> Won't UBI just shift the poverty line to a value above whatever it is now(0 maybe), without changing the income inequality/wealth difference.
As far as I can tell this keeps coming up because the answer is "no" but the explanation is complicated.
The are two types of inflation.
One is industry-specific and happens when the government subsidizes something. For example, if the government provides education subsidies then the cost of education increases compared to other things like food or transportation.
The other is currency-specific. When the government prints a lot of new currency, the value of a dollar goes down. Prices go up not because there is more demand for products but because there is less demand for dollars.
A UBI doesn't do either of those things. It doesn't subsidize any specific thing and it doesn't create any new money.
The closest you can get is that there is a theory that higher income people spend less of their income than lower income people, so anything that transfers money from higher income people to lower income people is equivalent to creating new money, because the money in the hands of higher income people was effectively out of circulation.
That general form has nothing to do with a UBI. It applies equally to any government program that produces per-capita public benefits from sales or income tax revenues. The rich pay a tax and the poor get public schools and housing subsidies, which means the poor have the money they didn't spend on schools or housing and can spend it on something else.
Moreover, the effect is small (most people aren't rich enough to never spend their money), and it's simple to compensate for it -- the government is constantly creating new currency because more currency is required as the economy grows. So if you want less inflation, print less money.
And that's assuming that moderate inflation would be a problem, but in fact it's a benefit. The country is in a debt crisis. People have too much mortgage debt, too much student debt, too much credit card debt. The government itself has too much public debt. The prices of housing and education and medicine are too high, but lowering nominal prices is very difficult because everyone has mortgages and contracts that assume the existing prices. The US balance of trade has been out of whack for decades. Lowering the value of the dollar helps with all of those things because it lets the nominal price of those things stay the same while reducing their actual cost back to sane levels.