How to Pay for Basic Income
The trillion-dollar question facing basic income advocates is how to pay for it. Here are a few very broad and rather vague suggestions.
The best way to finance Basic Income in America would be an individual income tax. That would leave the corporations which generate wealth, untouched but reduce income inequality.
A Progressive Income Tax to Finance Basic Income USA
Here is my suggestion for a progressive income tax to finance basic income.
1. There would be no tax on household and individual annual incomes under $100,000.
2. A 5% income tax would apply to all individual and household incomes over $100,000 a year.
3. The income tax goes up to 15% at $200,000 a year.
4. The income tax rises to 38% at $250,000 a year.
5. The income tax rises to 50% at $500,000 a year.
6. The income tax rises to 60% at $10 million a year.
7. The income tax rises to 70% at $100 million a year.
8. The income tax rises to 80% at $1 billion in annual income.
9. The income tax rises to 90% for incomes over $10 billion a year.
All of the taxes mentioned here shall be automatically indexed and adjusted for inflation. Therefore, middle class people will not be hit with income tax in a decade or so.
Since the tax is progressive the higher rates only apply to moneys over the level they start at. Half the moneys collected would go to finance the federal government the other half would go to the Sovereign Wealth Fund which would finance the Basic Income.
These moneys would be addition to the Medicare and Social Security Taxes which would be collected on all individual income. Those rates would be determined elsewhere.
The greatest benefit this system would be to eliminate the large fortunes that are doing so much damage to our social and political fabrics. Another benefit would be to generate enough tax revenue to eliminate the budget deficit.
Why We Should Tax Corporate Revenue
Corporations should be taxed on revenue, because the revenue is all the money the corporation takes in. Thanks to modern accounting revenue often greatly exceeds corporate income.
America’s largest standalone grocer, Kroger (NYSE: KR) reported $122.662 billion in revenues for the 12 months that end on February 3, 2018. Yet it reported just $1.907 billion in net income for that period.
Everybody’s favorite gadget maker Apple (NASDAQ: AAPL) reported $229.23 billion in revenues for 2017. Apple’s $48.35 billion net income for 2017; was less than a quarter of the revenue.
That means an income tax would affect less than 1% of Kroger’s money and less than 25% of Apple’s revenue. A revenue tax would reflect the corporation’s value.
A Corporate Revenue Tax Proposal
Here are my proposed rates for the corporate revenue tax.
· 1% on all annual corporate revenues that exceed $1 million.
· 2% on all annual corporate revenues that exceed $100 million.
· 2.5% on all annual corporate revenues that exceed $1 billion.
· 3% on all annual corporate revenues that exceed $25 billion.
· 4% on all annual corporate revenues that exceed $50 billion.
· 5% on all annual corporate revenues that exceed $100 billion.
This would fairly tax corporations in a way that would not limit their operations. Half the corporate revenue tax would go to the federal government and half to the Basic Income.
Such a system would encourage economic growth because it would tax those who spend the money. The tax burden would be shifted away from the corporations that generate the wealth to the wealthy.
A Luxury Housing Tax for Basic Income
I’m leery of luxury taxes, because luxury is extremely hard to define. Despite that, we should try to tax luxuries because it is a good way to collect from tax evaders.
Here is my proposal for a luxury housing tax. Half the luxury tax would go to the federal government the other half to basic income.
· A 2.5% luxury tax on all housing purchases over $500,000.
· A 5% luxury tax on all housing purchases over $1 million.
· A 10% luxury tax on all housing purchases over $10 million.
· A 5% tax on real estate agent’s commissions.
One benefit of this would be to force housing prices back down as buyers try to avoid the tax. If the rich want to run real estate prices through the roof and deprive average people of housing they should pay for the privilege.
Luxury Taxes for Basic Income
Other luxury taxes would include:
· A 2.5% tax on collectibles and antiques that cost more than $500.
· A 3% tax on all clothing that costs more than $1,000.
· A 2.5% tax on all jewelry.
· A 2.5% tax on all vehicles that cost more than $100,000.
· A 2.5% tax on all vacations that cost more than $10,000.
· A 5% tax on private planes and charter plane services.
· A 2.5% tax on residential rents and leases that exceed $5,000 a month.
· A 5% tax on residential rents and leases that exceed $10,000 a month.
· A 10% tax on residential rents and leases that exceed $20,000 a month.
· A 10% tax on all political donations.
· A 2.5% tax on video games, video downloads, audio downloads, and multiplayer games.
Some Other Taxes to Finance Basic Income
Some other taxes to finance basic include:
· A 2.5% tax on investment and financial transactions
· A 2.5% tax on cryptocurrency transactions.
· A 2.5% tax cryptocurrency mining.
· A 2.5% tax on data mining.
· A 2.5% tax on digital advertising.
· A 12% tax on automated factory production.
· A 5% on items produced by robots.
· A 2.5% sales tax on candy and soda pop.
· A 10% tax on political donations.
· A 25% tax on lobbying fees.
· A 10% tax on legal fees.
· A 10% tax on accountants’ fees.
· A 15% tax on all wealth transferred outside the country.
· A 5% tax on all gambling transactions.
· A 10% tax on all gambling transactions that exceed $10,000.
· A 5% tax on fantasy sports.
· A 2.5% tax on all sports, theme park and theater tickets.
The proceeds from these taxes will be split 50/50 between the federal government and the sovereign wealth fund.
Tax Suggestions for Basic Income
· A 12% tax on all royalties and revenues from oil, gas, and mineral extraction. One fourth (3%) of the proceeds of this tax will go to state governments, a quarter (3%) goes to local governments, another fourth (3%) goes to Basic Income, and a final fourth (3%) goes to the federal government.
One thing is clear we need a tax system that works for everybody. Not just the rich.
These proposals first appeared at Market Mad House your home for all things Basic Income.