The alternative to the living wage.

[Minimalist]

give the unemployed spoons and have them dig a canal.

If we want to dig a canal these days we hire a guy with a backhoe. Its called automation and it isn't going away.

[Jackalope]

So let's see a realistic example, as I asked for.

Such a wholesale change to tax code is going to incentivize a whole new set of behaviors and disincentivize a great many things that our current tax code incentivizes. Whether we agree on whether those incentives are positive or not, they nonetheless are what they are. Have you considered what impact your scheme ia going to have on the incomes of working families?

Under the examples of negative income tax I gave, a Husband and wife would have a minimum of $25,000 year income if neither earned any income (each gets $12500)....which is enough for a couple to comfortably live off in most of the country. They would not incur any positive tax liability until their combined income exceeded $50,000(remember each gets a $25,000 exemption). If their combine income reached $75000 their net after taxes would be $62500. The would be paying an effective tax rate of about 17%. Add a kid who gets his own exemption and their tax rate decreases even more.

17% is probably substantially more than what their tax liability is now, which is why I asked (I make quite a bit more than the 75K figure in your example, and I assure you my net federal income tax rate is below 17% by a fair margin - and further, I can assure you that a significant change in my tax rate and bottom line would result in some very hard choices).

You start screwing around in a major way with household take-home income, and people are likely to be fucked in a very major way. That's why I asked for specifics of how such a plan might be implemented - and without same, I could not say whether it's a boneheaded idea, or brilliant. The actual numbers matter - the devil is entirely in the details.

It sounded like an ad hoc proposal at first, and nothing you've said has convinced me that it's not something that's been pulled out of your ass.

Would people be better off? Maybe. But your example is admittedly overly simplistic and not representative of what the implementation would be like in actuality - so I personally can't consider it anything more than a curious idea at this juncture.

Oh, and I said at the beginning I would for the moment ignore one absolutely salient point - it's a complete political non-starter with about a zero chance of actually being passed by Congress any time soon.

[FlyingNarwhal]

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.

Ok that sounds doable. As your explaining it, I'm liking the idea of it more and more. I think that this kills two (or maybe several) birds with one stone. It gives a universal safety net, allowing people to not worry about hitting complete bottom and autonomy in their career choice. It also provides for the fact that their will always be a certain amount of the population that will try and do the least amount of work possible, which if I'm getting this correctly could give employees better leverage in determining their wages. If everyone automatically has enough money to live minimally without a job even if they choose to work, and a portion of the population chooses not to work, that means there would be a higher demand for employees. McDonald's can pay $8.00 an hour and not give a raise because they have their employees by the balls, there is a lot of people looking for work and only so many jobs. If I have the money to walk out any time and not worry about starving, and if there are less people willing to work, it means at the end of the year the cashier can leverage a raise out of his employer.

---

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.

Show your work.

Not the calculation, but the basis for your assumptions.

It was just a question, I just wanted to know how/if it didn't add to the national tax burden.

[Heywood]

17% is probably substantially more than what their tax liability is now, which is why I asked (I make quite a bit more than the 75K figure in your example, and I assure you my net federal income tax rate is below 17% by a fair margin - and further, I can assure you that a significant change in my tax rate and bottom line would result in some very hard choices).

Lets say kids under 18 get a $10,000 exemption. A family of 4 with an annual income of $75,000 would pay $2500 dollars in taxes....or an effective rate of 3.5%.

This system eliminates social security so families would no longer be paying those payroll taxes which are currently 6.2%. Your total tax burden could be even smaller under such a system. I think it would be for most.

You are right, these are just numbers that I am pulling out of my ass. I don't know if these numbers would generate comparable governmental revenues. The point of this thread is not propose a plan you can vote on, but to show people there are alternatives which take care of people, don't restrict individual freedom, don't involve big expensive government, and don't involve governmental monkeying with the labor markets(which always leads to winners at the expense of losers).

.

[Tonus]

1. A negative income tax.

I've seen this referred to as a 'diagonal tax.' Set a standard deduction and then a flat rate on all income past that amount, so that lower-income earners are taxed at a much lower rate. Perhaps apply a similar formula to businesses based on size or profitability? Find a way to make it more attractive to turn a larger percentage of profits into salary?

The universal income is interesting, though I can imagine it would be a logistical nightmare to manage. Just determining who is eligible (anyone 18 and over? More for families?) would take a long time and the apparatus needed to try to minimize waste and corruption might wind up as the prime source of waste and corruption. But at the same time, we may need to do something like this before long.

[Heywood]

Ok that sounds doable. As your explaining it, I'm liking the idea of it more and more. I think that this kills two (or maybe several) birds with one stone. It gives a universal safety net, allowing people to not worry about hitting complete bottom and autonomy in their career choice. It also provides for the fact that their will always be a certain amount of the population that will try and do the least amount of work possible, which if I'm getting this correctly could give employees better leverage in determining their wages. If everyone automatically has enough money to live minimally without a job even if they choose to work, and a portion of the population chooses not to work, that means there would be a higher demand for employees. McDonald's can pay $8.00 an hour and not give a raise because they have their employees by the balls, there is a lot of people looking for work and only so many jobs. If I have the money to walk out any time and not worry about starving, and if there are less people willing to work, it means at the end of the year the cashier can leverage a raise out of his employer.

What it does is create an environment where the labor market consist of those who want to work to better their lives instead of a labor market consisting of those who only want to work to get by. The work force would be more productive.

Would such a system generate comparable governmental revenues as today? I don't know. It wouldn't need too though because huge swaths of government go away. Social security and all the bureaucrats who administer that program....gonzo. Food stamps and all the bureaucrats who administer that program....gonzo. Unemployment compensation and all the bureaucrats who administer that program....gonzo. I could go on and on.

One area I see where it would increase government spending is military. The military would have to pay higher to recruit...and if there were a particularly bloody conflict....we might have to conscript(but I think that is the case today).

[A Theist]

Starving and freezing... or looting...

I choose looting, every time. Repossession is three fifths of the law.

Until someone breaks into the wrong place. Then they wouldn't have to worry about looting and robbing anymore. Possession of firearms is protected by the 2nd amendment.

[RaisdCath]

Uhhhhh......two jobs??

[Ryantology]

https://www.paychex.com/jobs-index/

Quick question: if raising the minimum wage is supposed to destroy job growth, why is the state with the highest small business job growth (Washington) the same as the state with the highest minimum wage (Washington)?

Oh, and it's the same on a municipal level, too. San Fran: highest minimum wage, highest small business job growth. Seattle's right behind.

I mean, if a minimum wage really wrecks small business, you wouldn't expect to see so many states and cities with a minimum wage above the federal mandated level so high on these lists. And yet, oddly enough, that's exactly what you see on these lists. It's almost as if having more money in the hands of regular people boosts small businesses because those people have the freedom to spend more money on things that aren't necessities (which is what most small businesses peddle), or something crazy (and absolutely predictable) like that.

[Anomalocaris]

It's not clear to me at all that the economy is incapable of supplying productive (as opposed to make work) employment to all. It seems to me much of the obstacle to job creation in the last 5 years come from a risk-reward calculation by major equity holders that discourage investments. It would be interesting to analyze whether the risk-reward assessment of major equity holders are consistent with, or antagonistic to, the risk reward assessment of the economy overall.

If they are inconsistent, then the government policy should be to interfere in the structure of rewards to large equity holder in such a way as to bring them closer to the reward structure for the rest of the economy.

Ie. you won't benefit at all unless overall economy as well as median income grows.