Green Party and the Citizens' Income

Generali

cells wrote: »

I believe it is quite tht simple.

imagine a zero marginal cost business. Most people will be familiar with a hairdresser. They cut your hair at zero marginal cost. If say they operate at 50% of capacity you have a choice. Stay as is or tax them one hair cut cupon and give it to a poor person who can then redeem said haircut. What was the cost to the business? All they lost was some spare zero cost capacity. So imstead of operating at 50% they operated at 51% that day.

Exhange the word coupon for the world 5 pound token and yiu have what you would if the hairdresser was taxed more and in return received thr same in extra business.

Effectively said tax is just mandating business to give away somr of their free capacity.


At this point some will say...but most business is nit zero marginal cost....but they would be wrong most business are zero.marginal cost.

take a chocolate factory. They output a 30p bar at a marginal cost of 3p. Their farmer supplier outputs sugar and other ingredients for 3p at a marginal cost of zero


in short. If you tax business £20B and put it into the hands of the less well off yiu will find that all that £20B comes right back to business. So although they have a £20B tax outgoing they have an equivalent £20B income.

of course thr only downside and its very small imo is that the tax would be fairly uniformly applied but the income fr the spending would not be as uniform. Eg a defense contractor would see some of the tax burden but get no additional income as the recipients of the £20B are unlikely to buy fighter jets. On the other hand food outlets would benifit more than the taxes they paid etc.

Right but it doesn't come back to my business.

For a start the UK has a 'marginal propensity to import' of about 35%. That means if you give a Briton a pound they will, on average, spend 35p of it on imports and abroad whilst on holiday. That's money that definitely isn't coming into my business.

You completely fail to address deadweight loss which is the real problem with taxes. They fundamentally and irretrievably remove happiness from an economy.

IronWolf

The problem with the theory is that some hairdressers will think "screw this, I'm going to country XYZ where I don't have to pay so many taxes"

Then suddenly the 3 other hairdressers they employed are out of the job.

princeofpounds

All systems have misallocation of capital.

Yes, and some have better price discovery and corrective systems.

BTW we already have 'communism' were the state is nearly 50% of the economy. Where there is universal health care and pensions and pretty much abundance of everything. Even in the USA the supposed capitalist king prices are regulated in some industries eg electricity prices are regulated by most states

Yes, thanks to Labour that is true, although the number is near 40% of GDP now rather than 50%.

But what we have is much more accurately described as some kind of market socialism. Communism has several key tenets including a dictatorship of the proletariat, which I am pretty sure hasn't happened yet despite the petty rule of the town halls.

It may reassure you to know that I don't think unbridled capitalism is a good idea either, as it has its own faults, such an an inability to deal with economic externalities. These are probably more fixable however.

We are sitting rather midway between the two system extremes.

quickest and easiest way to do that is to use the spare capacity in the economy to produce more goods and services for everyone.

It just doesn't work that way. Employing overcapacity sounds great, but would destroy pricing of these goods and eliminate any profitability for those producers. If I get a free kitcat every day, I'm not going to go and buy another kitcat with the money, because I neither need nor want one.

Destroy that profit and you destroy and motive to reinvest, so when the surplus machine breaks down it no-one is going to bother to fix it. Your precious 'free' capacity would disappear.

Plus of course, most of what you think of as zero marginal cost is nothing of the sort.

tomterm8

onlyroz wrote: »

Seems to work OK in Cuba.

The 4,000 to 33,000 people who were executed during the initial phases of the revolution might seek to disagree with you.

References

"Cuba or the Pursuit of Freedom Hugh Thomas". Longitudebooks.com. .

a b R.J. Rummel. "Power Kills". University of Hawaii.

Black Book of Communism. p. 664.

cells

Generali wrote: »

Right but it doesn't come back to my business.

For a start the UK has a 'marginal propensity to import' of about 35%. That means if you give a Briton a pound they will, on average, spend 35p of it on imports and abroad whilst on holiday. That's money that definitely isn't coming into my business.

You completely fail to address deadweight loss which is the real problem with taxes. They fundamentally and irretrievably remove happiness from an economy.

I doubt very much our imports are 35%

but nonetheless we already have 'communism'. Everyone has access to the means of production even people who have never worked in their lives and never will. Be it the disabled or the unwilling or the unable

to assume that taxes or society is perfectly organised and at some peak optimal level right now in this point in time is quite the assumption.

Look at the varying western nations. You have arguably America towards the right and France towards the left. On average the people of each nation lives about as well as the other. The USA does have a higher GDP per capita but that is expected for reasons of good luck moreso than a supioror economic system. Good luck in the form of resources land and a larger market

cells

IronWolf wrote: »

The problem with the theory is that some hairdressers will think "screw this, I'm going to country XYZ where I don't have to pay so many taxes"

Then suddenly the 3 other hairdressers they employed are out of the job.

Yeh right

a hairdresser is going to move to Japan becuase he has to give up some spare capacity

and so what if he does. The demand for haircuts does not fall
His building wint fit in his suitcase
so all that would happen is another person wpuld fulfill that demand.

the only time the 'take my ball to japan' theory wpuld be a harm is in businesses that are exporters

tomterm8

cells wrote: »

but nonetheless we already have 'communism'. Everyone has access to the means of production even people who have never worked in their lives and never will. Be it the disabled or the unwilling or the unable

These are the tenants of communism. You can't have a communist state without all of them:

• Central banking system
• Government controlled education
• Government controlled labor
• Government ownership of transportation and communication vehicles
• Government ownership of agricultural means and factories
• Total abolition of private property
• Property rights confiscation
• Heavy income tax on everyone
• Elimination of rights of inheritance
• Regional planning

We have many of these things. We don't have all of them.

We're the closest we've been to a communist state since world war II since the most right-wing labour party in history accidentally nationalized most of the banking sector.

I always thought that was humorous, in a ridiculously dangerous kind of way.

Note: In a communist society the government also must control the press and establish total control of the media and political system i.e. in practice a communist society must be a one party state.

michaels

Back to a universal stipend, I am not sure why it is not an idea supported by the Tories although obviously at a very low subsistence level. For a party that claims that a 50% marginal tax rate deters workers I can't see how the 95% plus rates for low earners can be justified.

It is an idea I am in favour of but getting from where we are now to the new system might well cause too many problems to be practical.

GeorgeHowell

The assumption that anyone has an automatic right to any kind of subsistence without making any contribution is the thin end of the wedge towards economic oblivion.

Generali

cells wrote: »

I doubt very much our imports are 35%

Marginal propensity to import not Average propensity to import.

If you give someone an extra pound then they will spend about 35p on imports.

That is not the same thing as saying that people spend 35p of every pound on imports.