Here in one blog post is the solution to everything*
Here in one blog post is the solution to everything*

The solution to everything must be qualified as being a solution to persistent political issues. Chiefly, this is a proposal that seeks to satisfy varying ideological aims, which includes ending poverty, reducing government, and balancing the budget. You know, easy stuff.

Swirl paw

Meowpolis, Purristan – Monday 8 June 2015

There are myriad of consistent issues almost every nation faces. At varying times, a nation here or a nation there may have done better to dampen or resolve some of these. Today, I will write down, somewhat extemporaneously, my collective thoughts on what humans, and serving as my primary inspiration, the United States, can simultaneously do to resolve a number of thorny issues, without first needing to achieve an ideal state or utopia, nor without any expectation such acts will result in an ideal state or utopia.

One fundamental issue is poverty. Every nation has this issue, and thus far, it has been a constant throughout human history. This can render the goal of thwarting it daunting, if not seem outright impossible. Fortunately, humans have actively sought ways to deal with it and alleviate it, sometimes meeting great success. An issue in itself, perhaps through failures or resistance, is how humans define poverty, or even economic classes and buying power. This has gotten more challenging as the metrics have both become more complex while also often being rather arbitrary.

A digression with economics

Poverty is defined by economists, spoken of by politicians, and written about by journalists, as well as levels of class, and other such things. The ability to paint a revered landscape is a skill, and its result is art. Similarly, the ability to write well, or move an audience with oratory, are skills, and they are art forms. Economics is a social science, and as such, it is both a science and an art. Most colleges and universities award their degrees for economic majors, as well as journalism and speech, in the liberal arts. I am making this point because I do feel humans often defer to economists, thinking it more on the science side, and forgetting it also is an art form.

The economist certainly is a scientist, and their area of emphasis may make them more scientific than artistic. The science of economics is mathematics, models, studies, and similar. An economist might develop a theory, and determine a way to test it. They then conduct research and publish their findings in a peer-reviewed academic journal. If the model is solid, being repeatable by others, it is science!

The art form typically comes in at least two places. The first is deciding which metrics or variables to account for and to exclude from any model, test, case study, et cetera. This artisan sauce makes it all work as science! Economists must strive to make the best decisions about how to approach what they are modeling and studying, and it can be very abstract. Another artistic arena is how they interpret their results. Being interpretive, it can be subject to bias, where one may see things indicative of one thing, while another may see it as something else. Such is the way of data. As Mark Twain famously observed, there are lies, damn lies, and statistics. It is unlikely the case data itself is wrong, but it could be poor choices in what to include in creating the data, or how one has interpreted said data.

When politicians and journalists speak and write about economic data, the human attention span, often matching that of gnats, constrains them. Where the politician speaks in poetry, and the journalist in prose, neither tend to have the opportunity to explain thoroughly the data that produces the conclusions or predictions. There is a word count. There is the context of the speech. There is also the reality that the audience may have a harder time staying tuned if one drones on about it, though the information is valuable and insightful. Speaking of droning on about this stuff…

Household income is everything but I cannot spend my roommate's money!

A common way to inflate the incomes of people is to cite household incomes, while typically failing to mention the metric is household income. This usually happens simply by stating that the median income is X and leaving it there. Household income, rather obviously, combines all income of those living in a household. The problem is that households these days are less the married couple filing joint taxes than it was when the metric became popular. Families today tend to be more complicated than that. Marriage rates in the United States are hovering around fifty percent, and there is some research suggesting it is being supported at fifty percent by the trend of states legalizing same-sex marriages. Of the working age population, the marriage rate is even less, as fewer are getting married young, and a good chunk of those married are already toward the end of their careers or are retired. What the United States has is an enormous population of singles, roommates, or alternative families. Regardless, the household income is a terrible metric, with half the population not having access to the income of another within their household, or have no other, except perhaps a child, in their household. The 2014 median household income in the US was $51,939. To some of you, that sounds about right, maybe even low. To many of you, that likely sounds rather high. All it means is that for households, half the population make more, and half the population make less than that.

Another issue worth noting is average income, which generally skew up. Therefore, please do not use it. If you are reading an article or hearing a speech, you need to know if they are discussing medians or averages. It is also critical to understand what the differences are. An often-used way of understanding average income is the scenario of a millionaire residing on a block full of homeless people. If there is a neighborhood where there are ten residents, one being a millionaire and nine being homeless, the average income for that neighborhood is $100,000. This is too simple, but it may help when considering these points. Median is better, and you will be wise to avoid averages.

Nobody has nothing

The income disparity in the United States is shocking, and challenging for the average person to conceptualize. The U.S. Census Bureau says forty-two percent of households have two or more working persons. Though remember, you cannot spend your roommate's money. Regardless, a very tiny number of people make much of the wealth of the nation. I will note that everyone makes money from something – be it a wage, stocks, entitlements or welfare, et cetera. For this reason, there is hardly any person with literally no income over the course of a year, skewing numbers down. Even if there were, the sheer volume of cash at the top hopelessly offsets it, skewing broad metrics upward. With that in mind, I wish to point out that I feel, as misleading as the median household income may be, it too is further compounded by this, and thus is too skews up, though not as dramatically as an average.

The income metric I prefer is individual income. From the Social Security Tax records, for 2011 in the United States, this was $26,965. Gender, race, education, and other factors reveal significant differences in this, but for the purpose of this blog post, I will stick with this overall median individual income. What you may observe is that it likely sounds a great deal more realistic to you than the household median of $51,939. Additionally, if two roommates live together and make the median personal income, the household income does match the median. How about that!

When saying you cannot spend your roommate's money, I will note that you can, though differently. You split the rent, perhaps a cable bill, and perhaps some other things. However, you are not taking their wallet to the grocery store, and they are not buying your shoes, or covering your vacation to Somalia. You very likely do not even consider splitting the rent as spending your roommate's money. You are certainly not getting any shared tax credits for your contribution.

Few political leaders want to go around citing median personal income. It makes the nation sound a great deal poorer than when citing the median household income, tactfully without attribution. In spite of the bad politics, I wish they would almost exclusively use the median individual income, because in doing so, a great deal of things begin making more sense. People can begin conceptualizing the income gap a bit better. Perhaps they may become less inclined to lie about their income in surveys, upon realizing they actually make what most people make, or are already making a bit more, so they will not feel a need to lie. Perhaps they may begin to see it as outrageous, and demand for better opportunities.

No politician wants poverty to explode under his or her watch

Now that we have cleared the hurdle on what a real income might look like in the United States, it is time to move to poverty. The infamous poverty line is perhaps the most curious metric in economic data. We can find its use everywhere, yet there are actually two different numbers used to define poverty, one is a threshold and the other a guideline. This is already annoying. Poverty is an abstract thing while also differing by region. We can view it as an issue of ethics or morality, regardless, how government presently defines the threshold is effectively along the lines of what constitutes healthy living. Can a person achieve shelter, food, and clothing? What is a reasonable dollar figure for that? Those who can are not in poverty, those who cannot are in poverty. Start adding dependents, and with them expand the dollar figure for shelter, food, and clothing for the parent and the child. I hope this helps to show what the United States does not have, which is a good way to define it.

The 2014 federal dollar guideline considers an individual to be in poverty if they make less than $11,770 per year. Obviously, with a figure like this, the region one lives in makes some feel more impoverished than others do. In any event, this is a painfully low number with which to survive. The number increases as more dependents are added (a family of four is $24,250). Though some states and even cities have higher minimum wages, the federal minimum wage is $7.25 per hour. If working full time, a person will earn $13,920 prior to payroll taxes. For tipped employees, the federal minimum wage is $2.13 per hour, which is $4,089.60 per year, working fulltime, and prior to payroll taxes. There is an expectation that tipped employees will earn enough from those tips to reach the hourly rate of $7.25. No doubt, some exceed that figure, while others meet it, and still others do not. The main takeaway here is where the government says poverty is, is not much less than a fulltime minimum wage worker will earn. So if government were to attempt to change the metrics defining poverty, and instead using a number more reasonably accurate, the poverty rate would balloon, possibly capturing almost every worker at or near the minimum wage in the United States.

It is expensive to be poor

A lot has been made of living wages, the idea that if you work fulltime, you should not have to live in or near poverty. As noted, poverty is abstract while being heavy in ethical and moral considerations. The argument of living wages has proven rather persuasive, leading some places toward choosing to raise the minimum above the federal mark. Humans living on the lower side of the income scale certainly know how expensive it can be to be poor. For starters, everyone pays payroll tax, which is Social Security (6.2 percent), Medicare (1.45 percent), and others. Often forgotten when discussing this is sales tax. A person who makes little tends to spend most, if not all their income. After rent and other utilities, all of which have taxes, the remaining balance goes to food, clothing, and so forth. A person of means, on the other hand, will make similar purchases, but will also save or invest a larger share of their income, where it is not subject to sales taxes. In California, minimum wage has been set at $9 per hour, and the state sales tax is 8 percent. If we assume a full time individual makes the California state minimum wage ($17,280), and pays half their income in rent ($8640, indicating a monthly rent of $720), they will spend the rest, and most of that amount is subject to sales tax. A person who makes more could have this same spending pattern ($8640 in rent and $8640 in spending) while saving the remaining income and it thus avoiding sales taxes.

Furthermore, everything has fees and fines. If you are late on a bill – a common issue if you struggle to make ends meet – you will pay more than a person of means, who is less likely to be late. Many banks charge fees for those who do not maintain a certain amount in their accounts. If a person does not have a bank account, they likely rely on high-fee check service companies. Poorer communities are often considerably more policed than their well-off neighbors are, being subject to more citations and court fees. Hourly wage earners, unlike their salaried counterparts, also pay a premium for time missed from work for things like court dates or other issues, acting as an artificial tax. Urban areas are also more strident on issues like parking, which can also become another artificial tax on poverty. A person of means may pay a parking citation immediately, whereas a poorer person may have to wait, and slowly collect penalties as they save up, all while making hard choices. The litany of common examples can be staggering to consider. It merits mention too how psychologically taxing it is to be struggling.

Buying a cup of coffee should not be a major economic decision

This is about values. Do you agree with that view? Perhaps not. Many people, for philosophical reasons as well as economic, do not support the idea of a minimum wage. It may be a product of necessity, as it seems if there is no minimum, then wages would very likely be considerably less. However, its existence is a regulation preventing a free market. With that view, if an employer can find workers who agree to work for a dollar a day, there should be no reason they cannot enter such contracts. In some ways, there is movement on this front. In recent years, there has been a shift from the employer to the employee when it comes to managing the costs of labor. More firms now contract their labor directly with the worker rather than hiring their labor or subcontracting it to another firm. The employee is responsible for payroll and income taxes, and they are responsible for other things as well, such as a vehicle and its maintenance in the case of these emerging transportation services like Uber. Labor is cheaper when laborers are responsible for their own costs, regulations, and liabilities. Many tech companies, and even delivery services like FedEx, have shifted toward this model. There is no clear minimum wage as people begin working in jobs with less traditional arrangements. However, those employed in less traditional ways are also more likely not to benefit from tax schemes designed with a traditional labor force in mind. For example, the Earned Income Tax credit enjoyed by low income wage earners, and other credits, may not be always be an available option to those who do not have earned income, but rather have the miscellaneous income classification, or other variants. In addition, as jobs become less dependent on where the worker is, the more likely cheaper talent can fill them remotely, under more free market friendly contracts.

Even the most traditional of American labor, the farmer, has seen its model change. Agribusiness conglomerates now dominate. They often own all facets of their industry, including distribution. Where once a farmer worked their own land, they now contract to these commercial agribusinesses. They are less independent as tradition might lead one to think. They likely do not own the seed, feed, or even the livestock or produce. Their income is wholly dependent on large enterprises that hold all the cards. Yet they remain liable for the property tax, labor, for the equipment, and so on. These smaller family farms and ranches are unsurprisingly growing fewer, supplanted by larger less familial enterprises.

Raising awareness of things like that of stagnant wages, or the growing wealth gap, almost becomes its own cause. Both major political parties in the United States talk of these issues. The point of my exposition is to drive home some key points, and help readers understand what wages in America look like, what poverty is, where the labor market is moving, and how much more deliberation may be required when buying a cup of coffee.

Domo arigato, Mr. Roboto, domo, domo

Metropolis
Mrs. Roboto

As technology advances, more people compete on the labor market with workers around the world. Another emerging industry is robotic technology, long the fancy of science fiction. As it becomes less a need for a worker to be physically located where the job is, the labor market gets more competitive, and wages drop. It is hard for an American to undersell someone is Bangladesh. If they do, the quality of life for that American will be considerably worse than that of the person they successfully undersold. Additionally, many roles will continue moving to the robot. It will not be long before services, and even professions, will be robotic, putting what has already occurred with automatic bank tellers and self-checkout lines to shame. There have been successful tests with robotic journalists, self-driving cars, and so on. There is even research in pilotless commercial aircraft. This combination of geography being irrelevant to robots taking over for where geography matters will leave many more humans unemployable. Kurt Vonnegut's first novel, Piano Player, may prove to be prescient.

What all this leads me toward is finding a solution to a world where few can be employed, or earn enough to live. Certainly, as people continue getting poorer, and more robots take jobs, the costs of goods might go down. However, an increasing population, less space, and environmental climate change effecting water supply, farmable land, et cetera, may counter any price adjustments from global labor competition and a concurrent displacing of the remaining labor force by robotic technology. Humanity must eventually face this serious and real issue. Best to start moving toward a solution now, so it will not come too late, slogging through resistance from feeling too radical or expensive.

Humans do not exist in a utopia

The libertarian utopia is like the communist utopia insofar as there is no government in either. The key difference is that for the libertarian, individuals own everything, including the means of production, and for the communist, everyone communally own the means of production, or to put another way, none owns anything. Yet utopia is unachievable, whatever its form, without first seeing the wisdom of true enlightenment, as one finds through Chairman Meow and his teachings. This is a proven fact, for He is the only political leader in world history to have successfully lead a nation to utopia. Because Chairman Meow is not your leader, you really should just stop trying policies based on ideals of utopia. You could follow the Great Leader, and some of you might. However, most of you likely will not. So stop trying, after all, you are only human. Once you accept that achieving the libertarian or communist utopia is not going to happen, you can begin rejecting policy rooted in ideas that have the utopia as its philosophical endpoint.

Taking advantage of a privilege, if you think about it, is not something meriting pride.

Until the achievement of utopia (see above), only government can marshal the resources to tackle huge, society-wide issues. Individual humans cannot know everything about everything. There is no shame in ignorance. Socrates changed the world simply by recognizing his ignorance. Humans defer to experts all the time, from hiring attorneys, brokers, accountants, to just picking the brain of the stylist at the salon. Government does this to, but on a massive scale. Government can also compel action across all areas of society, and solve the coordination problems inherent in any attempt to marshal that action. Government can do this regardless, but it is easier to do if most people agree that it should. If you do not believe this is true, just look at your own history, circa 1941-1945.

If government is going to take on a massive project, it very likely will incur similarly massive costs. That means any proposed solution must also account for these costs. The immediate problem is poverty, followed by the continuing and eventual near-absolute displacement of most human workers. Only government can do something about this. So let us begin.

Embrace cooperative federalism and overhaul the tax system

The United States is constantly in a tug-of-war between federal power and States Rights. Knock it off. There are really only two ways you can go. One is that the United States has a strong federal government, the other is that the United States collapses into independence movements for each state and, eventually, regions if not municipalities. Some would undoubtedly love this. However, the problems facing the United States also faces each of the states themselves. Your unofficial motto is “e pluribus unum” which means "Out of many, one". Embrace it. You will need all your resources. Divide and conquer was Napoleons' unofficial motto. It worked well as a strategy. You are more powerful together than you are as a gaggle of independent people.

You also already experienced States Rights on a massive scale, and it failed miserably. The only reason your nation dropped its Articles of Confederation and adopted its Constitution, thus creating a stronger federal government, is that States Rights made for a weak nation. Years later, the Southern states gave it another go in their confederacy, and that too miserably failed them. How many times do you have to bang your head against a wall before you learn from it. Stop it. Unless independently wealthy, those who fancy the idea will kick themselves if they actually achieved dissolution of their union.

Because Chairman Meow is not your leader, you really should just stop trying policies based on ideals of utopia.

After achieving strong national unity, you can move toward tackling these issues. One of the problems the United States has, and hinted to earlier, is a complex taxing system. This is complicated further by states taxes, and even municipal taxes. The matrix that is American taxes makes it very difficult for individuals to understand how much they pay, to whom, when and where. The litany of loopholes allow those with the greatest resources to relieve their tax obligations. Worse, the tax code motivates people to engage in unethical behavior. Yes, that may sound backward. The theory goes that taxes can be used to disincentive behaviors, such as adding a tax to cigarettes to discourage smoking. This works the other way around, motivating tax evasion and sticking it to your fellow citizens. People attempt to take deductions or otherwise game the system or take advantage of special privileges, lowering their tax obligations. Taking advantage of a privilege, if you think about it, is not something meriting pride. Furthermore, those who engage in the laborious task of saving every receipt can write off more from their taxes. However, it is an unreasonable expectation for most people, especially those with lower incomes and with that, less freedom of time and the psychological liberty, to do such work. Likewise, smaller businesses have a much harder time successfully gaming the system as larger firms, who can commit more resources to the endeavor. I admit it is too easy attacking taxes, especially because everyone sees them as unfair and loathes them, but I hope I have helped to illustrate some of the reasons it may seem so unfair. How best to resolve this?

First, all income, no matter its origin, shall be income. There can no longer be multiple income classifications; earned, unearned, miscellaneous, et al. Second, there should be no deductions, at all. No Home Mortgage Deduction, credits for marriage, or any other credit or deferral, for individuals or businesses. No tax deductions for charities either. I know Americans will especially cringe on that one, but if you are an altruist giving to your church or a cause you care about, then you will give, regardless. If you donate because you get a deduction, you are selfish and deserve no praise, neither generous nor a philanthropist. Next, all income, whether individuals or businesses, is public record. There should be a website that anyone may visit showing how much money any moneymaker is making. Why is this private? Who cares? Sure, it may make lying to a person at a bar harder, but for the person on the other end, it helps them avoid manipulation. It also helps ensure we have good data, and good date means good public policy. Does all of this sound awful? If it does, it is going to get worse (before it gets better).

Another thing on the chopping block are subsidies. All of them. In place of subsidies will be something that already exists: public grants. I will leave it to legislatures to come up with schemes to provide grants when deemed appropriate, such as the small family farm faced with a bad harvest, or to ensure domestic steel production can survive international competition.

There must be only one place collecting taxes. That place is the stronger federal government addressed earlier. No more state or municipal taxes. No more sales tax; it is regressive and burdens those with the least. No more payroll tax either. Furthermore, fees must go! Fees are a way of raising taxes without calling them taxes. This cheap political stunt needs to go. Everything that is a public service must be that. How much does it cost you, personally, to get your identification card? Under this scheme, nothing (aside from that fraction of a cent from your tax contribution). How much does it cost to get a business license? Nothing. And so on. Penalties are a different matter. If you screw up, you pay penalties.

With every cent landing in your hand or cash register being considered income, without caveat or exception, and being the only thing taxed, with no deductions at all, then you can set a progressive rate for individuals and business, with everyone knowing exactly how much they pay, to whom, and when. No longer will Americans mistakenly think of their tax rate as being what they pay the Internal Revenue Service, forgetting the state income state they paid, all the sales taxes they paid, or that extra tax on their paycheck or phone bill. With this change comes awareness, and the end of the all-powerful congressional committee chairperson, tax evasion, lying about incomes, lobbying for loopholes, and so on. It also allows for a complete understanding of incomes for creating sound public policy.

It should be obvious that such a move will cause federal revenue to skyrocket. It will be up to legislators to determine how to modify the progressive tax rates. Higher earning individuals and businesses will pay more, and this will broaden the base, which is political code for making poor people pay income taxes. However, further below I will address this issue.

Apple
A New Apple Logo

Apple Inc. A foreign corporation proudly serving you from the Republic of Ireland

One important note, by abolishing deferrals, and ensuring the classification of all revenue earned being taxable income, then regardless of where the earnings occurred, if the company is American, that income is taxable. Many American companies either maintain, for tax reasons, an offshore headquarters, being little more than a mailbox, or park large sums of their revenue in overseas subsidiaries, deferring US taxes. With my proposed change, it may be likely that many companies will formalize their offshore nature, and become foreign enterprises. With this in mind, I additionally propose a requirement that all corporate logos, or perhaps in addition to logos, must include indication of where the formal base of the company is, unless they are indeed entirely American, in which case they can opt out. If they have their headquarters in a mailbox in the Cayman Islands, then on all packages, ads, et cetera, where their name is audible or the logo shown or printed, so too shall the name of the country and its national flag. In audible ads, there is the additional spoken line, to follow mention of the advertiser, of “A foreign corporation proudly serving you from the Cayman Islands”, or some similar variant, to be determined. This applies to all companies doing business in the United States, regardless of foreign origin, or where founded, except those in the United States, of the United States, and not engaged in any stunts overseas to shelter revenues from taxes, such as a local florist.

Federal and state block grants

With no state or municipal taxes, the states will collect their revenue from the federal government via block grants. These are large payments to each state from the federal treasury, based on need, population, and other metrics as determined by congress. From this tax revenue, states, in addition to covering state expenditures, may parse out their own blocks to counties, municipalities, other jurisdictions, or however else the legislatures choose. Without property tax, the present primary funding source for public schools, all schools will receive revenue from the same source, likely doled out based on need and number of students. These are matters left to the respective legislatures. I will note that removing property tax effectively supplants a home mortgage deduction, among other deductions.

Abolition of welfare, Social Security, and other entitlements

Ballooning the federal treasury, and state treasuries, further, is the abolition of most entitlements and social service programs. We have already removed payroll taxes in this proposal, and this is where Social Security, MediCare, unemployment insurance, and other taxes are collected. In addition to removing those taxes, I am also removing those programs. Say good-bye to unemployment insurance and Medicaid! I also abolish all welfare cash transfers, such as Temporary Assistance for Needy Families (TANF). Please do not fret, as I have an alternative solution that renders these redundant.

On to a new entitlement scheme

I have so far knocked out just about everything. From programs to taxes, we are at a point of making efforts to resolve heavy issues. There is now a very simple taxing program, easy to understand while fully appreciating ones obligation, whatever it may be. Much-maligned corporations will be compelled to actively and fairly participate or face public and branded exposure. There is no room for special privileges or and other benefits hidden away in a complex system. Yet now, at this point, Americans most in need are hurting more than ever. It is time for resolution.

Universal healthcare

Given the huge battle fought in the United States over the Patient Protection and Affordable Care Act, commonly referred to as ObamaCare, there can be little doubt universal healthcare is a divisive if not hated proposal. However, I have just knocked out MediCare and Medicaid, so throw me a bone here! Additionally, I am tossing the Veterans Administration healthcare system under the bus. I fully recognize that this is not perfect but a Single Payer approach does make a great deal of sense. The United States, as illustrated from all my cutting, has a very complex system of healthcare. The design of the Patient Protection and Affordable Care Act is to use the tax code to compel people to purchase private health insurance, while providing a subsidy to lower incomes. It also intended to expand Medicaid to the lowest incomes; however, court challenges thwarted this part of the overhaul. Medicaid is a health insurance system for the poor, funded by block grants from the federal government to the states. States set up their own insurance schemes using this federal money and their own contribution. Typically, Medicaid programs in the United States receive their own localized names, like Medi-Cal (California) or BadgerCare (Wisconsin). The Patient Protection and Affordable Care Act intended these to expand to cover more people, but many states successfully sued, preventing their obligation to do so. The result is some states participating, while others do not.

MediCare is a Single Payer health insurance system for those over the age of sixty-five. Most Americans like and appreciate this program, and it has shown to be effective at costs control. One possible reason for this is that, in order for a pharmaceutical firm to sell a pill to seniors, they can negotiate with only one entity representing all seniors; this is MediCare or specifically, the federal government. If they set too high a price for their pill, they will not be able to sell it to seniors through the program. MediCare therefore has a tremendous negotiating advantage.

American armed forces veterans receive a government run healthcare and health insurance service. The Veterans Administration runs managed care throughout the nation for veterans and their families. Many political leaders on both sides of the ideological spectrum laude the care they give to veterans as being the best. However, it has some significant problems, chiefly being those of technology, locations, and bureaucracy.

Many other Americans receive their health insurance through their employers. This was a creation, as an attractive recruitment option, after the Second World War. It has worked well enough, but as healthcare costs rise, so too does the economic burden on employers. A result has been a trend of employers dropping the benefit, or cutting it significantly.

Another aim of the Patient Protection and Affordable Care Act is to ensure a base level of insurance coverage that will provide the most benefit to the most people. Doing so kills the cheap, but nearly useless, plans, and with them, cheap health insurance. Employers will have, at some point, a mandate to provide at least this new baseline coverage, assuming they employ more than fifty full time employees. The working assumption, with some positive data, is that as more Americans are insured, spreading the healthcare costs around to more people, over all costs for insurance and care will be depressed. When employers cover their employees, the costs of doing so may be less, and regardless, they are to receive tax subsidies, aiming to offset any considerable increase. Once under way, Americans can assess how well this ultimately works.

For the remainder of Americans, those who are not veterans, or receive MediCare, Medicaid, or employer-sponsored health insurance, they are supposed to purchase private insurance plans. The incentive to do so is tax credits. Many have complied, but others, particularly those who are poorer and live in states that did not expand Medicaid as intended, have not.

The healthcare and health insurance system in the United States before the overhaul by the Patient Protection and Affordable Care Act was a complete mess. As you can see, it still is. A Single Payer system is, at least, one single system for the entire market. This reduces complication, exception, privilege, and the myriad of other curiosities found from one insurance plan to another. If a pharmaceutical wishes to sell a pill to an American, there is only one entity to negotiate. The tremendous advantage can help work toward lowering costs, and ensuring cost parity for health services across the nation. Private plans could co-exist and offer expanded coverage or specialty coverage for those with the means or desire. Regardless, in addition to the example of MediCare, other nations exist that employ the Single Payer approach and it has shown to reduce costs and provide quality outcomes. I do feel strongly that Americans should earnestly consider it, without shirking because of various political labels often applied to it.

Universal guaranteed income

There is no need for Social Security, unemployment insurance, welfare, or any other wealth redistribution if you have one, single, redistribution system. Tax deductions and subsidies are wealth redistribution schemes, which is among the reasons why I eliminated them. There is no need for tax deductions unless the primary aim is incentivizing particular behaviors. As noted, once you go this route with the tax code, you expose it to an assortment of problems, throwing out a welcome mat for all the lobbyists to cut their deals, and inadvertently incentivize unethical behavior, among many others. With grants in place of subsidies, the system will be more transparent, easier to quantify and manage, and regardless, everyone is getting money back.

Earlier, we looked individual income and poverty. The United States is the wealthiest nation in the history of everything. The proposed overhaul of the tax code puts everything into the treasury. Unless or until congress changes the tax rates – and remember without deductions, there are just your tax rates, no more are there marginal and effective rates – all income is subject to your progressive tax bracket, and this is based on total income, whether an individual or business. Once congress figures out how much each state will need, how much Single Payer will cost, and the normal operating expenses of government, such as national defense, paying off debt and the interest on that debt, the remainder is sent back to the taxpayers.

How much can be sent back?

First congress will need to establish metrics. A good idea would be to tie it to the consumer price index and other indices to ensure the meeting of basic needs and no incentive for prices to rise. Without tying it to something along these lines, problems may arise. If everyone suddenly has a relatively stable yet modest income, consumer demand will rise. The more demand, the more likely prices will rise. Nevertheless, the more revenue earned by businesses, the greater their tax contribution. With rising prices comes a higher guaranteed income. There will be a period of the market trying to correct and reaching some kind of equilibrium. This will happen, and it may feel chaotic, but things will smooth out.

The amount must be greater than poverty but also affordable to the treasury. This is achievable. Patience, grasshopper. Recall that not only are revenues higher because everything is taxable income, but without deductions and subsidies, government holds all that revenue. There is no giant corporate subsidies, or hundreds of billions in deductions. High earning individuals and companies pay their top rate, because there are no alternative rates. Congress will figure out a new rate system that works best to achieve these aims. Everyone is fully aware of what he or she pays, what others pay, and who to buy from (remember to buy American!).

A new problem has emerged. The individual poverty guideline is $11,770. The amount must be more than that. The federal minimum wage for a full time worker is $13,920. If a universal guaranteed income were, for example, $15,000 annually or $1,250 monthly, that would equal around $7.80 an hour or a tic more than minimum wage, an income likely taxed, depending on how congress approaches this. Filling low wage jobs will be harder. Owing to the likelihood of taxing this income, and given it is not Big Money, some may choose to work part time as a supplement, and focus on writing a book or going to school. Others may decide it enough and the time has come to dedicate themselves entirely to their dreams of forming a Metal band or embarking on a Hip Hop career. Others may just decide to raise their kids and be good, loving, available parents. Still others, secure in knowing they will not starve to death on the street, might take a risk and start a new business.

Some markets and regions will experience greater challenges in hiring than others. Let us not forget, however, that a need for employees exists. The raising of wages may occur, or other enticements, to recruit. Furthermore, let us not forget Mr. Roboto. He is coming. An economy such as this may motivate faster adoption of the inevitable automation of the services industry and other low wage jobs. It will happen anyway, and that is why this plan is, in part, preemptive.

Those who have worked beyond the maximum contribution limit for Social Security throughout their working life will see a large cut. However, persons working with incomes exceeding the maximum cutoff likely did well in their careers, and, in theory, have other investments and savings. I do recognize this proposal may hurt some people, but it is unlikely to ruin someone, if anyone. However, it is up to legislatures to determine any needed buffers to accommodate people significantly hurt by this transition.

For earners, this universal guaranteed income works out for some as an Earned Income Tax credit. For others, it replaces deductions they may have once had available to them. For others, it is a modest return. For higher earners, it is an insignificant return. Regardless, it is universal, with everyone getting it, and is a guarantee, where none can take it away. Given Americans long ago decided that corporations are people, business will also get this income. Like individuals, the smaller the business revenue, the more this will be a subsidy or deduction, whichever way they care to view it. As noted, congress will ultimately determine what the individual and corporate tax rates are, and what the guaranteed income amount is.

This massive and radical shift in policy will surely create all kinds of turmoil. This introduction of a Single Payer health insurance scheme, a universal guaranteed income, a simplified tax code, abolition of state taxes, et al sounds overwhelming. However, if it is stuck with, it will work out. Congress and state legislatures will work out the details. Things such as at what age it kicks in or how much parents receive in addition for their dependents is among the items needing assessment during legislative deliberations.

The closing weapon

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Common Sense by Thomas Paine

Now that I have presented the plan, I will close the deal. One of the first to propose a concept like this was Thomas Paine. If he sounds familiar, it is likely you heard his name in a class covering the American Revolution. Paine wrote the patriotic pamphlet Common Sense. I would like to believe that is enough. If not, fear not, for I have more! One of the most famed conservative economists, Milton Friedman, endorsed the idea of a universal guaranteed income. For the libertarians, famed Austrian School economist Friedrich Hayek also endorsed it. For liberals, the famed economist John Maynard Keynes was a fan. The founding father who wrote Common Sense, and the most famed and respected economists from conservative to libertarian to liberal all endorsed the plan. If you can bring those three together, while throwing in a Founder, then maybe, just maybe, it is a fine idea, worth your earnest consideration. My proposal is more involved and attempts to cover many more bases than just the guaranteed income, as it is a solution to everything. However, the universal guaranteed income is the linchpin, without which the whole thing falls apart.

It is critical that if a public official were to one-day say a cat from Purristan proposed that the United States eliminate Medicaid, that is, by itself, not a reason to do so. For the plan to work, all the parts must be in motion. Everybody across ideological stripes get something in this proposal. It cannot work if only some get the things they like, while skipping the things they do not like. The design of this proposal is to fix major issues, not create bigger ones.

You now have proposed a plan that allows for a freer market, one that knocks out a slew of entitlements and social programs, simplifies the tax code, and ends poverty, while providing opportunity for greater personal freedom, equality of opportunity, and addresses future stresses on the labor market. I am aware there are many issues within it, have left open many questions, and deferred a great deal to your elected legislatures. It is a plan, nevertheless. I give it to you now, as the solution to everything.

 

* By saying "solution to everything" I mean a solution to some things.

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