> or to design a system where it's clawed back through paycheques.

It would be no different than e.g. the existing payroll tax, or income tax withholding. You'd just notice it as a reduction in your paycheck. And if your income is high enough, the UBI can simply be a tax credit.

I agree, payroll tax could just take the ubi into account and take more depending on ur expected income

> It would genuinely be tough problem to educate people to not spend their basic income, or to design a system where it's clawed back through paycheques.

We can use the system that we already have, that is, income tax. It has worked fine for quite a while.

Yeah note the line after that. This is a new wrinkle to the norm.

Not saying these issues can't be addressed, just pushing back against the notion that UBI is simple to implement.

That's why it's often formulated as a negative income tax

Wouldn’t a negative income tax mean that the credit gets progressively larger as you earn more money? This would not be the desired effect.

I think the desired effect is simply a refundable tax credit, and then you can adjust the existing progressive tax rates as needed.

No, it's an income tax which grows progressively with income plus a general refundable tax credit. So the overall tax liability goes negative for low incomes, and since the credit is "refundable" that involves actually getting money from the government. The general idea is sound, there's some difficulties involving ease of administration, e.g. paying the grant weekly or monthly rather than yearly.

Interesting questions, but I think GP used the shortened form of "negative income tax bracket".

No. A negative income tax is a well established principle. It can be implemented as a bracket, but it can also be implemented as a tax credit or in a fully progressive tax system.

https://en.wikipedia.org/wiki/Negative_income_tax

Yes, I understand that. It is indeed far more common to hear the term negative income tax than with "bracket" at the end. I was giving an extra detail to distinguish the term from the truncated jargon the above poster appeared to misunderstand. (It is NOT a "negative income tax rate" but effectively a bracket that owes a negative tax liability thanks to the tax credit/UBI/call it mana if you want to.

So basically it's called a "negative income tax", but it's not actually implemented by multiplying income by a negative percentage.

In the model proposed by Milton Friedman, you start with an exemption amount, and a specific proportion of any unused exemption is refundable.

The first dollars you earn reduce your exemption, but at least they aren't taxed, until earnings equals the exemption amount, at which point you are getting no subsidy and your next earned dollar starts being taxed at the lowest rate.

The effective tax rate on those early dollars would be equal to the subsidy rate. For example, an exemption amount of $20k and a subsidy rate of 40% would mean earning nothing would grant you a $8k credit ($20k * 40%). Earn $10k and you would get a $4k credit ((20 - 10) * 40%). Earn $20k and you would get no credit and pay no taxes. But effectively your tax rate on the first $20k earned is 40% -- because you earned $20k and only netted $12k in additional income.

If instead you just give everyone $X, and just have the first dollar earned get taxed at whatever the lowest rate is, you don't have the same problem with regressive rates.