The Power Of Zero Show If A.I. Leads to Universal Basic Income, How High Will Taxes Have to Go to Pay for It?
David explains why A.I. could make Universal Basic Income (UBI) a reality sooner than you think. As machines take over more jobs—especially white-collar ones—we may need a new safety net just to keep society stable.
Why UBI is no longer a fringe idea but a serious policy being considered in Washington. It promises monthly cash payments to every adult, regardless of their job or income.
David highlights the staggering cost of UBI if implemented today. At $12,000 per adult annually, the total price tag would hit $3.1 trillion a year—equal to all Social Security and Medicare spending combined.
How to wrap your head around what that means for taxes. To fund UBI, the government would need to raise taxes by at least seven percentage points across the board.
David shares what that looks like in real life. If you’re in the 22% tax bracket now, that could jump to 29%—even before you factor in state taxes or future hikes.
With rising national debt and shrinking tax bases due to A.I., David believes higher taxes may become the new normal.
David explains how this affects your retirement plan. If you're deferring taxes in a traditional IRA or 401(k), you may be setting yourself up for a bigger tax hit down the road.
How to avoid that painful surprise later. Today's low tax rates could be the best deal you'll ever get—so delaying taxes could mean missing the window.
David shares the smart move more Americans should be making right now. Start shifting money into tax-free accounts like Roth IRAs while the current tax laws still work in your favor.
David covers a powerful example to bring this to life. Imagine you’re 55 with $1 million in a traditional IRA and expect to pay 22% in taxes. If taxes go up by 20 points in the next decade, you could lose hundreds of thousands more to the IRS than you need to.
Why waiting for retirement to convert to Roth might be a big mistake. The longer you wait, the larger your account grows—and the more you’ll owe when rates are higher.
How to protect yourself from what David calls a “perfect storm” of higher taxes and shrinking benefits. You can’t control what Congress does—but you can control where and how your money grows.
Mentioned in this episode:
David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com