Basic Income and Wealth Tax (Fixing America 13)

2017 March 19

NOTE: As of 2017 I’ve come to conclude that the US government is largely in the hands of “Dark Triad” personalities, and it’s not in the nature of people with those psychological traits to effect the sort of solution (below) that I believe is necessary to fix America in any meaningful way… which leaves me in a quandary. I have to write an article with ideas that would certainly help solve the most serious problems for those people (and for just about every other American, for that matter). People with those particular personality traits, though—the narcissists, psychopaths, and Machiavellians of the Dark Triad—have no interest whatsoever, not in articles and solutions like these. They’re the destroyers, the Shivas of human civilization who carry us into great wars and economic collapse, so that a new world civilization can rise later from the debris. Writing this article is like writing an architectural guide for wrecking ball operators. Still, for what it’s worth….

The American public today (understandably) distrusts its government.

So the first step in fixing the new America is to regain people’s trust… not through the usual deception and propaganda typified by Machiavellians, but with solid, honest action.

In this article I’m going to offer a fair and reasonably simple (though radical) solution that’s almost certain to work to just about everyone’s benefit. I’ll write it in the traditional inverted-pyramid framework for newspaper writing, starting with the most important, sacrosanct elements, then working down into the less and less important, supporting items. Once I flesh out the overall structure of the solution, we’ll then look at America’s many social, political, and economic ills and how they would be cured by this solution, almost as though a miracle salve were applied. So the article will look like this:

  • Part 1, main ingredients.
  • Part 2, secondary ingredients.
  • Part 3, problems solved.

(Bear in mind, the solution is geared exclusively for the USA at this point in time, where the individuals, families, and corporations at the top of the economic ladder have vast wealth… as in no other time in history. The solution outlined here will certainly work in the USA at the present time. In other countries, under other economic conditions, the details outlined here would have to be adjusted accordingly, though the basic premise would probably work everywhere.)

Part One: Basic Income and Wealth Tax

The two main ingredients of the solution are a basic income program (to make sure no one falls between the cracks into destitution) and a wealth tax to support it. These two items are non-negotiable, although the specific amounts ($1,000 per month and 3% per year) would be determined by experts who can crunch the math and statistics around factors like adult US population and total national wealth.

  • Basic income would provide a monthly stipend (maybe $1,000), tax-free, to every adult citizen. Essentially, everyone would get $12,000 a year just for being a grown-up, diligent, participating American citizen.
  • A wealth tax of, say, 3 percent would be paid annually by every adult US citizen or family, by every private group (corporation, small business, private school, co-op…), and by every adult non-citizen resident in the USA. (That is, adults living in the USA who are not getting basic income because they’re not citizens would nonetheless pay a wealth tax.)

The two variables—basic income amount and percentage of wealth—would be the same for every citizen. Non-negotiable. No sliding scales to account for the rich or for the less fortunate.

Those would be the two cornerstones of the new America. Very simple, very elegant, and very effective at eliminating most of the current ills that afflict society and economics here in the States.

Then we have to start thinking about the supporting details that will keep it all stable and healthy. For simplicity’s sake, I’ll use the numbers $1,000 (monthly basic income) and 3% (annual wealth tax) in the rest of the article, unless stated otherwise.

Part Two: Secondary Ingredients

There are lots of supplemental details that are open to debate and adjustment by whoever’s in charge of government at the time. Some of the important extras are listed below, roughly in the order of importance, starting with the most important.

Penalties for hidden wealth. Anyone hiding their wealth (whether it’s a family’s  bullion buried in the back yard, or a billionaire’s booty in an offshore  bank, or a corporation’s undisclosed foreign assets…) would be heavily fined, once discovered… maybe on a sliding scale determined by the magnitude of the crime… from, say, 10 percent of a small family cache up to maybe 50 percent from a hedge fund schemer. A substantial penalty would reduce temptations among wealthy men, particularly those of the Dark Triad, who find gratification in deceptive practices and in amassing great personal wealth, often at the expense of others.

In other words, at the heart of a wealth tax is an unequivocal agreement (or concession) by everyone to share a small percentage of their wealth for the greater good. Given the savage side of human nature, the “sharing” would probably have to be enforced. And that scenario is probably the only way for the current Machiavellian government regime to earn any level of genuine trust from the people.

Active participation. Everyone receiving basic income is expected to participate in the activities of society, for example paid work (jobs and careers) or volunteer work or raising a family.  Even disabled and sick individuals are encouraged to participate to the extent they can while receiving basic income. Nonfunctioning addicts and alcoholics would be encouraged to rise above their disease and function in order to get basic income. Most of the prison population (all but repeat, violent offenders and the incorrigible) would be released and absorbed into society, with the understanding that they all participate. The idea isn’t so much, “no free rides.” It’s more, draw everyone out into society and help them feel a part of things. Programs in northern Europe are finding that the most effective cure for addiction and crime is getting people involved. It’s in our service to others that we humans really feel our worth.

Healing social ills. Drug addiction and crime would be dramatically reduced as described in the preceding paragraph. Homelessness would be all but eliminated once everyone is receiving basic income. Homeless shelters could adjust their business models so that homeless residents can reserve a bed plus meals for, say, $300 a month or $15 a night. They might even set up accounts to help residents manage their basic income… but again, in order to deter temptation there would be heavy penalties against anyone trying to swindle basic income recipients.

Acceptable volunteer work. A long, flexible list of acceptable volunteer positions would have to be maintained, mostly at the neighborhood and community level, to include all sorts of activities that are healthy to society: repairing the infrastructure (especially communication and transportation networks) or serving at humane societies or in churches or preserving the ecosystem or restoring old neighborhoods or pursuing face-to-face, collaborative efforts in literature, music, and the arts….

Reduce oil dependency. New public programs, drawing heavily from the volunteer pool, could include a nationwide mag-lev (magnetic levitation) network for super-high-speed transportation that is not fueled by hydrocarbons. The project could be guided and sponsored by government agencies (to ensure a broad, comprehensive perspective of the emerging network) and materialized by entrepreneurs like Elon Musk (who’s already toying with the technology). European countries are also exploring “dualmode” systems that merge personal vehicles with public transport… and Joshua Zev Levin’s website offers a veritable bazaar of futuristic ideas.

Reduce other taxes. Americans would be less heavily taxed on the money they earn each year (income and capital gains tax) once they are paying wealth tax on all of the products they own and all the money they have invested someplace… their “basic, material worth.”

Reduce welfare. Most welfare and social security programs could eventually be phased out, but it would happen gradually, over a period of a generation or two. At first, everyone who is currently receiving welfare or social security payments from the government would simply have their benefits reduced by $1,000 per month as soon as the basic income program begins. Then, welfare would steadily shrink in the coming years. For example, aid to dependent children would be eliminated 20 years or so after the basic income program begins. If a single mom has five children at the time the program begins, the family would still need extra support that she currently gets from welfare. That extra support could then be reduced by, say, 5 or 10 percent per year until she is only getting basic income. By then her kids will probably be adults. Once basic income starts, she’ll receive no extra welfare for additional children that she adds to her family from that point on. The overall effect, of course, is to encourage all adults to have small families (0, 1, or 2 kids) unless they earn enough personal income or have enough wealth to afford large families.

No more minimum wage. With basic income, the economy and the unemployed (probably) would no longer need a legal minimum wage. Important but hard-to-fill volunteer positions could be made more appealing with a small hourly supplement of a few dollars, which volunteers receiving basic income could use to bolster their budgets.

Low-paying jobs and non-citizens. The fact that only citizens get basic income would discourage some but not all immigration of poor foreigners into the USA. Businesses would naturally try to attract poor resident aliens who do live here (without basic income) by paying them decent wages for jobs that aren’t scooped up by citizen volunteers.

Educated non-citizens. Foreign doctors, professors, and other highly paid professionals would still be attracted to (and welcomed by) the new USA. The relatively small basic income payments received by their also-well-paid American colleagues would have little or no overall effect on well-compensated professionals and wealthy non-citizens living here. Hm, it’s probably important for wealthy non-citizens (citizens of other countries) living in the USA to be able to keep most of their wealth in their homeland so it is not taxed here in the States.

Land and resources. The national wealth tax probably would not be assessed on land and resources (raw materials that have not yet been converted to products). Mines and parcels of land would not be subject to wealth tax, but vehicles, buildings and other products sitting on the land would be. Property taxes imposed by states and counties might continue to be levied, but only on the value of the land itself and mineral rights that are owned by people or groups.

No double taxation. Wealth tax would become the fundamental American tax, and all other taxing authorities (state, county, city, school district, fire protection district…) would adjust their taxes accordingly to make sure that people aren’t double-taxed for anything. Sales tax could remain in effect. If local, state, district, and regional governments have trouble sustaining themselves in the federal-wealth-tax environment, then maybe “trickle-down” federal support could be applied to the states.

Annual adjustments. The basic income amount ($1,000 per month) and the wealth tax percentage (3% per year) could be adjusted annually, as necessary.

Part Three: The Benefits

Here in the States, the two main ingredients in the solution (basic income and wealth tax) would almost overnight…

  • Lift the least fortunate Americans to a level of sustenance. Studies have found that irresponsibility doesn’t really cause poverty; more often, poverty causes irresponsibility, Lift people out of poverty with basic income and they’ll feel responsible… important… a more valuable part of society.
  • Gain the vast majority’s trust in and allegiance to the current leadership,
  • Build a rock-solid base for the US economy, and
  • Set in motion a natural series of healing trends:
    • Shrink government and welfare rolls to manageable levels,
    • Discourage poor foreigners from emigrating to the USA,
    • Discourage underprivileged people, especially the poor, from having lots of kids,
    • Greatly reduce and simplify (perhaps eliminate, at least temporarily) existing taxes such as income and capital gains taxes.
    • Narrow the huge economic gap between rich and poor.

The secondary ingredients would provide the needed support to keep the overall solution vital and effective over the long run. They would…

  • Eliminate homelessness,
  • Greatly reduce addiction to drugs and alcohol,
  • Nearly empty the prisons,
  • Make unemployment a moot issue,
  • Ensure every adult is active and involved in society, whether working or volunteering or raising a family, and
  • Wean America slowly away from oil dependency.

What we’re talking about is a society that is nearly utopian, and of all of the civilizations and societies throughout history, it’s the USA today that is in the best position to make it happen. America has the rich, raw ingredients, especially a super-wealthy top tier of society. It’s perhaps a once-in-5,000-year opportunity.

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About Mark Macy

Main interests are other-worldly matters (www.macyafterlife.com) and worldly matters (www.noblesavageworld.com)
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