What specific policy proposals will solve income inequality and poverty?

[DC Al Fine]

Ideally, a universal basic income.

More realistic, universal health care, raising the minimum wage, probably even more important than raising the minimum wage, instituting a MAXIMUM wage so that at least some employer profits are given back to workers in the form of increased wages.

Also a crap ton of birth control. Capitalism makes you poor. Having kids before you're 20 makes you impoverished.

ITT: People who have never heard of dividends or capital gains

[DC Al Fine]

2. Set a basic minimum income at $750 per month.

Isn't this what the Earned Income Tax Credit already does? According to the 2009 CBO study cited by Wikipedia a household making $7600 per year ($633 per month) would get EITC and other federal support bringing the effective income up to $30,500 which is equivalent to over $2,500 per month.

That's a household, with what, 4 people? I think he was talking about 700 per individual.

Even if it is 4 people it's pretty close to 700 per individual. The EITC is favored economically because it avoids rewarding teenagers in wealthy households. I trust that you aren't looking to do that.

If the EITC is a tax credit, doesn't that mean it only covers households that pay an income tax? If so, doesn't that mean that households who are too poor to even pay income taxes are left out?

No, you're confusing refundable and non-refundable income tax credits. Non-refundable credits cannot exceed taxes payable while refundable credits can. The EITC is refundable.

The EITC increases with the first little bit of income, tops out at a relatively high rate, then gets clawed back after income passes a certain threshold.



From the chart above, a single mom with a child would get about $3000 if she earned income between $10 000 and $20 000. There's no way she would ever owe $3000 in tax on that income. Her actual taxes owing would be near $0 even before EITC.

[DC Al Fine]

2. Set a basic minimum income at $750 per month.

Isn't this what the Earned Income Tax Credit already does? According to the 2009 CBO study cited by Wikipedia a household making $7600 per year ($633 per month) would get EITC and other federal support bringing the effective income up to $30,500 which is equivalent to over $2,500 per month.

That's a household, with what, 4 people? I think he was talking about 700 per individual.

Even if it is 4 people it's pretty close to 700 per individual. The EITC is favored economically because it avoids rewarding teenagers in wealthy households. I trust that you aren't looking to do that.

If the EITC is a tax credit, doesn't that mean it only covers households that pay an income tax? If so, doesn't that mean that households who are too poor to even pay income taxes are left out?

No, you're confusing refundable and non-refundable income tax credits. Non-refundable credits cannot exceed taxes payable while refundable credits can. The EITC is refundable.

The EITC increases with the first little bit of income, tops out at a relatively high rate, then gets clawed back after income passes a certain threshold.



From the chart above, a single mom with a child would get about $3000 if she earned income between $10 000 and $20 000. There's no way she would ever owe $3000 in tax on that income. Her actual taxes owing would be near $0 even before EITC.

This seems like a pretty contrived system, though it's definitely much better than nothing. A guaranteed minimum/negative income tax would streamline things and target resources more effectively at those who need them the most (I don't get why the lowest-income households gain less than those in the 10000-20000 section under this system).

To encourage work/discourage welfare dependency. If you consider that welfare clawbacks act as a tax, the very poor face high marginal rates. The EITC helps reverse that.