One of the enjoyable things going on right now in politics is an actual debate about taxes. You have Michael Bloomberg and Howard Schultz saying wealth taxes are bad for the economy. You have AOC saying we should tax “the $10,000,000th dollar at 70%,” or something. And you have Elizabeth Warren calling for a wealth tax, on savings, of the top 0.01%. This is a healthy, robust debate, one we need. We’re running $1 trillion debts, our nation is crumbling of neglect at home, and our tax code is a total mess, thanks to everyone from Ronald Reagan to Paul Ryan.
I think we’re having the wrong debate though. I’m not saying we shouldn’t debate millionaires and billionaires, and their tax bills, but I think that debate should take a backseat to how we tax our poor and middle class. The discussion we need to be having is how to create more tax free money at the bottom of the income bracket, essentially “shifting” the loopholes to the working class people.
Nobody should pay taxes on their first $30,000 of income. Literally nobody. Make all of that money tax free, because that’s literally what you need to survive. The first $30,000 pays for your food, your housing, your clothing, and your health care (in fact, I’m probably underestimating it). This money shouldn’t be taxable. If I’m really being honest, people making below $30,000 should be guaranteed a tax return that gets them to $30,000, essentially creating universal guaranteed income (UGI) for all Americans. I’d up this number to something like $45,000 for couples and $60,000 for families of four. For those that call this crazy and fiscally irresponsible, I remind you that we would save much more when we don’t need as much money in welfare programs.
I would apply this principle on taxes besides income too. The payroll tax would start at $30,000, and would certainly not be capped at $132,900 (as it is now), if capped at all. Corporations and businesses would be incentivized in the tax code to be good corporate citizens, including paying a living wage, allowing unionization, giving paid vacation and medical leave, and offering health insurance and retirement to workers. If you start applying the principle of a robust income “floor,” or safety net, you start solving a lot of the failure in our economy. By the same token, companies paying below a living wage and not taking care of their workers should pay more. Essentially if we’re paying the UGI I described above to someone who has a job, their deadbeat employer should be paying taxes that make up the difference.
I’m not sure how I feel, to be honest, about wealth and windfall tax plans. I don’t oppose them. I’m also not sure I love them. What I am more bothered by is the existence of the working poor in America, not as much the super rich. We need to take better care of Americans living in poverty and even middle class conditions, and we should draw up a tax code that makes that happen.