax rate increases, with the associated deadweight losses.
tldr; you can't just hand wave and say a redistributional tax scheme is free since it all balances out across the population.
No one even came close to suggesting that a redistributional tax scheme is free.
But interestingly: basic income provides more benefits with as income inequality goes up. That is, if everyone in society already has the same level of income, there would be no way to finance basic income through income tax. You would collect the same amount of tax from every person and then give it right back to them. However, in your hypothetical distribution, that one person at the top is singlehandedly providing the basic income of 2% of the population. And we are using your proposed very fair taxation scheme of flat tax. And in reality, income distributions are far more skewed than your hypothetical distribution.
Great-grandparent comment implied the only cost you need to consider is for unemployed people i.e. that it's free for those who are employed . That's wrong.
That's not at all what the great-grandparent comment said. It was talking about the aggregate cost of the entire system. And the great-great-grandparent was wondering "just where is the money going to come from?" but fundamentally it's not a problem. As long as the total basic income of a country is less than the total income of a country, the latter can be redistributed into the former.
By this argument, if the basic income == the total income of a country, there is still no aggregate cost. Maybe, but I'd argue that such a system would come with huge costs due to the massive increase in taxation.
