With a UBI, everybody gets the same amount of money from the government, regardless of their needs or contributions. How does that sit with a mindset we have had for decades called user pays?

The brief Wikipedia article on user pays mentions the most common example, which is petrol/gasoline tax. Ultimately it is a cop-out by governments, just like out-sourcing and privatization. If you want better roads, we will need to put up the price of gas.

That is the kind of simplistic logic that satisfies (fools) the common man. But it is very wrong. Roads and road travel are ubiquitous. While most of us drive, all of us depend on roads. Almost every person and business benefits from roads to some degree, directly and indirectly. Their usefulness is so universal that taxing fuel due to a “user pays” concept is simply wrong.

Aside from trucks – as they primarily are what causes damage. A tax on their activities is warranted.

The cost of infrastructure should be borne by all of society, and all of society should have equal access. That way of thinking is an extension of UBI, and also a part of a parallel concept known as Universal Basic Services.

With the rise of electric vehicles, governments are scrambling to keep their fuel taxes happening so that roads can be funded. In Victoria Australia, there is already a kilometre tax for electric vehicles, which is the antithesis of encouraging such vehicles. Now Texas is charging EV owners an annual fee.

I look forward to a country adopting a “roads for all” policy and getting rid of the blame-shifting, responsibility-shirking road taxes once and for all.

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In my book The Rich Cheat, I lament all the ways the rich get richer, while noting how little is done about it. Because inequality is on the rise, clearly existing measures are inadequate. Even so, there are existing measures, and it would be fair to point them out.

The net investment income tax, or NIIT for short, was introduced during the Obama years to pay for health care. It’s a 3.8% surtax on the income of Americans from sources like interest, dividends and capital gains. But it focuses on the rich and only applies if adjusted gross income, or AGI, is above $200,000 for most single people or $250,000 for married couples.

Importantly, it has not yet been adjusted for inflation, meaning more and more people are now earning above the threshold. And because interest rates are on the rise, so is the income from the tax, rising from $16 billion in 2013 to over $60 billion in 2021.

The WSJ makes a great example of how it can be seen to a “small” tax:

“Maybe $114 is a small price to pay when your interest on a “safe” investment of $100,000 rises from $1,000 to $4,000, but it’s there. I joke to clients that the NIIT is the ‘you-make-a-lot-of-money tax,’ ” she says. 

And therein lies the point. Inequality will only decrease when taxes on the rich hurt. When your wealth grows by 10%, the takes reduces that down to 9.6%. That’s still your wealth growing without lifting a finger.

The post A Great Example of Wealth Tax (USA) appeared first on Unism.

Negative Gearing: If your rental property runs at a loss, that loss can be used as a tax deduction against other income. Effectively that means that the government & other taxpayers subsidise your loss-making.

While running at a loss sometimes will offset profits sometimes is valid for business taxation, that is when it is within the same business. With negative gearing, people purposefully operate at a loss to reduce tax on other incomes, like employment.

Capital Gains Tax Concessions: When you sell your own home, or the property you have “nominated” to be your home (no need to actually live in it…), your capital gains tax is halved. That explains in part why rich people sometimes own extraordinarily expensive homes – they get the regular rise in property values but only pay half the tax.

The government will tell you that these benefit mom and dad “investors”, who have the Australian dream of an investment property, and that it inspires more investment in the housing industry. What it actually does is help the rich pay lower tax rates than the poor.

The Age reports:

• 57 per cent of negative gearing deductions go to the top 20 per cent of income earners
• the top 10 per cent of earners claim more in capital gains tax deductions than the remaining 90 per cent combined

Negative gearing, is clearly being taken advantage of by the rich:

Under the Greens’ current policy of allowing just one investment property to be negatively geared, the Australian government could make a $63 billion saving over a decade

The post Negative Gearing: Tax Cut for the Rich appeared first on Unism.

It might be a lot or a little. It might be a federal or a local tax. Sometimes it only applies to larger businesses. But its existence it is pretty standard.

Ostensively it is a way of businesses to contribute to social security, to help their workers. In reality it just means they pay workers less. The only genuine benefit it could have is giving an advantage to smaller, local businesses who might not need to pay it.

In recent times Robot Tax has become a popular meme, to stop or reduce robots from stealing jobs. It is sometimes mentioned that robots have appeal because they do not incur payroll tax. No, robots have appeal because they can be cheaper overall. Payroll tax is a negligible factor.

So, they say, lets tax robots! None say exactly how they would do this. They are perhaps imaging a humanoid robot who sits at a desk and replicates a clerk’s job. No, robots come in all different shapes and sizes. How much would you tax a Roomba? Or a dishwasher? Or a drone?

Taxes are used to make undesirable things less appealing, less profitable. We often forget that the alternative is to subsidise the things we prefer.

So let’s turn things upside down and reward businesses for employing people, instead of taxing them for it.

Let’s pay businesses a UBI based on full-time employees, regardless of how much they are paid.

Why not a tax break, based on employees? Well, that would work fine in the current system. But in a future system with different types of money, we can pay the Business UBI with money that can only be spent on certain things, like employee health, renewable energy, public transport passes, safety audits… it is only limited by imagination.

Studies show that, in general, reward achieves more than punishment. Imagine the difference in the mood of your boss if she is receiving a check instead of having to write one.

The post Robot Tax vs Payroll Tax appeared first on Unism.

Pretty much anything with a value has, was or will be taxed. All that is left, is things without value. By desiring to tax them, if that comes to pass, we need to allocate them a value.

The boldest example is perhaps unpaid childcare. That has value to society and is worthy of a tax credit. But to do so, it needs to be given a value…. Suddenly the unmeasured by GDP niches get to shine.

But I want tax revenue. What do rich people have that hasn’t been allocated a value? Working out that is something that can be done, but is damn hard. Some ideas to get you started:

Valet Parking / First Class Flights -sound good on the surface, but the market has already decided what these things are worth, even if they are unpaid (directly), and even if the won value (separated from the poor) is different to the nominal value (some nice food and wine). The rich won’t pay more, which means the providers receive less. To balance that, they will raise the prices for their less wealthy clients.

So, it can’t be transactional, unless that business purely services the rich.

What do the rich value, but has no transactional value?

Peace and Quiet. I guarantee there is a direct connection between wealth and density of people, regardless of being at home or not. I feel it is clear that we mix with the rest of society, densely, because it is needs based. Rich people choose to be separate.

We can tax that. Assign peace and quiet a value, an allocated value, and charge it according to distance from others relative to population density. We are all going to be tracked one day, so that is perhaps a good use for the tracking.

Just like I get health insurance because it saves me paying an extra Medicare levy, rich people could be persuaded to mix with everyone else a bit more, I’m sure it can’t harm.

The post Allocated Value Tax appeared first on Unism.

Because capitalism won’t cope with a population that gets smaller and smaller, in some countries politicians will do their best to promote having more children:

• baby bonus
• long maternity leave
• free childcare and pre-school education
• tax breaks

This already occurs in a few lands and typically isn’t enough to get the fertility rate above 2.1. It also means that the increase in children will come from poor people – those who relatively benefit the most from the bribes.

Imagine a politician who is disgusted by poor people breeding more than the elite. He/she/they might decide to turn the incentive idea upside down.

Instead of incentivising more births, they could tax those who refrain. Childless couples benefit enormously financially, relative to those who propagate the species. Anyone who has mature gay couple friends (I’m generalising) can attest to their disposable income.

If the tax is progressive, and doesn’t kick in for those below the median income, then it doesn’t encourage poor people to have children, but it strongly encourages the rich to do so.

It could also be seen as a way of punishing male same sex couples.

Just to repeat, I am not advocating this, I’m just turning things upside down as I am with everything else, and considering what may result.

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