A universal credit would have to be refundable, which means the government would write a check even to those who don’t pay income tax. This year the credit is refundable only up to $1,700, but Democrats want total refundability as the start of a universal basic income, whether you work or not. Is Mr. Vance saying he wants his $5,000 fully refundable?
For Americans who owe no income tax, a $5,000 payout would be a large check that could prompt parents to work less or drop out of the labor force. It’d also be one more giant item mucking up the tax code while producing zero of the economic growth that such families need to prosper.
The rough cost of this big new entitlement could be nearly $3 trillion over 10 years, according to the Tax Foundation. That’s twice the static revenue cost of Mr. Trump’s 2017 tax cuts, though those at least had some revenue feedback effect from spurring the economy.