A 2% Financial Wealth Tax Would Provide A $12,000 Annual Stipend To Every American Household

Careful analysis reveals a number of excellent arguments for the implementation of a Universal Basic Income.

By Paul Buchheit

Source: Nation of Change

It’s not hard to envision the benefits in work opportunities, stress reduction, child care, entrepreneurial activity, and artistic pursuits for American households with an extra $1,000 per month. It’s also very easy to justify a financial wealth tax, given that the dramatic stock market surge in recent years is largely due to an unprecedented degree of technological and financial productivity that derives from the work efforts and taxes of ALL Americans. A 2% annual tax on financial wealth is a small price to pay for the great fortunes bestowed on the most fortunate Americans.

The REASONS? Careful analysis reveals a number of excellent arguments for the implementation of a Universal Basic Income (UBI).

(1) Our Jobs are Disappearing

A 2013 Oxford study determined that nearly HALF of American jobs are at risk of being replaced by computers, AI, and robots. Society simply can’t keep up with technology. As for the skeptics who cite the Industrial Revolution and its job-enhancing aftermath (which actually took 60 years to develop), the McKinsey Global Institute says that society is being transformed at a pace “ten times faster and at 300 times the scale” of the radical changes of two hundred years ago.

(2) Half of America is Stressed Out or Sick

Half of Americans are in or near poverty, unable to meet emergency expenses, living from paycheck to paycheck, and getting physically and emotionally ill because of it. Numerous UBI experiments have led to increased well-being for their participants. A guaranteed income reduces the debilitating effects of inequality. As one recipient put it, “It takes me out of depression…I feel more sociable.”

(3) Children Need Our Help

This could be the best reason for monthly household stipends. Parents, especially mothers, are unable to work outside the home because of the all-important need to care for their children. Because we currently lack a UBI, more and more children are facing hunger and health problems and educational disadvantages.

(4) We Need More Entrepreneurs

A sudden influx of $12,000 per year for 126 million households will greatly stimulate the economy, potentially allowing millions of Americans to TAKE RISKS that could lead to new forms of innovation and productivity.

Perhaps most significantly, a guaranteed income could relieve some of the pressure on our newest generation of young adults, who are deep in debt, underemployed, increasingly unable to live on their own, and ill-positioned to take the entrepreneurial chances that are needed to spur innovative business growth. No other group of Americans could make more productive use of an immediate boost in income.

(5) We Need the Arts & Sciences

A recent Gallup poll found that nearly 70% of workers don’t feel ‘engaged’ (enthusiastic and committed) in their jobs. The work chosen by UBI recipients could unleash artistic talents and creative impulses that have been suppressed by personal financial concerns, leading, very possibly, to a repeat of the 1930s, when the Works Progress Administration hired thousands of artists and actors and musicians to help sustain the cultural needs of the nation.

Arguments against

The usual uninformed and condescending opposing argument is that UBI recipients will waste the money, spending it on alcohol and drugs and other ‘temptation’ goods. Not true. Studies from the World Bank and the Brooks World Poverty Institute found that money going to poor families is used primarily for essential needs, and that the recipients experience greater physical and mental well-being as a result of their increased incomes. Other arguments against the workability of the UBI are countered by the many successful experiments conducted in the present and recent past: FinlandCanada, Netherlands, Kenya, IndiaGreat Britain, Uganda, Namibia, and in the U.S. in Alaska and California.

How to pay for it

Largely because of the stock market, U.S. financial wealth has surged to $77 trillion, with the richest 10% owning over three-quarters of it. Just a 2 percent tax on total financial wealth would generate enough revenue to provide a $12,000 annual stipend to every American household (including those of the richest families).

It’s easy to justify a wealth tax. Over half of all basic research is paid for by our tax dollars. All the technology in our phones and computers started with government research and funding. Pharmaceutical companies wouldn’t exist without decades of support from the National Institutes of Health. Yet the tech and pharmaceutical companies claim patents on the products paid for and developed by the American people.

The collection of a wealth tax would not be simple, since only about half of U.S. financial wealth is held directly in equities and liquid assets (Table 5-2). But it’s doable. As Thomas Piketty notes, “A progressive tax on net wealth is better than a progressive tax on consumption because first, net wealth is better defined for very wealthy individuals..”

And certainly a financial industry that knows how to package worthless loans into A-rated mortgage-backed securities should be able to figure out how to tax the investment companies that manage the rest of our ever-increasing national wealth.

 

Advertisements
This entry was posted in Corporate Welfare, culture, Economics, elites, Financial Crisis, Inequality, Labor, Recession, society, Sociology, Technology, Work and tagged , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

7 Responses to A 2% Financial Wealth Tax Would Provide A $12,000 Annual Stipend To Every American Household

  1. amaezed says:

    Firstly. Think outside the box. Secondly. Stop labeling everything. Thirdly. Stop intellectualising. What has the intelligentsia contributed to humanity….oh yes….the wheel. Sorry! What has history taught us. Rinse n repeal. China is communism and the strongest economic growth. Russia is social and strongest growth despite sanctions. These ism’s don’t work b/c the elite don’t want them to. Forget ethics/morals. Think BIGbiz. Period. Think good guys bad guys. Think GIVE US OUR MONEY BACK…I’m healthy when I got money. I’m not when I’m not.

  2. amaezed says:

    Great idea. About time some common sense was applied to the inequality of wealth distribution. Tax the wealthy and give us our money back. It’s just money. This could save the lives of billions of people around the world. And btw it would be back in the system anyway. https://amaezed.wordpress.com

    • Wealth isn’t distributed it’s created. It is then redistributed through taxation and social programs. It is also very unlikely that unbridled socialism will save billions of lives when it has already cost over a hundred million.

      • Is unbridled socialism any worse than unbridled capitalism? It’s impossible to quantify the number of lives lost or harmed by groups and individuals benefiting from extreme wealth concentration. Money will always have to be redistributed to help a percentage of the population who cannot work. Would it not be better to distribute money directly to people rather than through costly and often inefficient social programs?

        • Nolan says:

          Yes, unbridled socialism is much worse than unbridled capitalism. The best examples off the the top of my head of “unbridled” socialism vs capitalism would be Mao’s China vs 19th/early 20th century America. Look at how much better the Chinese are doing economically with the post Mao market reforms(capitalism). Look at how our lives as Americans are degrading as we gradually slide into socialism since the Vietnam War era. Secondly UBI will not solve anything, it will only drive up prices of rent and daily necessities. In fact, UBI will lower our standard of living. The rich generally invest their wealth in businesses, thus creating jobs and usable products(higher standard of living). If you take that money from them and give to average people, they will spend it on rent and daily necessities. this will result in lower supply and higher demand, pushing prices up for everybody, hence why socialism always fails

        • As for our inefficient social programs, its inefficient because of abuse by single mothers and by people who gorge themselves on unhealthy food and don’t exercise, thus becoming morbidly obese causing a myriad of health problems, thereby becoming legally “disabled”. People who have unfortunate accidents and the mentally and physically disabled absolutely, definitely deserve help. Hardworking Americans should not have to pay for bad decisions of others.

  3. BUI. Bad Unscrupulous Idea. Its a sellout into adopting socialism as a whole. NWO. A better idea might be the Robin Hood tax that would fund individual grants and micro loans that would fuel the more productive people and add to growth. Others would have to rely on traditional social services.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.