Tool 02
The fiscal sandbox: where the money comes from
"Who pays for it?" is the strongest objection to UBI, because it is usually right. No rhetoric here, just arithmetic: you set the payment, it costs it; you pick the funding, it shows the gap. If the gap does not close, it does not close.
Annual gross cost
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of GDP
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of government revenue
Funding (pick several, drag to set intensity)
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Assumption: Redirect existing social security and employment spending into the basic income. 100% means all of it.
The ceiling is each country's existing social spending: about ¥4.2tn in China (roughly 3.1% of GDP) and about $1.6tn for US Social Security alone (roughly 5.3% of GDP). This raises no new revenue; it reallocates.
Contested The most dangerous lever here. Existing benefits are allocated by need; flatten them into equal payments and the heavily dependent — disabled people, the chronically ill, large families — are likely to end up worse off. Any plan that closes using this lever must first answer who becomes poorer.
Sources: Congressional Budget Office, Mandatory Spending in Fiscal Year 2025: An Infographic (2025)
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Assumption: Levied on top of existing consumption taxes. 100% is roughly a doubling of the current VAT burden.
China's domestic VAT raised ¥3,322.3bn in 2024, about 2.5% of GDP at a 13% headline rate; doubling that burden is about 2.5% of GDP, so a 5% ceiling is already aggressive. The US has no federal VAT, and a broad-based one is typically costed at roughly 2.5–3% of GDP per 10 percentage points.
Contested Consumption taxes are regressive, since the poor spend a larger share of income. Paired with a UBI this is substantially offset: a flat payment is worth far more, relatively, to low earners than the extra tax costs them.
Sources: 中华人民共和国财政部, 2024年全国财政收支情况 (2025)
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Assumption: Raise progressive rates in the upper-middle and top bands, and claw the basic income back from high earners. 100% represents a very aggressive increase.
Our estimate. Benchmarked against the cross-country spread in personal income tax as a share of GDP among developed economies (roughly an 8–12 point range), 4% is a large but not unprecedented increase.
Contested Clawing the payment back from high earners makes UBI far cheaper on paper, but also makes it targeted in net terms — universality becomes an administrative form rather than a distributive fact.
Our estimateNo third-party costing supports this figure; we derived it from the reasoning above. Treat it as a contestable assumption, not a fact.
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Assumption: Higher capital gains rates plus an annual tax on large net wealth.
Our estimate. Several European countries have run net wealth taxes and collections generally undershot projections, mostly landing between 0.2% and 1% of GDP. 2% is an optimistic ceiling.
Contested Capital is mobile and hard to value; several countries repealed net wealth taxes over collection costs and base flight. Betting UBI on this lever is risky.
Our estimateNo third-party costing supports this figure; we derived it from the reasoning above. Treat it as a contestable assumption, not a fact.
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Assumption: Tax the rental value of land and the extraction of natural resources, rather than labour or buildings.
Our estimate. Land value taxation is widely regarded by economists as the least distorting tax, since land supply is inelastic and cannot flee. But no large country has implemented it broadly, so the realistically collectable amount lacks large-scale evidence.
Our estimateNo third-party costing supports this figure; we derived it from the reasoning above. Treat it as a contestable assumption, not a fact.
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Assumption: Price carbon emissions and pay the entire proceeds out as basic income — the "carbon dividend" design.
Our estimate. Carbon taxes carry a built-in contradiction that must be stated: if the tax works, emissions fall and the base shrinks. It can fund a transition. It cannot fund a permanent programme.
Our estimateNo third-party costing supports this figure; we derived it from the reasoning above. Treat it as a contestable assumption, not a fact.
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Assumption: Build a national investment fund and draw a sustainable share of returns each year, typically 3–4%. This is the Alaska and Norway model.
Our estimate. This is the most politically durable lever on the list — the Alaska dividend has paid out since 1982 across many changes of government precisely because it does not depend on annual appropriations. The cost is that building a fund to meaningful scale takes decades.
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Assumption: Tax data centres, AI inference compute, or digital services revenue.
Note how low this ceiling is — deliberately. The data-centre excise proposals recently discussed in Congress would raise $17.5–46.5bn over ten years, that is $2–5bn a year, about 0.01–0.02% of US GDP. Our 0.2% ceiling is already more than ten times generous. "Make the AI companies pay for everyone" is emotionally compelling and off by three orders of magnitude.
Contested This is the popular misconception we most want to correct, even though correcting it hurts our own case.
Sources: Tax Foundation, New Congressional Data Center Tax Proposals Threaten US AI Investment (2026) · ITIF, Taxing AI Compute Would Be a Mistake (2026)
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Assumption: Simply borrow it. 100% means running an additional deficit worth 3% of GDP every year.
This lever is here not because we recommend it but because leaving it out would hide how far short it falls. The US ran a $1.8tn deficit in FY2025 with net interest passing $1tn for the first time. Adding another 3% of GDP on top still does not close a full UBI — and this is precisely the scenario in which the inflation objection is at its strongest.
Contested This is where the inflation objection lands. A tax-financed UBI redistributes; a deficit-financed UBI expands money. Conflating the two is the single most common error on both sides of this argument.
Sources: Congressional Budget Office, Monthly Budget Review: Summary for Fiscal Year 2025 (2025)
Results depend on payment size, coverage and funding assumptions. This sandbox shows costs and gaps across scenarios; it does not endorse the feasibility of any policy.
How this is computed
Gross cost = monthly payment × 12 × people covered. This is gross, not net of any claw-back through taxation — the net figure is lower, by an amount that depends on claw-back design, which we do not assume on your behalf. Each lever raises: its ceiling (as a share of GDP) × GDP × the intensity you set. The "consolidate existing transfers" ceiling is that country's current social spending, because it creates no new revenue and only redirects.