Fixing America (3): More Thoughts on Basic Income

The more I learn about wealth and poverty and the human mind, the more excited I become about instituting a Basic Income program here in the States (as I proposed in my previous article)… and ultimately throughout the modern world. In recent days I’ve come up with three more points about Basic Income.

Bad decisions don’t cause poverty; poverty causes bad decisions

We often assume that people become poor because they’ve made bad decisions. I learned recently that the opposite is true: When you live in poverty, bad decisions become a way of life… and you become trapped. Without something like Basic Income to raise every poor person out of that trap, unconditionally, the poor classes will continue to suffer more than most of us can even imagine.

Here’s what one woman, Linda Tirado, (who’s not only poor but bright and brazen) writes on her blog:

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don’t pay a thing and a half this week instead of just one thing?… Poverty is bleak and cuts off your long-term brain. It’s why you see people with four different babydaddies instead of one. You grab a bit of connection wherever you can to survive. You have no idea how strong the pull to feel worthwhile is. It’s more basic than food…. We don’t plan long-term because if we do we’ll just get our hearts broken. It’s best not to hope. You just take what you can get as you spot it….

Read that piercing article…

A more scholarly article published in Science finds that poverty does indeed upset the brain’s decision-making abilities. People trapped in poverty develop a sense of hopelessness in which long-term plans seem like a waste of energy.  Bad decisions and short-term gratification become the only way of life that makes sense. Expecting them simply to grab themselves by the bootstraps and pull themselves out of poverty is glib, callous, and unrealistic.

Read an article that ties it all together neatly…

Unless something like Basic Income raises them above their hopeless state, the poor will probably remain poor and desperate.

Tie basic income to volunteer work

In exchange for receiving basic income payments, everyone could be expected to provide service to society. People who are not already involved in a job or a career could be mandated to volunteer so many hours a month at churches, homeless shelters, charities, national parks, road construction sites, and other not-for-profit groups that are helping those in need, rebuilding the infrastructure, or protecting the environment.

Tax total assets, not income

To pay for a Basic Income program and to pay off a large chunk of the $17 trillion national debt, I think it makes more sense to tax everyone’s total wealth, not just their annual income and capital gains. It would be a tax on the assets of households, corporations… everyone. It could be a one-time tax to kick-start the American economy, which is in a sad state of affairs at the moment.

With income and capital gains tax a mainstay in the American way of life, many of the country’s best and brightest have become CPAs and tax attorneys dedicated to finding loopholes and tax evasions for the rich.

A total-assets tax would neutralize all of that misplaced yankee ingenuity. We could cancel income taxes for one or two years and replace it with a total-wealth tax of, say, 1 percent or 10 percent or something in between… depending on how much of the national debt we wanted to pay off.

So the fish-tank diagram in the last article could be updated, as shown below…

Federal government’s current budget, with revenues from income tax, capital gains tax...: $3.8 trillion.

Federal government’s current budget, with revenues from income tax, capital gains tax…: $3.8 trillion.

Taxing the total assets of all Americans (households, businesses, banks...) anywhere from 1 to 10 percent would drastically reduce inequalities in the US economy while kick-starting a Basic Income program and paying off some or all of the national debt.

Taxing the total assets of all Americans (households, businesses, banks…) anywhere from 1 to 10 percent would drastically reduce inequalities in the US economy while kick-starting a Basic Income program and paying off some or all of the national debt.

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Total US assets (represented above as water in the fish tank) are today around $200 trillion.

Read more about that…

So, replacing the income tax for one year with a 3 percent tax on total assets would provide a federal budget of $6 trillion.

An assets tax would be a lot more popular at the bottom of the fish tank than at the top, where the fewest number of people and corporations have the most assets.

It would instantly shrink the gap between rich and poor to a more sane level.

It would pay off much of the national debt.

And it would get a Basic Income program on its feet.

The poorest Americans would be lifted out of their hopelessness.

If anyone wants to pass a petition to get this kind of a Basic Income program on the national ballot, I’ll be the first to sign up!

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Other articles in the Fixing America series:

Northern Europe Does it Right
1  The Problems
2  Basic Income, One Solution
3  More Thoughts on Basic Income
4  Wrap-Up on Basic Income and Wealth Tax
5  Basic Income and the Fertility Rate
6  Restoring a Good Reputation
7  Contending with Savage Forces
8  Being a Noble Force
9.  A Comprehensive Solution
10. Marching Toward the End Time
11. The Destructive 1 Percent
12. Overcoming America’s Oil Addiction

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About Mark Macy

Main interests are other-worldly matters (www.macyafterlife.com) and worldly matters (www.noblesavageworld.com)
This entry was posted in Politics and Economics, Worldly matters and tagged , , . Bookmark the permalink.

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