Well, not everyone: everyone who files a tax return. $1000 for each single person, $2000 for a married couple filing jointly. The payments would be offset by any cash payment you’re already getting: for example, Social Security, disability, or unemployment. People in jail or prison would be ineligible.
In round numbers, you’re talking about $1.5 trillion, or less than half the Federal budget, or 10% of GDP.
The program would be financed not by taxes, but by special bond issues which would be purchased, directly or indirectly, by the Federal Reserve. The Fed would hold the bonds indefinitely, and return the interest to the Treasury.
The program would be reduced or eliminated if inflation rose: say, 10% for every 0.2 above 5%. So, for example, payments would be reduced by 50% if inflation hit 6%, and eliminated at 7%.
How is that different from the normal standard deduction (besides being much smaller)?
Single $6,100
Married Filing Jointly $12,200
Married Filing Separately $6,100
What would be the advantage of two people filling jointly to get exactly twice the amount? Anyway, this appears to be a variation of Mises negative income tax.
People on social security, disability and unemployment are already so unimaginably wealthy that they don’t need any more money. However, those with jobs could certainly use more. Therefore, we’ll send money to all the young, healthy, employed people?
And then we’ll finance it through debt that we don’t have to pay back?
“The program would be financed not by taxes, but by special bond issues which would be purchased, directly or indirectly, by the Federal Reserve. The Fed would hold the bonds indefinitely, and return the interest to the Treasury.”
Hey, since it is free money, why stop at $1000? Let’s give everyone $20,000 a month! The program would be financed not by taxes, but by special bond issues which would be purchased, directly or indirectly, by the Federal Reserve. The Fed would hold the bonds indefinitely, and return the interest to the Treasury.
Clearly everybody knows its not free money, and if everybody is mostly paying to themselves there’s not really that much problem, tax wise, with it. Such a scheme would however have some other benefits if it supplants the plethora of other public subsidy arrangement there is, with one single uniform one.
It might make sense to do away with the dozens and hundreds of various assistance programs that subsidize dozens and hundreds of things, and just hand everyone in the country a check on the first of the month, and let them spend it however they like. Then we do away with social security, unemployment, WIC, food stamps, home mortgage interest deductions, tax brackets, housing assistance, minimum wage, personal deductions, and on and on. We’ll probably have to increase the nominal tax rate a bit, low income people essentially pay negative income taxes as the monthly is much larger than what they pay in taxes, middle income people pay low taxes as the monthly check is about the same as they pay in taxes, high income people get a drastically simplified tax code that means they’ll have to pay a higher effective rate.
It is a simplified version of the negative income tax, the simplicity is that every dollar you earn is a net benefit since you can never edge over income limits to assistance programs. Dramatic decreases in bureaucracy since you don’t have to monitor or administer assistance programs, everyone gets a check whether they’re a crackhead living under a bridge or Bill Gates. I suppose if you’re incarcerated then your monthly check will be garnished to defray the cost of keeping you locked up.
It’s a pretty good idea, the primary benefit is simplicity and transparency, since poor people already get all kinds of random-ass direct and indirect subsidies. However, this is why we will never ever implement something like this. Everybody likes the convoluted method because it hides all sorts of things that various people prefer to keep hidden for various reasons.
