Universal Basic Income Programs: How Much Would Taxes Need to Rise? Evidence for Brazil, Chile, India, Russia, and South Africa

Ali Enami, Ugo Gentilini, Patricio Larroulet (), Nora Lustig, Emma Monsalve, Siyu Quan and Iamele Rigolini

No 112, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: Using microsimulations this paper analyzes the poverty and tax implications of replacing current transfers and subsidies by a budget-neutral (no change in the fiscal deficit) universal basic income program (UBI) in Brazil, Chile, India, Russia, and South Africa. We consider three UBI transfers with increasing levels of generosity and identify scenarios in which the poor are no worse off than in the baseline scenario of existing social transfers. We find that for poverty levels not to increase under a UBI reform, the level of spending must increase substantially with respect to the baseline. Accordingly, the required increase in tax burdens is high throughout. In our five countries and scenarios, the least increase in taxes required to avoid poverty to be higher than in the baseline is around 25% (Brazil and Chile). Even at this lower rate, political resistance and efficiency costs could limit the feasibility of a UBI reform.

Keywords: Universal basic income; microsimulation; inequality; poverty; tax incidence (search for similar items in EconPapers)
JEL-codes: D63 H22 H31 H55 I32 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2021-09
New Economics Papers: this item is included in nep-cis, nep-dev, nep-isf, nep-lam and nep-pbe
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Published in Commitment to Equity, September 2021, pages 1-39

Downloads: (external link)
http://repec.tulane.edu/RePEc/ceq/ceq112.pdf First version, 2021 (application/pdf)

Related works:
Journal Article: Universal Basic Income Programs: How Much Would Taxes Need to Rise? Evidence for Brazil, Chile, India, Russia, and South Africa (2023)
Working Paper: Universal Basic Income Programs: How Much Would Taxes Need to Rise? Evidence for Brazil, Chile, India, Russia, and South Africa (2021)
Working Paper: Universal Basic Income Programs: How Much Would Taxes Need to Rise? Evidence for Brazil, Chile, India, Russia, and South Africa (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:112

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