That's true, although it doesn't really change the problem. That working can literally cause you to lose money is particularly outrageous (and can still happen by just accounting for more income-dependent taxes and benefits disqualifications), but even if you were "only" losing 80% of your salary, it's still totally unreasonable. Why is your marginal tax rate effectively 80% but someone making twice as much or more is paying less than half that percentage?
The right way to fund things like this is to give the same dollar amount to everyone but collect the same percentage from everyone. The rich still pay their share because a percentage of $20K/year is naturally much less money than the same percentage of $20M/year, but you discontinue the wanton destruction of the middle class, and as a happy consequence you also eliminate a lot of waste and frustration because if you give everyone the same benefits unconditionally then you don't need an invasive means testing bureaucracy.
The CBO has some great graphs on this. It literally starts at $0 and can go--obviously depending on a lot specifics--all the way up to $225k, where your marginal income is zero dollars. Every dollar you earn is taken, every dollar your don't is covered.
The basic income + flat tax system is ethically superior but politically impossible. What's worse is we're still actively going in the other direction, to more progressive taxes and more regressive subsidies.
The right way to fund things like this is to give the same dollar amount to everyone but collect the same percentage from everyone. The rich still pay their share because a percentage of $20K/year is naturally much less money than the same percentage of $20M/year, but you discontinue the wanton destruction of the middle class, and as a happy consequence you also eliminate a lot of waste and frustration because if you give everyone the same benefits unconditionally then you don't need an invasive means testing bureaucracy.