penbeast0 wrote:Just to piss off both sides . . .
(a) Cut the minimum wage to $5.00/hour (or get rid of it altogether) but have the U.S. government match that $5.00 per hour for all U.S. Citizens that work for up to 40 hours per week.
(b) Include a special provision allowing married American citizens to also take that $5.00/hour matching rate for stay-at-home mothers with children under 18
(c) Pay for it by eliminating all programs that have any income eligibility . . . instead put programs in place with no incentives for poverty. If you put government sponsered food kitchens out there and Bill Gates wants to eat at it . . . fine.
(d) Eliminate ALL tax deductions except the personal deduction and make it a flat tax but that flat tax should include paying for social security -- no capping this rate. This eliminates regressive taxation while not creating punitive tax rates that would encourage our most productive citizens to live overseas as used to happen with the high millionaire tax rates in the old days.
(e) Eliminate all government requirements for businesses to provide health insurance for workers but mandate that all parents MUST have a certain minimum level of health insurance for their children under 18 and to fail to do so is a prima facie case of child neglect (prima facie means you can disprove it if you have legitimate reasons not to provide it). On the flip side of this, require all children of seniors (defined for this and social security as is most appropriate) to also carry a certain minimum level of health insurance for their parents. If the parents choose to pay for it, fine -- if not, the family should pay for it as most of our families do without having to artificially impoverish seniors to qualify for federal supports.
I agree with several of these concepts. The idea is to provide a decent "safety net" for low income workers without disincentivizing work.
I don't think some of these plans would work to well in practice, however. For example, your proposal to have government match all minimum wage workers dollar for dollar would only result in employers paying only the minimum wage and nothing more (until the worker was worth more than $10 an hour). The end result would be a huge cost to the taxpayer.
I'd do it like this:
- Everyone pays a 20% flat tax, starting on the first dollar earned.
- Every adult gets a $5000 tax credit just for being an American citizen not in jail.
- All other federal programs are eliminated except for health care which is a different subject
- Minimum wage is $5.00 per hour.
- Business tax rate is 0% (or maybe up to 10%).
A married couple with a family, with nobody working, would still get 10 grand a year from government. That's enough for a roof over their head and the bare minimum of food. (States could supplement this system if their voters decided to do so.)
If Dad gets a minimum wage job for 2000 hours a year, he earns $10,000 and pays $2000 in taxes. Effectively, his $5000 tax credit dropped to $3000. (His wife still gets her $5000 tax credit.) Dad's total government subsidy decreased, but not by enough to be a disincentive to work. After all, $18,000 a year for the family is better than $10,000.
Once an individual earns $25,000, or a couple earns $50,000, their tax payments would equal their tax credit, and their effective tax rate is zero. All marginal income thereafter is taxed at 20%. There are no other deductions.
The numbers might need to be tweaked a bit to balance the books. Maybe a $4000 tax credit is more appropriate, plus another $1000 for each kid. Or maybe the tax rate might need to be 22% or so, with a higher supertax bracket of 28% once income exceeds $150,000.
The idea is to have a relatively low tax environment to attract investment, and for businesses to be able to afford entry level wages that can compete with China and other low cost countries. Effectively, the tax system subsidizes low income workers, rather than subsidizing laziness and unemployment.
