You are called in by the government to help design a policy to lift people out of poverty. Your colleague suggests two possible options:

Policy A: a universal basic income financed by a flat tax $20,000 annually in a universal basic income transfer for everybody with no phase-out. a 25% tax on everyone from the first dollar earned.

Policy B: a means-tested transfer financed by a progressive income tax $20,000 annually for people with no earnings that is phase down smoothly as your income grows and reaches zero when your income is $80,000. a 25% tax on all income above $80,000.

Looking only at the tax portions of each policy, which one leads to higher government revenue for say, 100 households (total pop.) making up to $200,000. Looking only at the spending portions of each policy, which one leads to higher government spending for say, 100 households making (total pop.) up to $200,000. Which ones do you prefer and why? Which plan has more of an effect on the incentive to work more/less hours at the margin? Which plan is more progressive?