Poverty and homelessness are reaching epidemic proportions here in the states.
America’s poor are not just being ignored, but victimized by the rich, especially the banks.
A basic income program giving every adult American, tax-free, $1,000 a month ($12,000 a year) would almost eliminate the problem.
The best way to get such an expensive program on its feet would be through a wealth tax, in which other taxes (income, capital gains, sales, value-added, and inheritance) are eliminated or greatly reduced for a year or two while individuals, corporations, and other organizations are taxed primarily on the assets they possess.
Several nations currently impose a wealth tax, including France, Spain, Iceland, India, Netherlands, Norway, and Switzerland… so it’s nothing new.
Here in the States it might require an amendment to the Constitution, which currently prohibits tax on assets unless the revenues are redistributed to the states. On the other hand, the Basic Income program could be instituted at the state level according to national guidelines, making a wealth tax in the States a valid option to fund a basic income program.
If the wealth tax were also to be used to pay off the national debt, then that would probably require a constitutional amendment.
If a one-year, 1-percent wealth tax were imposed while a basic income program were in effect, a person with $1.2 million of assets would break even… in effect, not being taxed at all… since 1 percent of $1.2 million is $12,000, the amount he or she receives in basic income each year. Individuals with less than a million dollars in assets would come out ahead. Couples with $2.4 million in joint assets would break even.
In the case of a 3-percent wealth tax, individuals with $400,000 in assets (or couples with $800,000) would break even.
In any case, a wealth tax coupled with a basic income program would ensure that the poor, many of whom are now homeless and/or drowning in debt, would get their heads above water while the brunt of the tax burden would be carried by the rich, who can afford it. It would quickly bridge the ugly chasm between America’s super rich and super poor.
This is probably the most rational and just solution to America’s current economic crisis: A basic income program funded by a wealth tax.
I don’t know how the scenario would play out. Certainly it wouldn’t be popular among the rich.
Rich people fleeing the country like rats from an urban renewal project (a problem that France faced a few years ago) would probably be viewed as undesirables, and I wouldn’t be surprised if troubles ensued… double taxation by both countries… maybe even a seizing of some hard assets left behind.
Anyone trying to hide certain assets, to avoid taxation, would probably be penalized pretty heavily if found out.
Ultimately a wealth tax and basic income program would be cause for a lot of celebration among the poor and middle classes, and probably some rising dental costs among the rich… due to “gnashing of teeth.”
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