Income Guarantee Benefits and Financing

**Key Findings** Income guarantee plans can substantially reduce poverty at reasonable costs. How much poverty is reduced depends upon who is eligible and how the benefit is financed. A modest income guarantee of $250 per month for adults and children can be financed principally by eliminating redundant deductions in the federal income tax and secondarily by a $42-per-metric-ton carbon tax. This $250 per month benefit for adults and children with hybrid financing reduces child poverty from 12.6 to 4.8%. A $500 per month benefit limited to adults financed solely by a carbon/consumption tax would reduce child poverty only to 10.3%.