FT 19.09 Frémont Negative Income Tax Act (Tabled)

[Anna Komnene]

AN ACT
to provide citizens with a Basic Income

Section 1 (Title)
i. The title of this act shall be "Frémont Negative Income Tax Act".

Section 2 (Negative Income Tax)
i. Citizens of Frémont earning less than $50,000 per year shall receive a check from the Treasury for $500 each month. For those earning above $50,000 per year, the amount shall decrease by $0.60 for every $1 earned. In effect, those earning more than $60,000 per year will not receive a check.

ii. Caregivers may receive payments for each dependent using the same criteria as above, with a maximum of 4 dependents.

iii. Income brackets shall be based on the previous year’s tax returns. If a person reports a major loss of income during this time period, he or she may apply for a Recovery Rebate Credit to receive their checks.

iv. All existing social programs shall remain in place.

Section 3 (Budgeting)
i. $120 billion shall be appropriated annually for the funding of this program.

Section 4 (Effectiveness)
i. This bill shall be effective the month following its passage.

Sponsor: FDB

The floor is open!

[Unconditional Surrender Truman]

My biggest concern would be how we intend to pay for this. §3 would be an effective increase in anual expenditures of nearly 20%. Does the sponsor have any ideas for new sources of revenue?

[Battista Minola 1616]

I am conditionally open to the idea in general.

For what concerns the funding, I think sales taxes are generally best avoided - I would prefer if possible to cover this through a mix of the income tax, the corporate tax, and the property tax. At the same time I recognize that squeeze out another $120 billion from those is not easy.

[Amanda Huggenkiss]

I have not yet made up my mind about UBI and I am open to being convinced in favor of it, but I have some issues with this piece of legislation.

First of all, the name is of the bill indicated that its goal is to establish a negative income tax, but all it really seems to do is to give out grants. As far as I know, a negative-income-tax-based UBI works by restructuring the income tax in a way that leads to lower-income earners receiving money from the government, but this is not really what the bill does. It establishes an income without touching the tax code. While that is a form of UBI, I don't think that would count as a negative income tax. But I admit that I am no expert on this issue and I am willing to learn otherwise.

Second, I have some concerns regarding the impact of the introduction of UBI, namely the price hikes that seem like a likely consequence of this measure. I am especially concerned about tenants. How can it be ensured that landlords will not abuse this measure in order to earn an extra 500$ per tenant? But I see the danger of price hikes also in other areas. People who seek to maximize their profits will take notice of this bill and the fact that consumers have more money to spend. 

[YE]

When I was FM, we had the money for a negative income tax given the weird budget situation at the time. But I don’t think we can afford it anymore and with taxes on the rich already that high, our ability to pay for it is somewhat limited.

[YE]

When I was FM, we had the money for a negative income tax given the weird budget situation at the time. But I don’t think we can afford it anymore and with taxes on the rich already that high, our ability to pay for it is somewhat limited.

One of my proposals to pay for this is a tax increase on the upper-middle class. Would you be open to that?

I wouldn’t rule it out but I question how feasible that is.

[Battista Minola 1616]

While it is true that this bill is fairly different in the details, I would note that we have the following: https://talkelections.org/AFEWIKI/index.php?title=Basic_Income_Guarantee_Pilot_Program

Nearly a year has gone since its passage, incidentally, which means it is almost ripe for its first yearly assessment as specified by the act.
Observing how Santa Cruz County is doing could give hints as to the potential effectiveness of the program here advocated by FDB.

[Anna Komnene]

24 hours for objections to the amendment.

(Feel free to keep debating in the mean time)

[AustralianSwingVoter]

I don't in any way support this measure. Welfare is the responsibility of the federal government and a negative income tax, if introduced, should be introduced at a federal level as a direct replacement for some existing welfare programmes.
However if we are to pass this then I think it's vital that we cover the cost with a much needed Sales tax rather than continuing to increase our already high income.
And I strongly object to this amendment. Those earning over 200k would be paying 25% regional income tax on top of 34-36% federal income tax. A combined income tax rate of 60% is simply absurd and not economically viable.

[Unconditional Surrender Truman]

I will say I am skeptical as well. While it's important to remember that the hike would only apply to earnings over $200k, it is not something we want to rush into without considering the effects.

It would be useful if we could see the member from Idaho's figures. How many people does he estimate would be eligible for this benefit, both before and after the amendment?

[Anna Komnene]

Withdrawing this. I hope a similar bill will be considered on the federal level and with budgetary issues sorted out.

Just to clarify. Are you withdrawing your amendment or your sponsorship of the bill?

[Anna Komnene]

FDB's sponsorship is withdrawn.

The rules appear to give me discretion to table a bill with no sponsor present, so consider this legislation tabled.