Program Costs

insights

Safety net programs can have impacts in the long-term (on employment, earnings, and mortality) that don't show up in current government practices of limiting time horizons for cost-benefit policy analysis to the short-term. A 10% value-added tax in 2020 is estimated to have potentially raised $842 billion, rising to an average of $1 trillion in annual revenue over the following decade. A NIT designed to eliminate poverty (in 2002) with a minimum payment of $9,359 that reduces by 25.6% per dollar earned is estimated to have costed $1.09 trillion. A NIT set at 100% of the poverty line with a 50% phaseout rate would've cost $219 billion in 2004 (using 2007) dollars. Andrew Yang's Freedom Dividend is estimated to have a gross cost of $2.8 trillion per year. A NIT with an income threshold at the federal poverty line and a 33% phaseout rate would cost $336 billion, and phaseout completely at 303% of the poverty line.

sources

The Relative Costs of a UBI and a NIT The Cost of Basic Income: Back-of-the-Envelope-Calculations Expanding the Discourse on Antipoverty Policy: Reconsidering a Negative Income Tax Does Andrew Yang’s “Freedom Dividend” Proposal Add Up? Raising Revenue with a Progressive Value-Added Tax Children and the US Social Safety Net: Balancing Disincentives for Adults and Benefits for Children

authors

Philip Harvey Karl Widerquist Luke Shaefer Elizabeth Rhodes Jessica Wiederspan Kyle Pomerleau William Gale Adriana Lleras-Muney

reports