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In general, a reasonable axiom of public policy is to focus on correcting negative externalities and unjust outcomes while minimizing interference in well-funct
by wallace_f 9y ago
In general, a reasonable axiom of public policy is to focus on correcting negative externalities and unjust outcomes while minimizing interference in well-functioning free markets. Your idea is nice, but we already have mortgage tax credits and have seen the negative effect that has had on the economy.
What's more, is who gets to decide what is a necessity. Once upon a time I flew to Australia, bought a commercial van, a surf board, and converted it into a camper and travelled a loop around the country. I was by definition poor and homeless, but I was in heaven. I don't think this would qualify for any tax breaks under your plan. In this way your plan creates a complex tax code that does not align with me maximizing my utility function.
There are vast benefits to simplifying the tax code, and I would argue a better version of your idea is to guarantee a basic income to everyone.
BI won't work for everyone, such as the truly disabled, but it's a more efficient way of reducing inequality for the truly poor, and more capable of maximizing individual utility functions.
I know you will say "but who will produce useful goods and services," but at the moment I would wager far less than 30% of the population produces useful commerce. The labor participation rate is only about 60%, and many jobs don't produce anything useful. For example, police officers in Utah that settle for 0.5MM for unconstitutional injustices are draining taxpayer funds. Wall St is completely out-of-control. Bureaucracy, military-congressional-contractor-complex, healthcare insurance companies... There is an extroardinary amount of waste.
BI would also benefit the economy by increasing aggregate demand. It would stimulate investment by providing a safety net for indivisuals deciding to retrain or invest in education.
- alacombe 9y agoIt could be argued that the whole concept of "basic income" is very much a "rent-seeking" behavior, as receivers are not technically producing anything of their own while relying on someone's else "surplus".
- wallace_f 9y agoAnd nearly every living person on earth has been profiting from rent-seeking from the second they are born into a world with food, medicine, water, maths and science, etc that has been created and improved-upon by people long-dead now.
- Aron 9y agoIf all people benefit from something then it's hard to find a problem with it. That's presumably not the case for someone who is a high level producer comparing a UBI world to a non-UBI world and seeing only an outflow.
- Aron 9y agoI'm curious how that's wrong.
- WalterBright 9y ago> BI would also benefit the economy by increasing aggregate demand. That would require that taking something from A and giving it to B would increase aggregate demand. I don't see how that can be. > It would stimulate investment by providing a safety net for indivisuals deciding to retrain or invest in education. This safety net may encourage people to drive around Australia in a van who would otherwise work, reducing investment.
- dragonwriter 9y ago> That would require that taking something from A and giving it to B would increase aggregate demand. I don't see how that can be. Differing marginal behavior between A and B.
- WalterBright 9y agoPlease explain what marginal things A spends/invests money in that does not produce aggregate demand.
- wallace_f 9y agoRent-seeking behaviors. Speculative investing.
- WalterBright 9y agoWhat do you define as "speculative investing" versus "investing"? And why would the former mean less demand?
- dragonwriter 9y agoIn terms of aggregate demand in the domestic economy, anything that either is not purchased from the domestic economy or which produces a lower velocity in the domestic economy has less induced aggregate demand. To simplify and focus on simple consumption, spending that occurs on locally-produced goods during foreign travel has does nearly nothing to increase domestic aggregate demand in the travellers home country.
- indubitable 9y agoRather than taxing individuals like companies, which would create an even more intangible tax code, I was suggesting a more precise way of determining "fair" tax brackets -- similar to the article. Right now tax brackets seem to be determined more or less arbitrarily with a healthy dose of single sided lobbying. If we set the goal of defining tax brackets such that they affect any given person in any given bracket in a comparable way, it gives them meaning and inherent fairness. The measurement of real disposable income could be determined by aggregating costs across representative demographics. It's similar to the minimum wage. Right now so many things in our law are just magic numbers. Giving them actual meaning would likely not only make the law more fair, but also make it more transparent and difficult for special interests to lobby against. I imagine we're headed inevitably towards a basic income thanks to automation. I just don't see any other way around it from either the consumer or the producer side. Companies need to earn money. Companies earn money from people who generally work to earn money in a very circular system. Take mass employment out of the picture and the whole system starts to break down. But I think that's beyond the scope of this post.