I like this. Provided we set it at something fair and reasonable. Like FREAKIN ZERO.
Problem with Zero is that you end up paying far more than zero on police, courts, and prison costs.
One of the problems with the current welfare system is that it has 'cliffs', IE spots where a person will be
worse off working than not working. Not to mention that trying to determine who's worthy of what assistance gets expensive, and you have program costs in ensuring that the money is spent how the politicians determine it should be spent.
Now, I know this is more social libertarian than fiscal libertarian, but there are still shades of both sides. By getting rid of all the bureaucracy about benefits, and simply giving a flat amount to 'everybody', not worry about how it's spend, that's socially free. It should also cost less, which pleases my fiscal responsibility side.
$500/month works out to $6k/year. Go to a flat tax rate of 30% or so. At that rate somebody would 'break even' at $20k/year. I'd have to break out the spreadsheets(don't have the time, need to get work done), to figure out if that disadvantages anybody over the current system. Especially with standard exemptions and deductions to worry about.