Proponents of this policy argue it presents a forward-thinking and equitable solution to the profound economic shifts of the 21st century. Firstly, it directly addresses the growing threat of technological unemployment and inequality by creating a robust social safety net for citizens whose livelihoods are displaced by automation. This universal basic income would act as an economic floor, ensuring stability and reducing poverty. Secondly, the policy is designed to stimulate the economy from the ground up; by providing regular, predictable income, it empowers individuals to spend, pursue education, or start small businesses, fostering entrepreneurship and boosting local economies. Finally, the funding mechanism is seen as both elegant and just, as it captures a fraction of the immense value generated by automated systems and reinvests it directly into the society those systems are transforming, ensuring that the gains from productivity are shared more broadly rather than being concentrated among a few.

Critics of the policy warn of severe unintended consequences that could harm the very economy it aims to help. The primary argument is that a 5% transaction tax would act as a powerful disincentive for innovation, making automation and AI development prohibitively expensive and causing the nation to fall behind competitively. Companies would either slow their adoption of efficiency-boosting technologies or pass the costs directly to consumers, leading to significant inflation that could negate the benefits of a basic income. Furthermore, the practical implementation of such a tax presents crippling administrative challenges, as defining an "automated transaction" is legally and technically ambiguous, opening the door to massive loopholes and costly disputes. A final major concern is the risk of capital flight, where companies reliant on high-volume automated transactions would simply move their operations and data centers to other countries, eroding the tax base and weakening the national economy.