[Epistemic status: not sure this would work]
The single largest complaint about the idea of a Universal Basic Income is that would cost a ton of money. This is sort of an inescapable fact.
On the other hand, Republicans often lower taxes without worrying too much about the costs. Their starve the beast strategy sort of depends on doing this.
It seems like you can’t implement a UBI as tax breaks, since tax breaks only reduce what you pay to the government, they don’t allow money to flow the other way.
In a progressive tax scheme, poor people pay taxes at a lower rate than rich people. In the US this is implemented with tax brackets. A simple income tax bracket might work such that a tax filer only pays 0% on the first $100,000 of income, and then pays 30% on everything after that. Of course the real US tax code is much more complicated than that.
One way of thinking about this is that each person gets $100,000 or so of low-tax income allocation credits. If you make more than some threshold, you have to pay at a higher rate, but if you make less than that, then in some sense you’ve wasted part of your allocation. A single person making $20,000 per year in the US is losing out on a lot of potential tax advantage.
So what would happen, just as a thought experiment, if we made tax advantage transferable? In our simple tax scheme, our single person making $20,000 could use their tax advantage to pay income taxes at a 0% rate, and then sell their remaining $80,000 of tax advantage to somebody else who is a millionaire and has a large income. What’s the value of that transaction? It’s approximately 30% * $80,000, or $24,000, and that’s close to what I would expect the millionaire to be willing to pay to the poorer individual in an efficient market.
So under this scheme, simply by converting tax brackets into transferable accounting objects that give tax advantage, we’ve created a world where a basic income exists. And this basic income would not be administered by the state at all; instead, it would be administered entirely by the free market through purchases of tax credits!