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Here's an idea a friend and I have been throwing around. It's probably terrible to be honest, so I'd love to hear why it's dumb. Implement basic income, which

Here's an idea a friend and I have been throwing around. It's probably terrible to be honest, so I'd love to hear why it's dumb. Implement basic income, which HN is well aware of. But, instead of funding it entirely through income taxes, fund it primarily with what the Fed would call "Quantitative Easing" but what I will call "printing money." Right now, I believe the Fed has actually made inequality much worse by printing a metric ton of money and pumping it into government and the financial sector. The hope is that this will, to use a loaded term, "trickle down" to everyday Americans. Instead, it seems there isn't much trickling. So, why print money? Because it's a wealth tax. It's also the easiest tax to implement: you don't have to collect anything! No IRS. A huge amount of the US government would be gone: no more means testing government expenditures (benefits), no more tax collecting for revenue.

dllthomas 13y ago
Printing money isn't a tax on wealth, it's a tax on dollar denominated wealth. If I have a $5 million dollar home and a $20 million dollar stock portfolio, and the dollar falls 2% tonight, tomorrow I probably have a (roughly) $5.1 million dollar home and $20.4 million dollar stock portfolio. That said, I'm not convinced it's a terrible idea. What it would likely do is get businesses to stop sitting on cash reserves... if they do that by increasing production, that might lead good places. If they do it by fleeing into other assets, we'll just see the dollar crater. Increased demand expressed by those whose increase from the money they've been handed is less than their loss from inflation might mean that increasing production is the better move for them. I'm not sure I'd want to bet on it, though. Printing a portion of what is handed out (particularly in down times) seems less crazy.
maxerickson 13y ago
QE carries the implicit promise that they will eventually stop it and destroy some of the money. This keeps a lid on inflation. Start printing money without that implicit promise and away we go with the inflation.

dllthomas 13y ago

Printing money isn't a tax on wealth, it's a tax on dollar denominated wealth. If I have a $5 million dollar home and a $20 million dollar stock portfolio, and the dollar falls 2% tonight, tomorrow I probably have a (roughly) $5.1 million dollar home and $20.4 million dollar stock portfolio. That said, I'm not convinced it's a terrible idea. What it would likely do is get businesses to stop sitting on cash reserves... if they do that by increasing production, that might lead good places. If they do it by fleeing into other assets, we'll just see the dollar crater. Increased demand expressed by those whose increase from the money they've been handed is less than their loss from inflation might mean that increasing production is the better move for them. I'm not sure I'd want to bet on it, though. Printing a portion of what is handed out (particularly in down times) seems less crazy.

maxerickson 13y ago

QE carries the implicit promise that they will eventually stop it and destroy some of the money. This keeps a lid on inflation. Start printing money without that implicit promise and away we go with the inflation.