Over the weekend, while ‘holidaying’ in Queensland, I stayed with a very close acquaintance of mine in Brisbane. They are selling their house and moving to the country, a good move, though I would have chosen somewhere else, but at least they’re moving out of the big smoke….. and they will be able to grow at least some of their food there.
In conversation, to cut to the chase, it came out that the move wouldn’t happen until at least one of them had a job at the new location. I asked “will you be in debt after selling the Brisbane house”, and the answer was no……
So I then asked “why do you need a job then?”
She replied “I need an income”… to which I just said “then go on the dole”.
“My husband won’t let me.”
“Seriously? WHY is that?” I have to add at this stage that this acquaintance of mine, whilst a little younger than me, is not in great health, not really….
“It’s against all his principles”…….. turns out of course, neither of them had any idea of money creation, nor that paying people the dole is no burden on the government. The whole burden thing regarding social security is just propaganda…
The conversation quickly degenerated into me evangelising and Glenda kicking my shins under the table. I just find it so frustrating how everyone I know, almost, is simply so ill informed. Especially when they’re people I really care about. The Matrix has too much momentum, shifting the populace’s mindset will be impossible, at least in time to achieve much at all…..
When it comes to economic policies, I discovered before the last election that the Pirate Party’s leave the Greens’, and everyone else’s, for dead….
Basic income through reverse taxation
The advance of digital technology potentially threatens vast numbers of jobs, making it increasingly urgent to reduce tax on labour to keep it competitive. At the same time, a host of issues around transparency, bureaucracy and misaligned incentives need to be addressed. Ultimately, what is required is a comprehensively different model of tax and social support.
Pirate Party Australia proposes a replacement of current systems with a unified tax and welfare system underpinned by a negative income tax. Negative income tax is tax in reverse – money paid by the government to those with low or no taxable income. It is social support provided directly through the tax system rather than through a separate welfare system. The Pirate Party plan is for a tax threshold of $37,500 in conjunction with a tax rate of 37.5%. Under this plan the first $37,500 of earnings will be tax-free, with a tax rate of 37.5% applied on earnings above that. However, people earning less than $37,500 will receive 37.5% of the shortfall transferred to them from the government in the form of negative income tax. Thus, persons earning nothing at all are guaranteed a basic income of just over $14,000 (representing 37.5% of the $37,500 by which they fall below the threshold). All thresholds and levels would then be indexed to inflation to preserve their value. The following examples show how income is modified under a negative income tax:
|Income before tax||Tax threshold||Gap between income & threshold||Tax rate||Change in income||Income after tax||Effective tax rate|
A basic income system will provide a platform beneath which nobody can fall. It will ensure nobody can be forced into exploitative work or abusive domestic conditions under the threat of homelessness and poverty. Low, unstable wages will be stabilised and topped up, smoothing the path for those seeking to improve their skills and shift from welfare into work. A higher tax-free threshold also provides a simple and transparent replacement for the present cluttered array of thresholds and offsets. Negative income tax is a progressive tax system which currently has near-unified support among economists. The basic income guarantee will be an enabler of ‘positive liberty’, granting freedom to seek education and training, volunteer, create art and culture or raise children without bureaucratic obstacles and complex payment rules. It will be a platform on which entrepreneurship and creativity can be built.
A basic income guarantee will also play a role in re-balancing the power of individuals with that of the state. Many forms of middle class and business activity are already supported with automatic tax credits: providing social support under the same principle will mean government can no longer take income from citizens while refusing counter-obligations to citizens whose income collapses. A simple and adaptable safety net will remove welfare ‘churn’ since no taxpayer will receive benefits or vice versa. This will reduce swaths of bureaucracy and save significant costs, making the plan readily affordable.
As Malcolm Turncoat declares victory at the election, and Christopher Pain spouts idiotic stuff showing no contrition or understanding of the result, I wonder why the Pirate Party only got ~0.3% of the vote. I know a lot of people would be put off by the name, but it was that very name that actually attracted me to investigate them in the first place!
Meanwhile, back on the Tasmania project, I have bought a third ute….. I can’t believe it any more than you, and I must be a real glutton for punishment because driving this 4WD version of the first two will be even more tedious, so truck like it feels to drive. All the same, it does drive very well, with no rattles or vibrations. It is what it is, and it means being able to bring even more of our stuff down from Queensland; it was such a bargain, I will certainly make a profit from selling ute II when I get back in a couple of weeks.
Ute III is getting its pre-flight checks done at my favorite garage in Pomona as I type, where a new radiator, thermostat, brake master cylinder, assorted bushes and other annoying fiddly little things will be fixed so that I should have no trouble getting a safety certificate in Geeveston. And of course it’s having all its oils changed to make sure nothing untoward happens on the trip down. I expect this car to be just as reliable as the other two, otherwise I would not have bought another!
Whilst it’s great to have Glenda around, I’ve been away far more than I had originally planned, and I feel the urge to get back where I really belong……