The nice thing about a UBI is that it's still progressive even if funded by a flat tax, like VAT, because with the UBI it's still a net transfer to lower income people. How are the people at the top going to avoid VAT? By moving all their customers to a tax haven?
Also, in this context "the top" is anything above the middle. Are lawyers and petroleum engineers going to move to a tax haven?
> Are lawyers and petroleum engineers going to move to a tax haven?
Yes? I'm not a particularly special engineer, and a significant part of my decision to leave California was the income tax. I'm certainly not alone there.
Also bear in mind that "tax haven" is a relative term. Canada can become a tax haven if their taxes are lower than ours. Europe can be a tax haven if their taxes are lower. If my net income in the US (taking into account higher salaries) comes out the same as what I would make in Europe, I'm moving to Europe. I'd much rather have the safety net than UBI.
> The nice thing about a UBI is that it's still progressive even if funded by a flat tax.
I think this takes more thought. I agree that we want a progressive curve, and that UBI-with-a-flat-tax gives us a progressive curve, but I don't think we've established that it gives us the curve we want. Moving from the ideal curve to the (potentially) less than ideal curve for the sake of easier enforcement may still be worth it, and may still produce a system that we'd prefer to the current one, but we have to actually establish that.
UBI-with-a-flat-tax gives a very nice curve, and on top of that you can make it arbitrarily more or less progressive by adjusting the amount of the UBI. A larger UBI with a higher flat tax rate is more progressive.
It's mostly just not that compatible with confiscatory-level taxes on very high income people, but the cause of the trouble there was never really the taxes (once they were paying the same rates as ordinary people). The problem there is regulatory capture and inadequate antitrust enforcement leading to abusive consolidated corporate empires.
It gives a family of curves, and as you say you have a knob you can turn...
I don't have a strong opinion about exactly what shape the curve should have, but I do have a strong opinion that it's probably important and I've noticed a tendency (first in myself!) for UBI proponents to be satisfied having checked the "it's a progressive curve" box without having looked carefully at whether it can produce the particular progressive curve we (more broadly) want.
Edited to add: I suppose if we do find that we need people to be taking home marginally more for the first N dollars earned, we could add a rebate based on reported income. Small fraud ("I reported a little more than I actually made") winds up pretty bounded in the amount it can walk off with; larger fraud ("I invented 500 people who are reporting income") isn't that much bigger a concern than it would already be with a UBI since the maximum rebate is probably much smaller than the stipend that would otherwise be expected. Note that I'm not calling for this, just exploring the space.
