Wouldnt the VAT just get passed on to consumers, cancelling out the UBI? No. First, not all goods will be subject to the VAT. Staples such as groceries and clothing will be excluded from the VAT. Second, the assumption that the entire VAT would get passed on to consumers is incorrect. Consumers are price sensitive, and the demand for most goods is at least somewhat elastic. While prices will likely increase on many goods, the increase will, for the most part, be smaller than the VAT as producers find more efficient ways to produce goods and adjust prices to maximize profitability. Finally, an individual would have to buy a lot of non-exempt items in order to cancel out the value of the UBI. Assuming all goods are subject to a VAT and the entire VAT is passed on to consumers, an individual would have to buy $120,000 worth of items before the extra costs associated with a VAT use up their UBI. As stated above, those two assumptions are wrong, and most people arent spending nearly that much money.