I've seen a proposal that implements UBI
via a mostly flat sales tax. The idea goes like this:
All existing taxes are eliminated and replaced by a sales tax. The tax rate can optionally be set differently per product category (e.g. you could set the tax rate on public transit tickets to zero as a subsidy, or impose a higher tax rate on cigarettes as a deterrent).
Then, crucially, the tax rate of a company depends on the ratio of employees and revenue. For example [1], if you have 5 employees per 1m € revenue, that's not enough and your tax rate will be high. Astronomically high, actually. Maybe 200%. No one in their right mind would want to pay these tax rates. So they have to put more people on the payrool. Once they have, say, 7 employees per million € in revenue, the tax rate moves down to a reasonable level.
So the idea is that employees are tax-deductible (to a certain point). The obvious criticism is that some companies (esp. tech companies) need way less employees than others. Should they employ tons of useless workers? No. Instead, they shall employ people that don't actually work for them. Since you don't have to obey labor protection laws for these, you can also employ children, students, retirees etc. The wages of those people constitute a basic income.
There are some rules for tax-deductible employee to prevent the obvious attacks:
- An employee can only be deducted by at most one company at any time. (They can work for other companies, but not be deducted.)
- An employee must earn a minimum wage (depending on hours worked) to be deductible. In the example calculation [1], the monthly minimum wages were set to 1000€ for absent employees, 2000€ for part-time employees <= 20h, and 3000€ for full-time employees <= 40h. (Salaries are not taxed in this model, only sales, so gross salary = net salary.)
To boost entrepreneurship, all companies with less than 250k € revenue do not have to deduct employees; they get the lowest sales tax automatically. This means that you can earn a basic income as an absent employee for a big company, while working in your own one-man business full-time.
All in all, taxes in this model are much lower for individuals (who pay no taxes at all), and also for small and medium-sized companies. Only large enterprises pay much more taxes since there are (hopefully) no loopholes. The entire tax code fits one a single page of paper (except for the table of tax rates, if you're doing different tax rates per industry).
Also, most of the social state can be abolished. Most money transfers are more than replaced by the 1000€ income for absent employees (compared to currently ~250-300€ child benefit, up to 600€ student benefit, 800€ minimum pension, etc.). Only small groups of people (e.g. physically or mentally disabled people) would still need to be subsidized in addition to the 1000€ income. Furthermore, the creator of the model [1] also calls for a tax-based universal health insurance.
The big question mark, as always with UBI schemes, is whether cost of living would adjust upwards to eat up the basic income.
[1] The economist who proposed the model is German, so his examples are based on German salaries, cost of living, etc.
Source: http://www.bandbreitenmodell.de