Tom Walker wrote:
The technical problem is to design a
tax system that generates revenues for the GAI without establishing marginal
tax rates that make it unrewarding to work.
I will quote some more from "And Economic Justice for All" because Andre's
calculator has identified an incongruency. I have used Tom Walkers quote as
a very valid critique and one which the author of this book covers.
Quote:
HOW IS THE PAYMENT OF THE GRANT TRIGGERED?
Everyone will have the option of filing a declaration of estimated income.
If that declaration shows, for example, an expectation of zero income,
checks will begin arriving as soon as the form is processed.
The estimate must include a declaration of the individual's wealth. This
includes the equity in a home, stocks and bonds, cash, automobiles, home
furnishings, boats, and all other items of value. The burden of filing this
information will be eased in two ways. First, persons who are quite certain
their income (including imputed income from their assets) will make them
ineligible for the GAI do not need to provide this information. Second,
people can choose to use a "standard" asset assumption. This amount will be
set quite high; those who claim fewer assets will of course be subject to
verification.
Those economic strategists among you are probably already thinking "Why
wouldn't everyone deliberately underestimate his or her expected income in
order to receive the grant? I'm ahead of you on that one. Just as we now
have penalties for underestimating income for those self-employed persons
who understate their income and thus reduce their quarterly tax payments, so
will there be penalties for underestimating income for puposes of GAI
calculations. That penalty can be the same as is now imposed on
underwithholding. Unfortunately, this penalty must also apply to those who
inadvertently understate income; however, this is unavoidable since we
cannot determine which instances are inadvertent.
End of Quote
A little background. First the author sees this program being administered
through US Tax system. Second, the author is working on the assumption that
the GAI is not a basic grant for everyone - rich or poor, but is the Basic
Income entitled too by everyone and those who have no income or who are
below the Basic Income receive cheques thorough the Revenue Dept that gives
them the difference between what they earn and what the Basic Income is. To
maintain an honesty in the system, the author proposes that it is only right
and fair that those receiving such help indicate their "wealth", so that we
do not get recipients who have large assets (wealth) but no income.
So to address Tom's critique that the problem is to find a system that does
not make the tax burden unbearable, the author's view of a Basic Income is
one which only supports those whose income is below the agreed upon amount.
This, he claims can be done with a "flat tax rate of 35%" with a possible
VAT supplement.
To answer Andres multiplication of population by Basic Income Grant is
answered by the explanation that everyone is entitled to the Basic Income,
given that they have no income or income below the basic income amount.
This in essence puts an economic floor on poverty. Something which we do
not have now.
Respectfully,
Thomas Lunde
