We capitalists often find ourselves opposed to redistributionism and the social safety net. People who earn money ought to be allowed to keep the money they earn. It’s only fair, right?
A journalist named Tim Pool was on Joe Rogan’s podcast a few years ago and he said something that changed the way I look at the whole topic.
“I have no problem with other people being wealthy and living off of their investments and all that. But there is a point where you have to realize the coalescing of power, the monopolizing of power, is a really dangerous thing for any society. Too few individuals holding too much power can destabilize an economy, can destabilize a country… The problem with laissez faire capitalism is, over time… it eventually becomes a centralized oligopoly of a few corporations controlling everything… So all a progressive tax can really do is slow that process down, which I think is a good thing.”
When he said that, it set me on a journey to find a better way, a system for redistributing wealth without putting those at the center of the coalescing of power in charge of deciding where all the money goes.
And I have.
First things first, this program will only succeed once the entire rest of the social safety net is eliminated. WIC, SNAP, social security, Medicare, rent control, minimum wage cannot coexist with fair and impartial income redistribution (though it can absolutely coexist with my brilliant healthcare and public housing programs).
The federal government will need to be drastically reduced in size and scope in order to afford the massive loss of revenue; income, social security, and Medicare taxes account for 85% of the government’s income.
(Of course entitlement programs also constitute 46% of federal spending.)
The first step in this redistribution program is for data for the entire country’s adult population and annual earnings (composed of combined wages, salaries, tips, and realized capital gains) to be compiled and plugged into a simple open-source equation.
Like the current tax bracket system, there will be income brackets; eight to be exact. The brackets will be recalculated each year based on that year’s income data.
- The bottom bracket will be up to the 5th percentile national income, including incomes of 0.
- 5th-10th percentile
- 10th-25th percentile
- 25th-50th percentile
- 50th-75th percentile
- 75th-90th percentile
- 90th-99th percentile
- Finally, the top 1% of incomes
The percentage each bracket will be taxed at will also vary based on each year’s income data. The bottom two brackets will be taxed at negative rates, while the top 6 will be taxed at positive rates. The rates will be calculated so that every dollar collected from the top 6 will be redistributed to the bottom 2.
- The bottom bracket will be taxed at -15X%
- -10X%
- X%
- 3X%
- 5X%
- 6X%
- 7X%
- 9X%
Remember, because these are tax brackets, depending on the numbers, people earning incomes in the 3rd, 4th, maybe even 5th brackets will still be net recipients of distributions.
People at the bottom should be pleased that they will receive money. People in the middle should be pleased that they get to keep their money, and may even receive some. And people at the top should be pleased that no one receives money without working and that politicians don’t get any of it.
Of course, the government still needs to operate. We still need national defense and public services and so on. My recommendation is a flat consumption tax to feed the federal government’s coffers. That way, the more yachts and golden toilets and rounds of golf the rich buy, the more money they provide for that critical infrastructure.
And what about retirees? Most should have been able to put aside plenty in retirement savings and investments, but should the worst happen, I have already provided them with free housing and healthcare. I can’t imagine a scenario in which neither family nor private charity are able to feed them all, but just in case, I will include food for the hungry in the free healthcare provided at any of my tax-funded medical facilities.
As is the case with all my brilliant ideas, this one is not fully developed or real-world tested. I haven’t thought through where businesses fit in. I haven’t determined how consumption will be defined as opposed to investment. And whatever the government does, no one will be able to foresee all the ways the rich will find to cheat any system that can possibly be instituted.
Good thing I’m not trying to run the country.
