And how do we pay for it? With ease! We tax the filthy rich a lot of money
Hubboy. Here we go again.
The problem is that there’s not enough filthy rich. A tax increase of 4.5% on the top earners yielded (last time it was tried, which was just four years ago) about 60B in additional revenue to Treasury. That’s the size, roughly, of the repair bill for Superstorm Sandy; and if doled out to the working age citizen, it tosses out……well, damn near 300 bucks a year.
Double it. Triple it. Quadruple it. Go five times if you want, which is well past the point that even a left-leaning economist will tell you will destroy so much investment that it’s counterproductive. $1500 a year isn’t going to pay for much.
“close up loopholes that get them out of it”
The problem is that there aren’t any loopholes that get them out of it. Outside of carried interest, which has a definite negative consequence to investment if changed, the loopholes all went away with the first Reagan tax package. Oh, there’s a few things here and a few things there that could be cleaned up, but the bottom line is that the rich aren’t rich enough to pay for this. At least not with something as mundane as an income tax increase.
force corporations to pay more in taxes
Well, that doesn’t work either. Global economy and all that. You put the US corporations at a pricing disadvantage to their Chinese competitors, and the citizens all buy Chinese. US corporations go out of business. It’s kind of like taxing smokers; the more you tax them, the more that quit, and the less tax you take in.
and a SHITLOAD more in taxes if they take their business to a foreign country
Can’t do that either. Damn US Constitution. Plus, there’s about a million ways under current law to pay taxes someplace else. Or move production someplace else. You’ll end up with the HQ of our Fortune 10 companies being one floor in a small office building someplace. 10 executives live in the US, 490,000 employees overseas. But, their “WorldWide HQ” is still in the US. Sort of.
If you want to yield more revenue for these sorts of things….well, take a look at who doesn’t pay the taxes around here. Did you know that our marginal tax rate on the “filthy rich” is higher than Canada’s? And when you add in state income taxes and property taxes (Europe and Canada, as a general rule, don’t have very high property taxes, if they have them at all) the US taxes on the rich are right about up there with the lower margin of Europe. Already.
The reason that we don’t have the money for European style services in the US is not because the rich don’t pay enough. They do. The reason we don’t have the $$$ is that the LOW END doesn’t pay enough. (Waits for the shock to die down.)
Here goes. The effective tax rate for our middle earnings quintile is about 11%. That’s less than HALF of what a Canadian middle earner pays. And, no country on earth besides the US has a negative tax rate for their lowest two quintiles. For example, 90% of people in Denmark pay SOMETHING; only their 10% poorest pay zero. But if you’re in that 10th percentile in the US, your effective tax rate is a negative 10%.
That’s right, you get back money you didn’t earn. :-)
I am not, btw, negating the problem. Automation is going to replace way too many of us, unless we turn into semi-Luddites, (which may not be a bad idea. Just because something CAN be automated doesn’t mean it’s good for society to let it happen) there will indeed be social unrest if the only people who can earn more than minimum are the 20% of us who have the interest and the chops to get a STEM degree.
But paying for the solutions will require a much different structure than you suggest. And perhaps not letting this “Basic Income” idea put our thinking in a box. We can do better, I think.