In this article in Counterpunch, the author states that tax revenues are 26% of US GDP and the velocity of money is seven. Therefore, if the government pays out $1 extra as unfunded Citizen's Income/helicopter money, it will be spent seven times in a year (the velocity of money, a separate Economic Myth); so total spending will be $7 more, generating $1.82 in additional tax.
This is of course mathematical nonsense, but you hear it a lot from left wingers.
Best case,the recipient gets a fresh new unfunded $1 at the start of the year, let's assume that genuinely does increase demand so total spending goes up by $1. The supplier receives $1, pays 26c tax and spends 74c; the next person in the chain receives 74c, pays 19c tax and spends 55c, and so on.
It is a circular calculation, after a year and seven times round, the total tax paid will be 88c, so this deficit has, unsurprisingly, increased the deficit (although not by as much as the original spending). No matter how many times it is spent, it is mathematically impossible to get the full $1 back in tax.
Funny that lefties go along with this sort of thing while denying there is a Laffer Curve - despite they are the same thing (up to a point).
Think about it, in economic or cash flow terms from the government's point of view, it is the same whether you give people an unfunded UBI or an unfunded tax cut. Politically they are different but no matter. So using the left wing logic, reducing tax rates would always increase tax revenues.
Funnily enough, the right wing nutters believe this, even though it is clearly not true. All the Laffer Curve says is that while very high rates of tax on earnings* bring in less revenue than sensible rates; sensible rates bring in more than very low rates. (* The Laffer Curve doesn't apply to taxes on rents, of course).
As per usual, the left and right wing extremists accidentally agree with each other without realising it. And they're both wrong anyway.
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