So I have been toying with this idea. Talk of the minimum wage and how much people should make have come up in other threads so I thought I'd throw this out there and see what people think.
So BIG is a program where everyone in the country gets paid a certain amount by the government every year. Currently we do something similar in the way everyone qualifies for a certain amount of write offs. But that's after the fact and isn't really stimulative. This way it's cash in hand paid monthly. I set the amount at 15,600 a year. I used that because it is in between the automatic write off and Mitts loophole cap of 17k. This income is untaxed no matter how much or how little you make. But there are no other loopholes. You are taxed on every dollar above this and all income is treated equally except in certain cases. Well really 2 cases. I would keep SS income tax free as well. And I would keep inheritances of 1 million per individual or 2 million a couple untaxed. Above that taxed as income but given 5 years to make total payment with no penalties accruing unless you exceed that time span.
Now what I think this would do is help alleviate some measure of poverty. Reduce expenditures on things like food stamps. Broaden the tax base. Drive demand which would help the economy get back on track which would help us with our debt issue. Also given the closing of all loopholes and broadened base we could drop the rates across the board and still have plenty of revenue from personal income.
So too commie or what?
I will NOT turn this into a political discussion...but here's my comments FWIW.1st, I think that in theory, something like this is good. You're basically reallocating "credits" into real money that people can use for their daily life. Good idea. I think, however, that in practice, this will fail. I think that a big part of the issue is the entitlement and lazy attitude of so many Americans. I also think that while it's not a uniquely "American" problem, it is more prevalent here than anywhere else. I think that if you give this money out, the people who REALLY need it (the food stamp folks referenced), it will help them in the short term, but in the long term they'll be right back where they were.
As evidence, I present the article about the homeless man who was given $100,000. I think the root of the problem for many people living in poverty is not money, but rather what they do with it. I'd much prefer to see 100% free tuition at many community colleges. Free education at a level not already given here. Free job/career planning for those out of work and on hard times. Free business clothing to help those who cannot afford to look nice for a job interview, etc. The sad thing is that I think if you provided all of that, there would still be thousands of lazy people who would not take any of it, and would be content to just sit around and complain about how poor they are.
I think this would drive demand in the short term...but the money would flow up the chain and ultimately end up with the 1%'ers...because the people at the bottom might have more money, but they STILL don't know what to do with it besides spend it on the first thing they see.
It's the attitude of those in poverty that needs to be changed, not the cash flow. Any time someone is more willing to collect an unemployment check then work at McDonalds, there's a problem. Stop the free hand-outs. There's plenty of jobs that need to be done. There's trash to be picked up by the roadside. There's something for everyone on unemployment to do to benefit society.
I know there are the exceptions...I know that a lot of these people depend on this money in hard times...but I think the majority of them depend on it because they are lazy and not educated on HOW to get out from under that support.