A/HRC/35/26 effects of negative income tax, but warn that a basic income model that replaces existing social support mechanisms could have seriously negative effects on the poor. V. Affordability 52. Basic income proponents have devoted relatively little attention to the biggest question of all, which concerns affordability. 83 53. The “floor” proposed by Van Parijs and Vanderborght is not “sufficient to cover what would be regarded as basic needs”. Although clearly reluctant to put a figure on their proposal, they suggest an amount of 25 per cent of current gross domestic product (GDP) per capita, which is “modest enough [to be] sustainable and generous enough for it to be plausible that it will make a big difference”. They calculate that this would have amounted in 2015 to $1,163 per month in the United States, $1,670 in Switzerland and $9.50 in the Democratic Republic of the Congo. They do not claim that this level is high enough to get every household out of poverty, although the United States figure would be higher than the official poverty line. They also emphasize that if individuals currently receive benefits higher than the basic income, it “must be topped up by conditional supplements” so that the total disposable incomes of poor households are not lowered vis-à-vis their current levels.84 54. But how would these expenditures be paid for? Piachaud notes that a full basic income that “replaces social security is far more costly than social security, and this has to be paid for from higher taxes on all incomes with far-reaching economic consequences”.85 55. The Economist, relying upon the Organization for Economic Cooperation and Development’s “universal basic income calculator”, concludes that the United States could pay every citizen $6,300 per year if it scrapped all its non-health transfer payments.86 In other words, if it paid its citizens 25 per cent of GDP per capita ($13,956 per year) as Van Parijs and Vanderborght propose, it would need to raise taxes to cover the difference between $13,956 and $6,300. The Cato Institute calculated that paying 296 million United States citizens the poverty-line amount of $12,316 per year would cost $4.4 trillion. Even if all federal and state social assistance spending for the poor (around $1 trillion) and all “middle-class social welfare programmes such as Social Security and Medicare” (depending on the calculations, costing between $2.13 and $2.5 trillion) were eliminated, there would still be a funding gap of roughly $1 trillion. 87 56. Cost calculations for Canada are also revealing. If existing Canadian “de facto” basic income programmes (such as Canada Child Benefit for children, the Guaranteed Income Supplement for the elderly and sales tax credits for working adults), quasi-basic income programmes, earned income tax credits, social assistance and employment insurance were all cancelled, the savings could support a basic income for all Canadians (depending on which programmes were scrapped) of between Can$ 2,655 and Can$ 3,565 per year, with between roughly 1.7 and 1.9 million Canadians falling below the poverty line. Under a scenario in which all existing programmes were kept in place and a supplemental universal basic income was paid to all Canadians of Can$ 1,000 per year, 719,000 Canadians would be taken out of poverty, but at a net cost of Can$ 29.2 billion (equalling Can$ 40,886 per person). To pay for this, the Canadian rate of value added tax would have to be increased from 5 per cent to 9 per cent or income taxes would have to be increased by 20 per cent.88 83 84 85 86 87 88 16 See Jennifer Mays and Greg Marston, “Reimagining equity and egalitarianism: the basic income debate in Australia”, Journal of Sociology and Social Welfare, vol. 43, No. 3 (September 2016), p. 17; Aaron Major, “Affording Utopia: the economic viability of ‘a capitalist road to communism’”, Basic Income Studies, vol. 11, No. 2 (2016), p. 75; “Sighing for paradise to come”, The Economist, 4 June 2016; and “The case for free money”, The New Yorker, 20 June 2016. Van Parijs and Vanderborght, Basic Income, pp. 10-12. Piachaud, “Citizen’s income: rights and wrongs”. “Universal basic income in the OECD”, The Economist, 3 June 2016. Tanner, p. 15. Macdonald, “A policymaker’s guide to basic income”, pp. 19-21.