Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
What If We Did THIS?
#1
Call it Andy Stern meets Milton Friedman.

1. Give every U.S. citizen not in jail and over 21 a $12,500 refundable tax credit, indexed annually to the CPI.

2. Subject all income to a flat tax, say 25%, with no exemptions or credits whatsoever - no exceptions - besides #1 above.

3. Abolish the minimum wage altogether.

One side of our political divide wants to judge the poor for their laziness, while the other side wants to judge the rich for their greed.

But how about an economic policy that judges nobody?
"It was better with them that were slain by the sword, than with them that died with hunger, for these pined away being consumed for want of the fruits of the earth" - Lamentations 4:9
Reply
#2
First, start with the grand bargain that federal spending will be increased while federal taxes will be cut, dollar for dollar, until inflation  reaches a "level of concern."  Currently, the FED see inflation at a necessary minimum of 2% for a healthy, growing economy; other economists make a strong argument for 3-3.5% minimum .  Let's set the level at 3% where, if breeched, federal spending would decrease and federal taxes would increase, dollar for dollar, until inflation subsides below 3% again.

Once technocrats at the FED set the annual spending/taxing levels based on the 3% inflation target, then Congress can fight over the specific increases and cuts (Note - without this duty, there would otherwise be little need for Congress and absolutely no need for the GOP).   That brings us to your proposal -

Your proposal is extremely non-progressive.  One can perhaps make some argument against a $15 or even a $12/hr minimum but the lose of any minimum wage in our current economic environment would be devastating to the working poor;  taking another 25% back without exception would be a lot of salt into the wound.  Your $12.5K rebate would fall far short of making up for that.

Much better would be to cut all payroll taxes with assurances that all entitlements will be fully paid unless at the time of payment, inflation exceeds the 3% threshold.  Then said benefits would be proportionally cut along with all other government spending, and taxes would be raised, dollar for dollar.  Once inflation returns to below the 3%, then these spending cuts and tax increases would be phased out.

Since spending would have to be increased, dollar for dollar, for the payroll tax cuts, I would use the billions to eliminate student loans and provide public college education for free.  I might put a sour-puss Austrian in charge of controlling college inflation. Tongue 

Money should also pour into infrastructure and R&D with a particularly focus on the buildout of the driverless e-car network and grid.

Under the economic boom this would entail, I don't think you would need either an income guarantee or job guarantee program, but I'd be open to the argument depending on the data. 

The beauty of this approach is it actually puts the inflationisties in charge!  They'll focus on analysis of why 3% and not 0% or on government data, but people will give even less of a shXt than they do with their current whining.  Another silver lining is that without all the gold bug ads, Faux News and right wing nut radio will likely go bankrupt.
Reply
#3
The difference between us is that you define what is or is not "progressive" by how a given proposal impacts the rich, while I define it by how a given proposal impacts the poor - and my proposal gives everyone a guaranteed annual income. The rest of my proposal recognizes the reality that in today's highly polarized, red-blue America - for whose very existence I place the blame squarely on the 2T counterculture and the backlash it so justifiably provoked - each side has to give to get.

But analyzing my plan in a practical light: Say someone making only the GAI would like to get cable TV. Chances are s/he would be willing to take a part-time job at $3 or $4 an hour to accomplish that goal - and everyone wins: S/he gets that cable subscription, and the employer gets an easy, cheap hire. In fact unemployment as we know it would likely disappear.

Then there is also the Malthusian implications of the plan - in that it would abolish all tax credits and deductions for dependent children en passant, thus encouraging a lower birth rate.
"It was better with them that were slain by the sword, than with them that died with hunger, for these pined away being consumed for want of the fruits of the earth" - Lamentations 4:9
Reply
#4
(06-21-2016, 08:44 AM)Anthony 58 Wrote: Call it Andy Stern meets Milton Friedman.

1. Give every U.S. citizen not in jail and over 21 a $12,500 refundable tax credit, indexed annually to the CPI.

2. Subject all income to a flat tax, say 25%, with no exemptions or credits whatsoever - no exceptions - besides #1 above.

3. Abolish the minimum wage altogether.

One side of our political divide wants to judge the poor for their laziness, while the other side wants to judge the rich for their greed.

But how about an economic policy that judges nobody?
Interesting thought experiment. The devil is in the details.

1. Would that $12,500 be given as a lump sum every April 15 or doled out in monthly allotments?
2. No extra allotments given for parents?
3. Would this take the place of benefits such as SNAP (food stamps), free or reduced-price school meals, or subsidized housing, or would those stay?
4. If you are a noncustodial parent, would some of your $12,500 be taken out for child support payments? What about student debt?

I can think of lots of other questions. If you are a single parent with two children working at a job that pays, say $12,000 a year and you are paying 25 percent of that in taxes ($3,000), your net income is only $21,500, which is below the poverty line. With that meager income, you will need food stamps and other benefits just to get by.
Reply
#5
(06-21-2016, 08:44 AM)Anthony 58 Wrote: Call it Andy Stern meets Milton Friedman.

1. Give every U.S. citizen not in jail and over 21 a $12,500 refundable tax credit, indexed annually to the CPI.

2. Subject all income to a flat tax, say 25%, with no exemptions or credits whatsoever - no exceptions - besides #1 above.

3. Abolish the minimum wage altogether.

One side of our political divide wants to judge the poor for their laziness, while the other side wants to judge the rich for their greed.

But how about an economic policy that judges nobody?

The only fair tax system is a progressive tax, not a flat tax. Yours is the Republican proposal; it is maximum neo-liberalism. Steve Forbes, Herman Cain and Ted Cruz proposed it. Flat taxes hit the middle class much harder than the rich, because it takes a larger portion of non-discretionary income. With the cost of living so high, the middle class under this flat tax would pay more and more for the increasing costs of government, unless it is decreed (as Trump wants) that the government quickly go broke and default. Minimum wages need to be increased to $15 an hour; not abolished. Otherwise people get paid a non-living wage. I am not opposed to differences in different places, but $15 is a working minimum proposal. Hillary says $12, I believe; Bernie says $15.

The rich are greedy; that's not a judgement, but a fact. Their economic behavior must be controlled. The neo-liberals call the poor lazy, but the fact is that they have tattered the safety net so much that it doesn't matter; there is no welfare now to speak of for the lazy to live on. A refundable credit would be an expansion of the current earned income credit, which might be a good alternative to welfare.
"I close my eyes, and I can see a better day" -- Justin Bieber

Keep the spirit alive;
Eric M
Reply
#6
(06-29-2016, 12:00 PM)The Wonkette Wrote:
(06-21-2016, 08:44 AM)Anthony Wrote: Call it Andy Stern meets Milton Friedman.

1. Give every U.S. citizen not in jail and over 21 a $12,500 refundable tax credit, indexed annually to the CPI.

2. Subject all income to a flat tax, say 25%, with no exemptions or credits whatsoever - no exceptions - besides #1 above.

3. Abolish the minimum wage altogether.

One side of our political divide wants to judge the poor for their laziness, while the other side wants to judge the rich for their greed.

But how about an economic policy that judges nobody?
Interesting thought experiment.  The devil is in the details.

1. Would that $12,500 be given as a lump sum every April 15 or doled out in monthly allotments?
2. No extra allotments given for parents?
3. Would this take the place of benefits such as SNAP (food stamps), free or reduced-price school meals, or subsidized housing, or would those stay?
4. If you are a noncustodial parent, would some of your $12,500 be taken out for child support payments?  What about student debt?

I can think of lots of other questions.  If you are a single parent with two children working at a job that pays, say $12,000 a year and you are paying 25 percent of that in taxes ($3,000), your net income is only $21,500, which is below the poverty line.  With that meager income, you will need food stamps and other benefits just to get by.

$12,500 is too little.  Also the flat tax will eventually results in high unemployment and widespread misery.  A different version with a higher guaranteed income and a higher tax rate, say about 100K and a 70% rate for income above thatmight be made to work, but still would have lots of problems
Reply
#7
1. Probably monthly payments would be the way to go - so that those who commit misdemeanors and serve, say, three or six months in jail, don't get paid for when they are serving that time.

2. No allotments for parents - because a large part of the intent of the plan is Malthusian: Hold population growth down, quite possibly even to zero, by disincentivizing large families.

3. And yes, all or most such programs would be done away with - at least that's how Milton Friedman envisioned it.

4. Only money earned over and above the refundable tax credit would be eligible for garnishments for child support, etc.; as for student debt, a trade-off could be made: There would be no consideration made for student debt, but after 20 or 25 years, student debt could be made dischargeable in bankruptcy, provided of course the debtor otherwise qualifies.

And you couldn't sell a guaranteed annual income and a 70% top tax rate to the American voters - at least not so long as any voters with even childhood memories of the Cold War are still alive.

And maybe if you're a single parent and you're only clearing $21,500 a year the presumably illegitimate children would end up in a presumably faith-based orphanage - making the plan an easy sell to evangelicals?
"It was better with them that were slain by the sword, than with them that died with hunger, for these pined away being consumed for want of the fruits of the earth" - Lamentations 4:9
Reply
#8
Anthony Wrote:Call it Andy Stern meets Milton Friedman.

1. Give every U.S. citizen not in jail and over 21 a $12,500 refundable tax credit, indexed annually to the CPI.

1. I agree wrt jailbirds.  However, I'd ditch the burdensome fees,fines,charges for jailbirds. The current financing in Oklahoma at least of the criminal justice system with said fees/fines is stupid. We have a revolving door due to failure  to pays [because folks CAN'T pay]  situation in Oklahoma.

Quote:2. Subject all income to a flat tax, say 25%, with no exemptions or credits whatsoever - no exceptions - besides #1 above.

1. What about FICA and Medicare?
I'd get rid of the Medicare payroll tax, Medicaid, CHIP, and everything else , set the Medicare age to 0, and use a VAT tax to pay for it. The VAT tax paid vs. insurance premiums paid now should wash out. I'd also ensure all medical goods and services are put out to bidding.

Quote:3. Abolish the minimum wage altogether.

I can't go with that. There is a balance of power problem between individuals who market labor and employers.


Quote:One side of our political divide wants to judge the poor for their laziness, while the other side wants to judge the rich for their greed.

But how about an economic policy that judges nobody?

The current system is fucked up. ALL income should be taxed at the same level, regardless of source. This also makes for a spaghetti tax code we have now. I'd just prefer to nuke the whole thing and start over.

1. Yes, for sure trash all deductions/credits, period.
2. A simple x,y tax.  You make x amount, you pay y tax.
3. Medical is single payer, financed by a VAT tax. Collapse all medical programs into Medicare and save on all of those agencies we have now and get rid of health insurance companies. Health insurance companies are economic leeches. They add no value whatsoever in the provision of health care.
4. The EITC, yeah, $12,500 credit for earned income. Work is good for folks.

Quote:The only fair tax system is a progressive tax, not a flat tax. Yours is the Republican proposal; it is maximum neo-liberalism. Steve Forbes, Herman Cain and Ted Cruz proposed it. Flat taxes hit the middle class much harder than the rich, because it takes a larger portion of non-discretionary income. With the cost of living so high, the middle class under this flat tax would pay more and more for the increasing costs of government, unless it is decreed (as Trump wants) that the government quickly go broke and default. Minimum wages need to be increased to $15 an hour; not abolished. Otherwise people get paid a non-living wage. I am not opposed to differences in different places, but $15 is a working minimum proposal. Hillary says $12, I believe; Bernie says $15.

I think it should be based on the cost of living in different areas.  If the minimum wage gets too high lots of folks will get replaced by robots.

Quote:The rich are greedy; that's not a judgement, but a fact. Their economic behavior must be controlled. The neo-liberals call the poor lazy, but the fact is that they have tattered the safety net so much that it doesn't matter; there is no welfare now to speak of for the lazy to live on. A refundable credit would be an expansion of the current earned income credit, which might be a good alternative to welfare.

Well, if the special max on capital gains gets set to what the earned income rate is, that's a start. The income tax should of course be progressive, but folks will argue until the cows come home on what the proposed rates will be.
---Value Added Cool
Reply
#9
But if I had to predict, we are going to end up with the income tax being replaced by a national sales tax once the Republicans get a filibuster-proof majority in 2018.

And once the income tax is gone, it's gone forever, because no future candidate or party could ever campaign on bringing back the hated IRS and hope to get elected.

Erica Grieder's book Big, Hot, Cheap & Right could very well be where the entire country is headed.
"It was better with them that were slain by the sword, than with them that died with hunger, for these pined away being consumed for want of the fruits of the earth" - Lamentations 4:9
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)