A Universal Basic Income: Theory and Practice in the Israeli Case

This article examines the implications of adopting differing versions of a Universal Basic Income (UBI) in Israel. While the findings of the analysis indicate a taxed version of UBI would contribute to a greater extent to a decrease in poverty and income inequality than if this benefit were not taxed, the high cost of an effective UBI program would appear to be a serious obstacle for its implementation. The article then examines the possibility of enhancing the trickle-down effect of economic growth by offering the dividends of growth to Israel's citizens. The assumption here is that if all citizens engage in economic activity, under conditions of economic growth the state should distribute a portion of its tax revenues among shareholders (i.e., its citizens).