Guaranteed minimum income

"I care not how affluent some may be, provided that none be miserable in consequence of it." ― Thomas Paine, Agrarian Justice

The concept of guaranteed minimum income—GMI—is relatively self-explanatory.  The government would send periodic payments to households to guarantee a minimum income.  Let's suppose that a program was implemented in which, on average, every person received 6,800 dollars per person per year—this is approximately 100% of the poverty threshold—costing a total of 2.2 trillion dollars.  This program would be difficult to fund.  The government collected 3 trillion dollars in taxes in 2014, but that would probably change when the GMI program is implemented.

There are about 150 million jobs in the United States, which means each job provides, on average, 20,000 dollars in tax revenue.  However, GMI could render minimum wage obsolete.  A large number of jobs would open up, mostly unskilled positions paying a few dollars per hour.  How many is hard to say.  For the sake of argument, let's say a 70% decrease in minimum wage, would lead to a 10% increase in the number of jobs.  The net result would likely be a 66% decrease in taxable wages, if the GMI is not taxed.  Though dubious, my calculations suggest this would cause a 14% decrease in tax revenue.  That is, 2.5 trillion dollars, which would just about cover the costs of the program.

That's not to say that a similar program cannot be implemented.  Giving GMI payments to the bottom 20% of the population would cost less than half a trillion dollars annually—on par with current welfare spending.  Furthermore, solutions such as universal basic income have gained support from both left- and right-wing politicians.