Tax Reform and Guaranteed Minimum Income
November 28th, 2007Another sensible policy proposal out of Wellington. I blame the weather myself. The sunshine must be sending rays of optimism and clarity of thought into the capitals’ thinking tanks.
First it was Arthur Grimes from Motu and now Adolf Stroombergen from Infometrics. Adolf raises the idea of a flat tax and a guaranteed minimum income (GMI). The concept of a GMI has been around for a long time but it’s good to see it mentioned alongside tax reform.
Last year Charles Murray, co-author of the Bell Curve, came out with a similar proposal based on a basic income and dismantling of the welfare state. There has been plenty of commentary around “In Our Hands” but it is a sign that policy analysts are starting to realise that our current fiscal arrangements are sorely in need of attention.
Coupled with the fact that monetarism is dead in the water it leads me to believe that we are on the cusp of a major evolution in our economic structures. Also it should be noted that none of these proposals are original in thought although perhaps in detail.
Students of financial history will know that many good ideas have fallen by the wayside or been ignored but eventually they will come to the fore. We have a land tax proposed, GST reform, income tax lowered or abolished and a universal income. Well hey now things are starting to come together.
What we need now is serious analysis into these types of proposals. Anyone interested?
Tags: money, taxation, universal income, welfare
November 29th, 2007 at 4:40 am
May be the solution is a basic income combined with a Flat tax on income with two thresholds, 0% until twice the basic income and from there on 30% or whatever is necessary or wanted. If the basic income is part of the taxable income the whole is working like Negative Income Tax. Of course there is no need to limit the flat tax to two thresholds when the definition is maintained .
A system like that is proposed by vivant http://www.vivant.org
a challenging question for many Basic Income proponents is, of course, how to finance the Basic Income.
May be the new book (free download) of Peter Barnes
http://onthecommons.org/files/Capitalism_3.0_Peter_Barnes.pdf
may give some ideas.
Also Wikipedia gives a short list. http://en.wikipedia.org/wiki/Basic_income
a monetary reform for europe is published on
http://www.socialcurrency.be with a link to the US proposal of the American Monetary Institute.
Paul
November 29th, 2007 at 6:54 am
Thank you Paul. There is great synergy there in all those sites.
I have read and blogged about Capitalism 3.0 here before. I see Vivant has an interview with Charles Murray also. And John Tomlinson’s paper “Honest Money” is in the research section. And the AMI is on here too
Great to hear from you. We are all working towards a similar goal which Les Hunter calls a “Post Usurious Society”.
In terms of financing a basic income I’d like to throw a simple idea out there and that is for the “government” or “monetary authority” to simply issue the income directly into peoples’ bank accounts. This would be part of their operating goal of managing the money supply directly (as opposed to using monetary policy). This idea flows into social credit proposals (see http://www.democrats.org.nz) and other ideas where the government create interest and debt free money.
For me it is time for Keynes and Friedman to both stand aside…..the welfare state and monetarism have had their time. It is time to free people from the burden of interest bearing debt and taxation of their work.
Thanks again and let’s keep the ideas flowing.
November 29th, 2007 at 3:13 pm
In case you are interested in “direct democracy”, we just published a book
http://www.democracy-international.org/book-direct-democracy.html
download for free.
Also a very good book about democracy, but not free to download, is on
http://www.iri-europe.org/
Guidebook to direct Democracy
http://shop.iri-europe.eu/catalog/product_info.php?cPath=1&products_id=29
The idea you are mentioning about creating the money into the peoples accounts is defended by Christine Boutin in France, in 2002.
The concept is still in study and an official report is expected end of March 2008.
http://www.frs-ladroitehumaine.fr/frontoffice/dividende-universel-une-etude-demandee-par-le-premier-ministre.r15017_p68_l1_a259_se0_ar0.htm
Paul
November 30th, 2007 at 4:49 am
Thanks Paul. Those links looks very useful. The more we collaborate and communicate the more likely we can effect change on a global level as well as learn from each other and refine particular proposals.
I contacted Christine asking for any update information on her report.
November 30th, 2007 at 6:35 am
Hello sustendo,
an other proposal in the direction of money creation in favor of the people is the proposal of prof Huber and James Robertson (James Robertson is also known from his involvment with NEF)
You can find his proposal on
http://www.etes.ucl.ac.be/bien/Files/Papers/2000Huber.pdf
Paper prepared for the Basic Income European Network 8th Congress
Berlin, 6–7 October 2000 http://www.basicincome.org
quote”
1. Purpose and meaning of the proposal
This contribution deals with the question of how to finance basic income. The proposal put forward here aims at using the annual addition to the stock of money, i.e. funding basic income by the creation of new money instead of levying taxes, or to put it in a slightly different way, replacing a certain amount of taxes by newly created money. ” unquote
The monetary proposal is worked out on my website http://www.socialcurrency.be
Kind regards
Paul