Trifecta : UBI + Emissions Excise + Abolish FICA
US Fed Gov can become both smaller and dramatically more effective using this focused policy combination to ensure economic and ecological security for all, while also leaving fiscal room for our states to tax + spend (or not) as they see fit:
1) Universal Basic Income at modest level, replacing most federal benefits spending
Benefit must be truly universal
2) Emissions Excise fees replacing most federal revenue collection
Trade adjustments are essential to ensure fair, sustainable international trade
3) Eliminate FICA payroll tax
SS + Medicare benefits unchanged
4) Simplify federal income tax, and treat all income sources equally
Total revenue collected left unchanged, approximately
Next two points are not really changes to policy. These are clarifying shifts in tone, harmonizing with the points above:
5) Leave targeted benefits spending to states + localities, using their hard revenue from LVT, VAT, local income tax. These local choices should be responsive to local voters' views.
6) US Federal Reserve continues regulation of commercial money supply, to offset any harmful inflation from loosening effects of #1 and #3.
What will happen when we apply this these reforms?
Economically, we know that this reform combination will more than pay for itself in productivity and standard of living.
Ecologically, we know that carbon emissions will be curtailed by strong incentives in both energy use and consumer choice towards greener alternatives within a steady regulatory environment. These conditions strongly encourage innovation by individuals and businesses, without casting an unnecessary shadow of central government control and planning. [fun illustrations go here]
Politically, we can win over many Americans of all persuasions by sticking to this short list of integrated goals. Overall our strategy has the federal government making fewer policy decisions, but providing strong support at the base of the economy through both UBI and tax relief.
This policy invention will work in practice, and survive the inevitable cynical attacks.
Such combinations are precious as the years streak by.
Justification of Policy Combination
- Utilizing power of consumer choice and marketplace
- Recognizing philosophy and impulses that drive economic libertarianism
- Stabilizing poltico-economic system using updated thinking about federalism in the information age
Problem with #3: If FedGov is not taxing payroll, it may have difficulty regulating or even monitoring what is happening in economy. (Some would see that as a good thing). This is not an economic problem, per se, it is a governance problem. FedGov has important role in preventing exploitation. Would FUTA continue? Is income-tax witholding a sufficient basis for such monitoring and reg? Will low-wage workers disappear from Fed radar?