Stephen Gordon considers the costs and benefits of guaranteed income.
There’s a proposal being floated around Quebec policy circles that would ensure that someone who works 16 hours per week at minimum wage would still have an income that would put her above Statistics Canada’s poverty threshold for Quebec (about $12,000). These amounts are far from lavish, but the costs are surprisingly high. In this report, some of my Laval colleagues estimate that the lower bound is on the order of $2.2b. To put this in perspective, one percentage point of the Quebec TVQ (the provincial GST) generates about $1.2b in revenues. Financing even this modest proposal would require the equivalent of at least two extra percentage points to the TVQ.
The RSS tag the Globe put on Kevin’s recent Economy Lab post says “If it’s not implemented properly, a guaranteed annual income could become a very costly program”. I think it’s better to say that if it’s not costly, then the BI isn’t being isn’t being implemented properly. There’s really not much point in arguing for a BI if you’re not prepared to argue for significantly higher taxes.