The alternative to the living wage.

[Heywood]

How do we pay for this? I just did a rough calculation of 25,000 (dollars paid per individual) by 300 million (rounded down total population of U.S.) and came up with $7,500,000,000,000 per year. I like the idea, just would like to know how this doesn't put us further in debt.

$25,000 is the exemption. A universal basic income would be about half....so now we are talking about 3.25 trillion a year which is close to what we spend now. Because there is no minimum wage, business profits would be higher which translates into even more income for the government to re-distribute. Taxes might still have to be raised, but such a system is not untenable.

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Ignoring for the moment that neither alternative is as politically easy to accomplish as a living wage bill (which itself ain't easy).

1. Let's see a realistic example. A 50% tax over 25k is ludicrous, and changing either number would substantially alter how palatable such an scheme would be - as would making the rate progressive. As it stands, it looks very ad hoc. Would you do away with deductions and exemptions? How is unearned income treated? Business income? How are capital gains treated? What consequences do you anticipate?


2. Where's the money coming from? Is the tax code otherwise the same as it is today or something else? Really, the same questions in 1) apply here too.

Tax code should very much be simplified with only individual exemptions remaining. Instead of taxing corporate earnings and then taxing dividends. Just tax dividends at the individual rate. Corporate tax rate would be 0 on all profits except those retained by the corporation.

Tax rate would be progressive, I used a flat tax for simplicity. But if you earned $25,000 your effective tax rate would be 0. You have to earn at least $50,000 before your effective tax rate is 50%. You could implement it, so that once you earn above $25,000 the positive tax rate is progressive which taps out at a maximum of 50%. I wouldn't do brackets either. Tax rates should be progressive based on a function and not arbitrary brackets.