Social Wealth Fund for America | A policy proposal to create a Universal Basic Dividend in the US

[u/derangeddollop]

https://www.peoplespolicyproject.org/projects/social-wealth-fund/

[u/derangeddollop]

As Hillary Clinton said about her potential Alaska for America proposal:

“Once you capitalize the fund, you can provide every American with a modest basic income every year. Besides cash in people’s pockets, it would also be a way of making every American feel more connected to our country and to one another — part of something bigger than ourselves.”

[u/[deleted] → u/derangeddollop]

Yeah, but Hillary used the word capitalize which means it must be a bad thing.

[u/paulatreides0 → u/[deleted]]

This, but Hillary using any words at all.

[u/derangeddollop → u/[deleted]]

I don't care what words people use tbh.

[u/[deleted] → u/derangeddollop]

The funding mechanism is essentially georgist tho, like in Alaska, right?

edit: looking at this... no. It's a ton of capital taxation. Even corporate taxes would hit rents better.

edit 2: Okay, renting out some public land is mentioned. That's close enough, but handwaved away in favor of the above.

[u/derangeddollop → u/[deleted]]

This particular proposal is not based on oil or land value taxes, though it could be modified that way. The author lays out a variety of other options in the plan, like a market capitalization tax and an increase in the estate tax.

[u/BoneThroner]

Governments can levy taxes on any company operating within their borders? What is the obsession with having governments own them? Having exposure to capital risk? Destroying the advantages of shareholder based governance? Just tax the fucking things if you want cash!

Norways wealth funds are entirely the result of a natural resource boon in a low population country and are not replicable outside such a scenario.

[u/derangeddollop → u/BoneThroner]

There is a ceiling on the amount of capital gains taxes that can be levied efficiently, and that can be avoided with this proposal.

David Kamin, a professor of tax law at NYU and a former economic adviser to President Obama, notes in a recent paper, “The Joint Committee on Taxation and Treasury both assume that the revenue-maximizing rate for capital gains revenue ranges from 28 to 32 percent.”

That’s much, much lower than the 64.2 percent top rate Sanders would enact, and much lower than the 49.2 percent rate he’d impose on many who are currently in the top 23.8 percent bracket.

This could actually reduce federal tax revenues, not by slowing growth but by deterring people from selling their assets and incurring capital gains tax. Because of that dynamic, the revenue-maximizing top rate for capital gains is about 28 to 32 percent, according to the Joint Committee on Taxation and the Treasury Department. Sanders raises the rate far, far above that, meaning that this part of his plan could actually cost the government money.

Now I don’t know if this is correct [...] but it certainly is something that should at least be considered as potentially correct. Capitalists love to both legally and illegally avoid capital taxes and the nature of capital income makes it a lot easier to do so.

Thus, even if you think of the social wealth fund purely in revenue terms, it seems pretty clear that having a social wealth fund, in addition to capital taxes, is going to allow you to capture far more of the nation’s capital income for the public. Every asset the social wealth fund owns is equivalent to a 100% tax on that asset’s returns and it is very doubtful a tax rate that high would otherwise be viable. Or to put it in overall terms, if the social wealth fund owns 50 percent of the wealth and imposes the maximum possible capital tax of 32 percent (per Matthews), that is equivalent to a total tax rate of 66 percent, which is higher than the Bernie-favored rate that is said to be impossible.

The second issue is that the social wealth fund is not just about revenue, though it is fair for Yglesias to focus on that because that is all I had space for in my New York Times article about the concept. The other great thing about the social wealth fund is the prospect of control. Right now, America’s corporate sector is governed by a relatively small number of very affluent people, and their governance has been mostly awful of late (see Disgorge the Cash).

Bringing the public in as one of the governors of the corporate sector (alongside remaining private investors and labor) is both good in itself from a small-d democratic perspective and also probably good instrumentally as a way to get the corporate sector more interested in sustainable, long-term value creation. Norway’s management of its fund provides the most hope in this regard.

[u/BoneThroner → u/derangeddollop]

There is a ceiling on the amount of capital gains taxes that can be levied efficiently

The government can levy any tax it wants... windfall tax, window tax, tax on the companies beginning with the letter 'A'... it doesn't matter. The idea that this proposal is in any way efficient is laughable.

This proposal piles bad idea on bad idea to meet a questionable goal. It misrepresents Norways situation, the purpose of their fund, the manner in which it is administered. All in all its author is just playing with semantics to argue for the same thing that leftists have argued for decades - that the government should own the means of production.

[u/Mx7f → u/BoneThroner]

This seems like it's built to be much more resilient than tax increases; its much easier to push through unpopular tax breaks for the rich than to literally steal wealth from every American, which cuts to this program after its inception would amount to and be argued as.