The Falling Cost of Basic Income in the United States, 1967-2024
Abstract
This article estimates the cost of Universal Basic Income (UBI) sufficient to
eliminate poverty in the United States. It uses the most recent microdata available
from the Census Bureau through its Current Population Survey (CPS) public-use
microdata files and references historical income data from the Annual Social and
Economic Supplements (ASEC) going back to 1967. It finds that UBI (or an equivalent
guaranteed income) sufficient to eliminate official poverty is surprisingly affordable
and that the cost of UBI as a percentage of GDP has been falling steadily for more than
50 years. Estimates based on the most recent data (from 2024) show the net cost of a
UBI set at $16,000 per adult and $8,000 per child (slightly higher than the official
poverty line) with a 50 % marginal tax rate is approximately $783.7 billion per year,
which is about 2.67 % of GDP. In inflation-adjusted terms, the current cost of a
poverty-line UBI as a percentage of GDP has fallen significantly from 9.35 %of GDP in
1967 to 4.95 %in 1995, 3.70 %in 2015, and 2.67 %in 2024. Therefore, as a percentage of
GDP, the current cost of a poverty-line UBI is less than one-third (28.6 %) of what it
would have cost when the guaranteed income was under discussion in the United
States in 1967. This article also updates and significantly improves on calculations
made in the article “The Cost of Basic Income: Back-of-the-Envelope Calculations”
which appeared in Basic Income Studies in 2017.
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