Glossary

Universal basic income

A proposal for regular cash payments to all citizens or residents, regardless of income or work status.

Also called: UBI, basic income, guaranteed income, negative income tax

Universal basic income (UBI) is a policy idea in which the government gives every person in a defined group a regular, unconditional cash payment, with no work requirement and no means test. It differs from existing programs in being universal and in replacing, rather than supplementing, other benefits in some versions.

The idea has supporters across the spectrum. Milton Friedman proposed a negative income tax in the 1960s as a more efficient replacement for welfare programs, and Thomas Paine argued for a citizen's dividend. Andrew Yang made a $1,000-per-month "freedom dividend" part of his 2020 presidential campaign, and technology leaders have supported it in anticipation of automation. Alaska's Permanent Fund Dividend is a state-level example. Pilot programs have tested guaranteed income in various cities.

Supporters argue it would reduce poverty, simplify the welfare system and provide a floor for workers. Conservatives and others object to the cost, since a meaningful payment would require very high taxes or large cuts to other programs, and to its possible effect on work incentives and its departure from the principle of reciprocity. Evidence from pilots is mixed on employment effects. See means testing and welfare state.

Last reviewed November 8, 2026

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Related terms

Means testing Limiting government benefits to people whose income or assets fall below a certain level. Welfare state A system in which government provides or guarantees programs, such as pensions, health care and income support, to protect citizens' basic welfare. Earned income tax credit A refundable federal tax credit that supplements the earnings of low- and moderate-income workers, particularly those with children. Child tax credit A federal tax credit that reduces what families owe for each qualifying child, partly refundable for some low-income parents. Socialism An economic and political system in which the means of production are owned or controlled collectively or by the state rather than privately.