I think the real question has to be: how do we determine what the regulations should be. Today, regulations are typically the product of dysfunctional political processes, and, no surprise, a lot of those regulations are unhelpful and a lot of helpful regulations are absent.
You make a good point, a good UBI pilot would incorporate the necessary tax increases.
But that's not what this study did. Crucially, the disincentive to create only applies to low income earners. Under, UBI everyone pays the taxes and thus everyone gets that disincentive to work. If we want to see what UBI would do, we should actually do UBI.
But the funding mechanism isn't at issue here. The point is that for every dollar earned the participants lost 50 cents due to a decrease in support from the basic income. That's a massive disincentive to work.
I don't think this fits the definition of basic income.
> Whatever income participants earned was deducted from their basic income at 50 per cent
That is equivalent to a massive 50% tax rate on every dollar earned. It seems to me the whole point of UBI is that its universal and not conditional on how much you earn otherwise.