It could eliminate/save other huge portions of the budget. It would also probably have to be adjusted based on location, or as you said it wouldn't do much good in expensive cities, which might reduce that cost further. And a huge chunk of that money is going to people who will immediately spend it on taxable goods/services which could be a big revenue/jobs boost.
It's still a huge cost though, and while I like the idea from a philosophical standpoint and some of the small scale tests have some promising results. It's still seems like a bit of a blue sky idea that could have some really bad consequences at scale.
https://www.ukpublicspending.co.uk/year_spending_2018UKbt_17...
Let's be generous and round it up to £250 billion, as some other savings might possibly be made in other areas.
The total government spending each year is £842 billion, and the cost of the UBI above (£1,000 a month) is £636 billion.
We're still about £380 billion short ... not far off half the current government budget.
Your point about cities is a good one, but I think this would actually increase the cost. It would be pretty difficult to live on £1,000 a month anywhere, but it would be impossible in some cities (definitely London!).
And while your point on revenue from other sources is valid, as VAT is about 20% here, I imagine the extra returns would be marginal.
Infact, when you consider reduced income taxes through some choosing to cut back on work/not-work, you might see these gains completely negated.
I'm not necessarily saying a UBI is a bad idea in and of itself, but it just seems impossible to implement a decent UBI due to budgetary constraints (it seems unfeasible to me).
You could feasibly pay out a UBI of something like £400 a month if you just replaced the current welfare budget with a UBI, but £400 a month isn't much, and this also ignores the fact that this would massively disadvantage people who were previously reliant on the welfare system for all of their income (perhaps due to inability to work).
Why not just let people move to cheaper places? If they need UBI to survive, NYC is probably not the best place to live.
Otherwise you will have fraud where people have an NYC address so they can collect a large UBI check, but actually live in Oklahoma (or overseas) where their money will go further.
In terms of £400 a month. I think that is feasible (although still a very large amount of money!).
Although £400 isn't enough to live on, at all (I'm not sure if that's what you mean in your reply, or whether you're talking about 1000/mo?). It could still have other benefits - reducing poverty, allowing for extra leisure time, more risk taking in terms of setting up businesses etc.
I'd be much more open to a lower level of UBI than something that is "enough to live on without working". I think any large UBI just becomes incredibly difficult to fund.
Is the incentive to work different? I thought it worked like this:
Under UBI if you earn $1 you are always $1 richer. Under negative income tax, if you earn under some threshold, when you earn $1 you are < $1 richer because the govt will hand you less.
Just a quick estimate, assuming that we're talking about the UK here
The UBI pays out to 53,000,000 people (very roughly the number of people 18 and over).
The amount the UBI pays out is £1,000 a month (whether you could really live on this is debateable, but it's certainly not possible in most of London for example).
53,000,000 * £1000 = £53,000,000,000 (£53 billion) monthly cost
53,000,000,000 * 12 (months) = £636,000,000,000 (£636 billion) yearly cost
Bear in mind the entire UK budget for 2018 was £842 billion:
https://en.wikipedia.org/wiki/2018_United_Kingdom_budget
Infact, if you break this down to local/national spending, the national government budget for 2018 was £652 billion:
https://www.ukpublicspending.co.uk/year_spending_2018UKbt_17...
So a UBI would cost pretty much as much as the entire UK national budget (healthcare, education, defence, infrastructure, welfare etc.)
I'm all for increasing taxes, but assuming that you replaced welfare with a UBI, you'd still have a (roughly) £400 billion shortfall - just where does that money come from?
It's affordable at a lesser amount, sure, but at that sort of level, what's the point?
This is before even getting to other arguements (if you want to use it to replace a welfare system, then in my opinion, it's essentially a regressive scheme, because everyone is getting the same payout, regardless of need).