Category: Trumplandia

As automation accelerates and artificial intelligence reshapes entire industries, we’re rapidly approaching what feels like an inevitable crossroads: a future where traditional employment simply can’t provide for everyone. In this landscape, Universal Basic Income (UBI) isn’t just an idealistic policy proposal—it’s becoming an economic necessity. But if the pandemic taught us anything about large-scale government payouts, it’s that UBI won’t come without strings attached, and those strings might fundamentally transform how America collects taxes.

The Automation Avalanche

We’re not just talking about robots taking factory jobs anymore. AI is poised to disrupt everything from legal research to creative writing, from medical diagnostics to financial analysis. When ChatGPT can draft contracts, when autonomous vehicles threaten millions of driving jobs, and when machine learning algorithms can outperform humans at pattern recognition across countless fields, we’re looking at unemployment levels that could make the Great Depression seem manageable.

The math is stark: if technology continues advancing at its current pace while productivity gains don’t translate into proportional job creation, we’ll need a new economic model. UBI represents the most straightforward solution—a direct cash transfer that provides everyone with basic economic security regardless of employment status.

Lessons from the Pandemic: The Political Economy of Stimulus

But here’s where it gets complicated. The COVID-19 stimulus payments offer a revealing preview of how UBI might actually come to pass—and it’s not through progressive idealism.

Remember how we got those stimulus checks? It wasn’t because Congress suddenly embraced wealth redistribution. The “stimmies” were politically viable only because they came packaged with the Paycheck Protection Program (PPP)—a system that ultimately funneled hundreds of billions to business owners, many of whom didn’t actually need the money. For every $1,400 check that went to working families, multiples of that amount flowed to corporations and high earners through PPP loans that were largely forgiven.

This pattern reveals something crucial about American political economy: major redistributive programs require buy-in from powerful interests, and that buy-in typically comes at a steep price.

The Tax System Trade-Off

Here’s my prediction: when UBI finally arrives, it will come with a radical restructuring of our tax system. The wealthy and powerful will extract their pound of flesh, and that extraction will likely take the form of eliminating the complex, progressive tax code in favor of something much simpler—and much more regressive.

Imagine this scenario: The IRS, that bureaucratic behemoth that the wealthy have always despised, gets largely dismantled. In its place, we implement a single 30% Value Added Tax (VAT) on all goods and services. Suddenly, tax compliance becomes automatic—embedded in every transaction rather than requiring annual filings, audits, and the massive enforcement apparatus that currently exists.

For the wealthy, this represents a dream scenario. No more worrying about capital gains rates, estate taxes, or complex loopholes. No more audits, no more tax lawyers, no more IRS. Just a flat consumption tax that, while nominally affecting everyone equally, actually represents a massive tax cut for high earners who save and invest large portions of their income.

Why This Trade-Off Makes Sense (Unfortunately)

From a purely political perspective, this bargain has an almost inevitable logic:

For the wealthy: They get to eliminate the progressive tax system they’ve spent decades trying to dismantle. A 30% VAT might sound high, but for someone currently paying 37% income tax plus state taxes plus capital gains, it represents significant savings—especially since the wealthy consume a smaller percentage of their income than the poor.

For the middle class: They get economic security through UBI, even as they face higher consumption taxes. For many, this could still be a net positive if the UBI amount exceeds their VAT burden.

For the poor: They get a guaranteed income floor, which could be life-changing even if they pay more in consumption taxes.

For politicians: They get to claim they’ve solved both unemployment and tax complexity in one fell swoop.

The Regressive Reality

Of course, this system would be fundamentally regressive. VATs hit the poor hardest because they spend nearly all their income on consumption, while the wealthy save and invest significant portions of theirs. A person spending $30,000 annually would pay $9,000 in VAT (30% of their consumption), while a wealthy person spending $100,000 but earning $1 million would pay only $30,000—just 3% of their total income.

But here’s the political genius of coupling this with UBI: if the universal payment is large enough, it could offset the regressive effects for lower-income Americans while still delivering massive tax savings to the wealthy.

The Inevitability Factor

The more I think about it, the more this feels inevitable. Not because it’s the best policy outcome, but because it’s the only politically viable path to UBI in America. Our system simply doesn’t allow for large-scale progressive redistribution without providing even larger benefits to those who already have the most.

We saw this dynamic with pandemic relief, with the bank bailouts of 2008, and with virtually every major economic intervention in recent decades. The pattern is consistent: help for ordinary Americans comes only when it’s packaged with even greater help for the wealthy and powerful.

What This Means for the Future

If this prediction proves correct, we’re heading toward a profound economic transformation. UBI would provide unprecedented economic security for millions of Americans, potentially eliminating poverty and giving workers the freedom to take risks, pursue education, or care for family members without fear of destitution.

But it would come at the cost of permanently entrenching a less progressive tax system, potentially increasing wealth inequality even as it provides a social safety net. The rich would get richer faster, but everyone would have a guaranteed minimum.

The Questions We Should Be Asking

As we hurtle toward this potential future, we need to grapple with some difficult questions:

• Is a regressive-but-universal system better than our current progressive-but-incomplete one?
• Can UBI be large enough to offset the regressive effects of VAT for those who need it most?
• What happens to public services when we shift from progressive taxation to consumption taxes?
• Will this bargain actually deliver on its promises, or will it simply be another way for the wealthy to extract more from the system?

Preparing for the Inevitable

Whether this scenario plays out exactly as I’ve described, some version of it feels increasingly likely. The combination of technological displacement and political economy suggests that UBI will come, but it will come with trade-offs that progressive advocates might find uncomfortable.

Rather than fighting this reality, perhaps we should be preparing for it. How do we ensure that a UBI-VAT system actually serves working people? How do we prevent it from becoming just another wealth transfer upward disguised as social policy?

The answers to these questions will shape whether the coming economic transformation represents genuine progress or just another iteration of America’s long tradition of socializing costs while privatizing benefits. One way or another, change is coming. The question is whether we’ll be ready for it.