Yang’s intentions are admirable. The guy is obviously Presidential quality, especially in comparison to our current President. However, he has the basic maths against him, maths being the macroeconomic reality.

Firstly, the UBI benefit will be “paid for” partly by a 10% tax on all goods and services, no matter what name it is given. That makes the benefit $900, not $1000. Secondly, in today’s anti-deficit political environment it will mean those at the bottom of the present income scale will have to give up, at least, $1000 of any current benefits they may receive from the government if not all of it. For someone who is disabled or just dropped out of the job market for a variety of possible reasons not of their own fault, the benefit will be possibly their only source of income when the complex formulas for our safety nets are applied, or those programs disappear altogether.

For someone just one rung up the ladder and making $1000 per month at a job, their income will almost double, except that the tax will apply to everything they purchase, even with their earned money. This will degrade their benefit by 20%, bringing it down to $800 net, but counting as $1000 toward any present benefits they receive, if those benefits even survive the reshuffling of several safety net programs.

Unless some very complex Rube Goldberg tax law is applied specifically to the lower incomes in a system that already makes Rube look like a piker this “benefit” will end up harming the ones it is meant to help the most. Few things point out the futility of using taxation to “pay for” federal benefits better than a UBI. A non-discretionary tax without further income-based negative tax benefits would put this futility on steroids, and good luck getting both a $1000 monthly benefit “AND” a $1200–2400 yearly tax credit passed at the same time.

Then there are some macro-economic realities to be faced that result from any injections of federal money. Good luck convincing your boss you need a raise when you’re getting a $1000 check in the mail every month. Large low pay employers love them some UBI. They are already using government assistance to low-income workers to supplement their payroll, so don’t plan on appealing to their sense of civic duty.

Raising the minimum wage, or indexing it to inflation, will only bunch workers up at the bottom of the wage scale, even more than they already are until inflation quickly eats up the benefit. Given that the only ones to see a net benefit are those most likely to spend it, that will come much quicker than anyone realizes, especially with a 10% general pre-sale tax on goods that will actually only benefit the state and local governments that use sales tax as all or part of their revenue.

Any redistribution effect of the tax will not apply to money not spent, which is the bulk of the income of the wealthy, and would actually widen the already yuuuuuge comparative wealth gap. Between the guaranteed inflationary pressure such a universal benefit presents and the damage potential of trying to pay for it I see no long term benefit, and several pitfalls, of the proposed UBI unless our government has a collective epiphany concerning money creation and tax as revenue. We should work on that first instead of piling more workarounds on a monetary system based in gold standard myths.