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Steve
Thailand
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Since Ronald Reagan the US has experimented with supply side economics and low taxes on high income earners. I think it is obvious at this point that this experiment has been a failure.

I'm going to cut to the chase and propose my thoughts on solutions.

I'm going to start with talking about a UBI. A UBI seems to be necessary at this point to combat the effects of automation and globalization. A UBI does away with all of the welfare states' rules and bureaucracy, with unemployment insurance, withminimum wage laws, as well as with most of Soc. Sec.'s payments.

It seems to me that instead of depending on economic growth Western Civilization needs to find a steady state system that is stable. It is perfectly clear that economic growth can not continue at a steady 2-3% growth because exponential growth can not continue forever on a finite planet and moving 200,000 plus people off the planet a day is not possible.

Since money naturally flows up the economic ladder from the poor to the rich, it is necessary [in a stable equilibrium system] for the Fed. Gov. to take money from the rich and give it to the poor (= unemployed). Then the money will again flow up to the rich to again be taken from them and given to the poor, etc., forever.

This requires a high income marginal tax rate (about 90%) for the highest bracket and a net wealth tax [again with a high rate at the very top]. The whole point of this system is to not let the wealthy compete to see who can acquire the most money, which they then show off with conspicuous consumption. Instead the wealthy compete to earn the most money which they then give away to avoid the wealth taxes. These gifts are public, so who gives the most gets the most status points and therefore status. They can give to the Gov. or to charities, etc.

I propose that the level of net worth where the 90% tax rate kicks in be set relative to the UBI payment by Constitutional Amendment. Lock it in and it will be very hard to adjust. I propose that this net worth level [NWL] be set at the square of the UBI payment. For example, if the UBI is set at $2,000/mo. = $24,000 a year then the NWL will be 24 x 24 x 1000 x 1000 = $576M. A half a billion seems like plenty as the highest net worth that is allowed. Setting the NWL in this way means that the rich have a reason to increase the UBI rather than a reason to cut it.

Now that Corps. are considered to be people for most purposes, we can tax them the same as people. This will let us tax their income [revenue (which is hard to fiddle with) OR profits (which is much easier to fiddle with)] and net worth with rates that are much like confiscation. Again this is done to keep them from growing too powerful [powerful like they are now].

I also propose that the NWL for corporations also be set relative to the UBI payment by Constitutional Amendment at 100 X the square of the UBI. In the example, 100 x $24 x 24 x 1M = $57.6B. Or maybe 1000 X the NWL is necessary. [I'm not up on the net worth of corps. these days.] Again the idea is to keep corps. from growing so large that they buy up all the competition and set monopoly prices or compete with the people as a whole for control of the nation.

To clarify the proposal, these new worth tax rates do not go up gradually. Instead they shoot up from close to zero to 90% or so at the NWL set above. There is a very low net worth tax on large corp. just to make them report it year after year. The penalty for cheating on these taxes is about the same as a human would face, some number of years in prison. What “prison” is for a corp. I'll talk about in a different thread.
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Pontifex Maximus
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Milton Friedman, one of the fiercest defenders of capitalism, put forward basically the same idea of UBI with his idea of the negative income tax. People getting a guaranteed income no strings attached. Time to start caring about citizens besides the 1%. A concept obviously beyond the comprehension of the party in power now
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Dickie Crickets
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I admit I'm no economist, but how will this country even work if a majority of citizens don't have disposable income? Doesn't consumer spending drive the whole engine? Or has the economy "evolved" to the point where plutocrats can just shuffle money around?
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Mary Weisbeck
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Sounds reasonable except for one thing: many of the rich in control (of corporations or the country) are ruled by greed. They wear their net worth like a hero's badge and are loathe to give it up just to help the rest of society.
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Andy Beaton
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Excessive wealth inequality is the number one predictor of violent revolutions throughout history. People can live with being poor and eating grass and mud as long as they don't have to watch the lord roll by in his gilded carriage while they do it.
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Mac Mcleod
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Yup.
 
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AMK
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I think you just devised a system such that as expenses (UBI) go up, the revenue (tax from the rich) goes down due to the increasing NWL threshold.

While this could be balanced initially, any change from that equilibrium would wildly imbalance the budget. This plan seems completely unsustainable.

Also, applying a 90% margin tax rate on corporations is a bad idea. Some corporations funnel their profits overseas now because America has one of the highest corporate tax rates in the world. Increasing it from 35% to 90% (even for just the top corporations) would only exacerbate the problem.
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G Rowls
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They have no bread? Let them eat cake instead ...
 
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Steve
Thailand
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Keele047 wrote:
I think you just devised a system such that as expenses (UBI) go up, the revenue (tax from the rich) goes down due to the increasing NWL threshold.

While this could be balanced initially, any change from that equilibrium would wildly imbalance the budget. This plan seems completely unsustainable.

Also, applying a 90% margin tax rate on corporations is a bad idea. Some corporations funnel their profits overseas now because America has one of the highest corporate tax rates in the world. Increasing it from 35% to 90% (even for just the top corporations) would only exacerbate the problem.

Well, if Corps. try to do that then they can't do business in the US.

And Corps. would have to be split up like Standard Oil was over 100 years ago. I'm sure they wouldn't like that much either. So what?

As to your 1st point, we would have to change the rate and the rates of other taxes if changes in the NWL made tax revenues fall.
 
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Jon Badolato
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growlley wrote:
They have no bread? Let them eat cake instead ...


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AMK
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Steve1501 wrote:
Keele047 wrote:
I think you just devised a system such that as expenses (UBI) go up, the revenue (tax from the rich) goes down due to the increasing NWL threshold.

While this could be balanced initially, any change from that equilibrium would wildly imbalance the budget. This plan seems completely unsustainable.

Also, applying a 90% margin tax rate on corporations is a bad idea. Some corporations funnel their profits overseas now because America has one of the highest corporate tax rates in the world. Increasing it from 35% to 90% (even for just the top corporations) would only exacerbate the problem.

Well, if Corps. try to do that then they can't do business in the US.

And Corps. would have to be split up like Standard Oil was over 100 years ago. I'm sure they wouldn't like that much either. So what?

As to your 1st point, we would have to change the rate and the rates of other taxes if changes in the NWL made tax revenues fall.


You stated that your method will create an incentive for the rich to increase UBI. So, what incentive will the rich have to bring up the UBI in order to raise the NWL (reduce their tax) if any lost income from the increased NWL is just going to be made up with increases in other taxes to the rich? Seems like your method provides no incentive for the rich to increase the UBI.

Edit: Or are your "other taxes" not taxes on the rich? I assumed they were, but maybe I misunderstand.
 
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Steve
Thailand
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AMK,
the other taxes are not necessarily on the rich.

There would probably be a VAT for instance.

And some taxes on the middle class.

And taxes on Corps.

I don't expect the NWL tax to bring in that much, it can be avoided by giving your excess net weallth away. Conspicuous giving! Remember.
 
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David Dearlove
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growlley wrote:
They have- no bread? Let them eat cake instead ...

Of course Marie Antoinette probably never said it.
And it's because bread was under price control. When the price of flour sky-rocketed the bakers made brioche instead that they could sell at any price.
So the remark (if said by anyone at all) is actually pretty perceptive and an attempt to sort out a problem.
The world is full of misquotes and misunderstandings.
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J.D. Hall
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aiabx wrote:
People can live with being poor and eating grass and mud as long as they don't have to watch the lord roll by in his gilded carriage while they do it.

Wow. Canada sounds pretty bad...
 
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Andy Beaton
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remorseless1 wrote:
aiabx wrote:
People can live with being poor and eating grass and mud as long as they don't have to watch the lord roll by in his gilded carriage while they do it.

Wow. Canada sounds pretty bad...


Canada is a land of rich natural bounty - we have twigs and grubs as well, which is why our leaders deserve their golden carriages.
 
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fightcitymayor
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Enshrining major redistribution of wealth will be a very hard sell in the USA.
 
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G Rowls
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DavidDearlove wrote:
growlley wrote:
They have- no bread? Let them eat cake instead ...

Of course Marie Antoinette probably never said it.
And it's because bread was under price control. When the price of flour sky-rocketed the bakers made brioche instead that they could sell at any price.
So the remark (if said by anyone at all) is actually pretty perceptive and an attempt to sort out a problem.
The world is full of misquotes and misunderstandings.



Never said she did ;-P cause I know she would not have been old enough nor even in the country at the time and it had already been published as as a saying attributed to a great princess in print in a book at least 50 years before ...
 
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Steve
Thailand
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growlley wrote:
DavidDearlove wrote:
growlley wrote:
They have- no bread? Let them eat cake instead ...

Of course Marie Antoinette probably never said it.
And it's because bread was under price control. When the price of flour sky-rocketed the bakers made brioche instead that they could sell at any price.
So the remark (if said by anyone at all) is actually pretty perceptive and an attempt to sort out a problem.
The world is full of misquotes and misunderstandings.



Never said she did ;-P cause I know she would not have been old enough nor even in the country at the time and it had already been published as as a saying attributed to a great princess in print in a book at least 50 years before ...

I predict that someday when we have translated most of the ancient clay tablets, we will find the thought on one of them. It is time less.

Like Leona Helmsly saying, "Taxes are for little people."
 
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