I don't see how this would make it "not income". It's still income if you have a large tax bill.
> at least in the spirit that people talk about it.
In what spirit do people talk about it?
Think of a world with two people. One rich one poor. Both get checks for $500, but the rich persons taxes go up by $1000 to pay for the program. The net effect is different for the two people.
Now in a more realistic setting with a range of incomes, the tax burden of UBI increases in a persons wealth. When you take the net of UBI income minus UBI taxes you get a progressive tax scheme. This means it is not a transfer in the way economists talk about transfers. You still have an effect where people get "punished" with higher taxes as their income goes up.
If you get a check for $500 and your taxes go up by $500, that means your total compensation (all sources of taxable income including capital gains) is exactly at the national mean, which is to say that your income is way higher than the median income. As a mean income earner, you earn more than 80% of all Americans.
Are you in the top 20% of income earners? If not, then you come out ahead.
> Think of a world with two people. One rich one poor. Both get checks for $500, but the rich persons taxes go up by $1000 to pay for the program. The net effect is different for the two people.
That is true and it is by design. That's the way functioning progressive tax systems have always worked.
> You still have an effect where people get "punished" with higher taxes as their income goes up.
Yes, that's the point of a progressive tax system.
My original comment was in response to a comment that claimed that UBI does not suffer from the same incentives as needs-based programs and doesn't punish people for increasing their income.
My point was that this is not true. As your income increases, your relative tax burden from UBI also increases. In other words, as your income increases, "UBI income minus UBI taxes" decreases. Thus creating some of the same incentives as needs based programs. This is common to all progressive tax systems (which I support), and UBI isn't a magical exception.