Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297983 
Year of Publication: 
2024
Series/Report no.: 
FRIBIS Discussion Paper Series No. 02-2024
Publisher: 
Albert-Ludwigs-Universität Freiburg, Freiburg Institute for Basic Income Studies (FRIBIS), Freiburg
Abstract: 
Economic modeling of Universal Basic Income (UBI) often fails to consider how individuals' utility calculations shift with unconditional transfers. In this paper we further develop the model of our previous paper - The Implications of UBI on Utility Functions and Tax Revenue (Neumärker, B., Weinel, J., 2022). We contend that, while traditional fiscal models rely on an additively separable relationship between consumption and labor, the utility calculation for individuals influenced by UBI is better represented by a multiplicative relationship. This shift arises from the time sovereignty afforded by UBI, empowering individuals to become selfdetermined, creative, and intrinsically motivated. We explore the implications of the UBIadapted utility function on tax revenue. Specifically, we analyze the consumption tax revenue curve under UBI (multiplicative preferences) versus a means-tested welfare system (additive separable preferences).
Subjects: 
Basic Income
Laffer Curve
Utility Function
Consumption Tax
Time sovereignty
Intrinsic Motivation
Creative Commons License: 
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Document Type: 
Working Paper

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