Social Security for All

1908_Ford_Model_T

There is much talk of a Medicare for All, known as M4A. If done properly, with Obamacare-like subsidies for those who make less than $50,000 per year, this can be a real cost saver for individuals, for tax payers and for small businesses.

But there is a second universal idea which is just beginning to make it into conversations here in America, Universal Basic Income, or Social Security for All. Just as a good uninvesal health care system would improve both the corporate and government bottom line and the quality of life for all Americans, so would a system that we all contributed to on an equal basis and all recieved and eual share in return. It would not threaten our capitalist system, in fact, it would open the system up to everyone and offer opportunities for creativity and innovation unlike anything yet seen anywhere in the world.

 

 

Universal Basic Income

This plan actually costs money, at least at first, but in the long run makes so much sense as to create a net improvement in the lives of over 95% of all Americans, and the remaining 5% are the richest Americans and they would not be significantly negatively impacted. If we added a 15% surtax on every individual and corporate tax dollar earned in America, we could pay each person living in America $500 per month, with an additional $500 stipend for “head of household.” Note: everyone pays in an equal share of their income, and everyone, from the homeless guy under a bridge to Jeff Bezos, gets the same amount back!

This would mean, a family of 4 would receive $2500 per month in a cash payment. It is very important that this money does not count against ANY subsidy any person is already getting, this is to leave our entire current system of taxes and benefits as is. If you are a family composed of two minimum wage workers and two children, you would still get your food stamps, your housing assistance, and your earned income tax credit as the end of the year. The 15%/$500 system is completely outside the regular structure, and is completely self-funded.

Let’s look at two examples:

Family one, is as described above, they earn a combined income of $640 per week, they pay Social Security and Medicare or about $50 per week, and a tax of $12, for a net annual income of $30,056 plus an Earned Income Credit of around $5,600, for a total household “take home” of just under $36,000 per year.

With basic income, this family would have to pay $4,500 per year due to the surtax, but would receive $30,000 in stipends, so their actual “take home” for the year would be just under $61,000.

Now, lets look at Family Two, two spouses and one child, earning $100,000 combined. with a mortgage on a $250,000 home at 4% interest, they can deduct about $10,000 per year in interest costs. They pay $7800 in Social Security and Medicare and $6,000 in Federal taxes, leaving them with a “take home” of around $86,000 per year.

With basic income, this family would pay a $15,000 surtax, and receive back $24,000 in stipends, leaving them with a “take home” of $95,000 per year.

By creating a secure base, we would allow, not only the rich and the middle class the luxury of experimenting with ideas that might lead to the next Henry Ford, or HP or one of hundreds of other ideas a person of moderate means and a little free time tinkered into something that changed our lives forever.

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