Registered humans will have to tax their UBI as income in some jurisdictions.
This discussion aims to educate UBI receivers to avoid unfavorable tax situations
and is partially related to Proposal Draft: UBI taxation with Rotki.
The following example illustrates the problem:
Let’s assume you got 720 UBI tokens at an average price of 0.50$/UBI.
This corresponds to a realized income of 720 UBI * 0.50 $/UBI = 360 $.
Assuming an income tax rate of 25%, you have to pay 360 $ *0.25 = 90 $ income tax.
This is fine as long as you can sell the 720 UBI tokens above the break-even price of 0.125 $/UBI (720 UBI * 0.125 $/UBI = 90 $).
If you sell below the break-even price, you have to pay more taxes than you have gained through receiving the UBI.
We could mitigate the problem by giving the user more information, e.g., by displaying the average price at which the user received the UBI tokens.