Tax Reform and Guaranteed Minimum Income
Wednesday, 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?
