Abstract:
The purpose of this note is to discuss the distributional effects of some a priori identified UBI schemes, as an illustration of the different trade-offs involved, and to foster the debate around UBI in France. All these schemes share the feature of retaining some limited form of targeting - in particular discriminating access to the scheme and generosity of the benefit by age. We find that the option funded only by the elimination of selected targeted benefits is regressive on average, and that only by funding the UBI with a significant increase in general taxation, we are able to obtain a reduction in poverty rates. We also consider a more limited basic income scheme targeted to young adults between the age of 20 and the age of 24 (included) only, funded by an increase in all marginal tax rates of 3 percentage points (with no changes to the personal tax allowance). No benefits are eliminated in this case. Results point to drastic improvements for the targeted group and their families, while the costs remain manageable as they are shared by the whole population of taxpayers.
