Tuesday, February 19, 2019

Socialism Is Good for Capitalism

Homeless Can Be Good for Capitalism

What would you say if I claimed that Socialism could increase the number of customers for almost any business by 14 percent?  You would probably laugh. But read on and be surprised.

Most capitalists oppose socialism because of a belief that the role of government is to maximize the use of capital, while reducing the size and expense of government For example, corporations desire lower corporate taxes so that they may return greater profits to their share holders. Lower taxes means a reduced government and results in, "A lessor boot heel on the neck of every struggling businessperson."

Most businesses achieve higher profits by attracting more and more customers. One way to attract more customers is to advertise. Another way is to reduce customer cost by cutting manufacturing costs by moving manufacturing overseas, or by reducing the number of employees.

But what if there was a better way to increase the number of customers?  Consider that the homeless contribute nothing to the economy and are not customers, yet draw funds from local government, and lower the quality of life for all. Consider that the poor are supported by government expense which minimizes their use as customers.  Consider that the disabled contribute little to the economy, yet draw disability funds from government. And consider that when jobs are scarce, the laid off rely on unemployment payments, far less than the prior income, and of a limited duration.

A Minimum Income

One way is to streamline and thusly reduce the size of government would be to combine the homeless, the poor, the disabled, and the unemployed.  A simple way to achieve this unification is with a "minimum income" or a negative income tax.  A "minimum income" would be administered by the social security administration. A negative tax would be administered by the Treasury Department by way of Income Tax.

I prefer a minimum income because it is administered monthly rather than annually. In its simplest form, everyone with a  social security number will receive the minimum income.

For example, a homeless man on a "minimum income" would be able to rent an apartment, pay for utilities and food, and would be in a much better position to find a job. As potentially solvent customer, he and those like him would increase spending on manufactured goods.

For example, a single mother on a "minimum income" could afford an apartment, utilities and food, and could afford to find child care so she could find a job.  She and those like her would become better customers.

Note that "minimum income" is greatest when all other income is zero.  Then for every $100 that all other income increases, "minimum income" would reduce by $50. This gradual reduction means that when a person gets a job his or her total income ("minimum income" plus other income) will increase to be more than "minimum income" alone.  It is important that minimum income not be cut off suddenly at some level, but rather tapers off so that the poor are encouraged to find employment and better their situations.

As other income increases, "minimum income" decreases at half the rate.

For example, if the minimum income was $1,000 per month, it would reduce to zero when the individual's other income reached $1,900. If a person on disability received $900 per month from the state, they would also receive $550 "minimum income." But if "minimum income" was the law, that same disabled person would receive $0 disability payment, and instead receive $1,000 "minimum income."

But if a state wanted to provide a disability payment over $1,000, they would be free to augment the "minimum income" but that augmentation would become other income and would reduce the "minimum income." For example, if a person qualified for $1,500 per month in disability, the state could pay an extra $500. $500 extra income would reduce the "minimum income" to $750, resulting in a net total disability income of $1,250.

For "minimum income" to work, it would need to be tax exempt. It must also belong to the individual and couldn't be given away, could not be used to settle a law suit nor any other property settlement, and couldn't be garnished or taken by any government nor by any corporation nor any company nor any private individual.  It could not be used to guaranty a loan, because the bank could not take it.

As you can imagine this "minimum income" could only benefit the poor directly. The population of the US is about 380 million, so if the poor represent only 14% of the population, then only 47 million people would be receive this "minimum income."

But what about dependent children of those receiving "minimum income"?  I propose that up to the age 18, such dependent children would receive 1/4 of the "minimum income" those funds to be administered by the legal guardian or parent.

And what about Social Security? It would not change, except that the minimum social security payment per month could never be less than the "minimum income."

How would we pay for the "minimum income"? One way would be to increase the social security tax rate from 6.2% to 7.2%, and to remove the wage ceiling of $132.900 at which social security taxes are cut off.

A 14% increase in the number of customers is nothing to sneeze at.  Would it be worth the cost? It depends on if the increase is permanent and can be counted on by the nation's businesses. If so, budgeting based on such a permanent fixed increase in the customer size will benefit all businesses here and abroad.

Naturally one would not want to implement a "minimum income" all at once. Instead, perhaps at the state level, one could introduce the concept using the disabled as a test, or the homeless as a test. And then track those people to see if the effect is as predicted.

Also note that $1,000 per month was a purely arbitrary guess for a "minimum income". Also note that the $50 drop in "minimum wage" per $100 increase in other income, was also a purely arbitrary guess.  Greater or lessor amounts would have to be decided by those actually implementing this or a similar proposal.

Tuesday, December 11, 2018

A Better Sales Tax





A Better Sales Tax Is Non-Regressive

One problem with the normal sales tax is that the rate is the same for the poor as it is for the rich. Consider a galvanizes pail used in gardening. Suppose it cost 10.00 to buy, and suppose the sales tax were 10%. The cost of that pail would be 10.00 in states like Oregon, that don't have a sales tax, or 11.00 in states that had the 10% rate. The rate in some cities is as high as 13.5% and in others as low as 4%. But all have the same problem. The difference between 10.00 and 11.00 may seem inconsequential to folks with a high income, but to folks with a low income, the difference might be enough to encourage purchase of a plastic bucket instead.

A progressive sales tax would would look much different. It would be tiny or zero for low priced items, but would grow higher as the cost increased. For example the tax on a 10.00 bucket might be zero, whereas a tax on a 200,000.00 boat might be 4%. And the tax on the sale of a 5,000.000 home might be 8%.

When a medium income person buys a home it us usually for less then 250,000. When a high income person buys a home, they usually pay less then 1,500,000. When a wealthy person buys a home they usually pay 3,000,000 or more. It makes sense that, when a wealthy person buys an expensive property, they are uniquely in a position to afford a higher sales tax.

One possible formula for such a non-regressive sales tax might look like this:

$0                -       $9.99       %0
$10              -      $99.99      %0.25 (1/4 percent)
$100            -     $999.99     %0.50 (1/2 percent)
$1,000         -   $9,999.99    %1
$10,000       -  $99,999.99   %2
$100,000     - $999,999.99  %4
$1,000,000  - and above      %8

If you were to buy a galvanized bucket for $9.99 you would owe no tax. If you were to buy $99.99 in groceries, you would pay three cents in tax ($100.02 total). If your were to pay 1,000.00 for a car repair, you would pay $10.00 in tax (1010.00 total). If you were to pay $10,000 to five trees removed and the stumps removed, you would pay $200.00 in tax ($10,200.00 total). If you were to pay $100,000.00 for a fully tricked out Range Rover Sport, you would pay $4,000.00 in tax ($104,000.00 total). If you were to pay $1,000,000 for a small studio condo in New York City, you would pay $80,000.00 in tax ($1,080,000.00 total).

Scaling up of the tax rate moves the bulk of the tax onto the rich.  For such a non-regressive tax to work, there must be no exemptions. Although it is tempting to exempt groceries or prescription drugs, one should resist that temptation. For if groceries are exempted, then similar logic might lead to the exemption of  real estate or car purchases. The choice must be to either scale the sales tax, or to apply the same tax to all and provide exemptions.

Policy will determine the rate that the tax increases. For example, instead of doubling the tax rate for each ten times the amount, perhaps triple the tax for each twenty times the amount.

Policy will also determine the amount below which no sales tax occurs. For example, you might want to benefit the poor and middle classes together. One way to do that might be to charge zero tax for all sales below one-thousand dollars.

One advantage of scaling by a formula is that formula, and starting and ending amounts, are all that are needed to find the tax. A later law might change the starting point or the ending point or the formula, but would likely change only one of the three at at time. This simplifies updates to cash registers.

The alternative is to chart the increments and rates in law. This has the disadvantage that the chart would look like a table and the entire table might have to be altered to change one amount or rate. Updates to cash registers would require a simultaneous update of them all with a new table.

Another requirement should be that sales tax never taxes a tax. For example, sales tax should only be applied to the untaxed portion of gasoline or to the untaxed portion of a hotel room.

This blog is not the end all or be all of a scaled sales tax. It is merely intended as a means to get others thinking about a non-regressive sales tax.

Monday, April 23, 2018

Right To Vote Ammendment


    States have reduced access to voting by various means over the years. Such laws seek to disenfranchise based on poverty, sex, or race. Some states require photo ID before a citizen may vote. Others reduce the number of voting places in low income areas. Convicted criminals are routinely denied the right to vote.
    The fundamental right to vote needs to be spelled out in the constitution once and for all to insure nobody is ever denied the right to vote.
    Also, in recent history, companies, corporations, and the very wealthy have sought to influence elections in ways that reduce effectiveness of the individual vote. Although corporations are people, they are not voting citizens and so should have no right to influence elections. Also the wealthy citizen can unfairly influence an elections more than a poor citizen can. Such behavior is unfair and should be discouraged.
    In support of these ends I propose a constitutional amendment something like the following:
  • Section 1. No Citizen shall be denied the right to vote, except for reason of too young an age.
  • Section 2. Only a Citizen may vote and only a Citizen may influence an election. Non-citizens are barred by law from influencing any election.
  • Section 3. Individual wealth shall not unfairly influence any election.
  • Section 4. The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.
    Let me know what you think. Should it be worded differently. Should it be reduced to solving one problem instead of three problems? Do you think such an amendment is foolish? Or do you think it may have a chance?

Tuesday, September 26, 2017

Eugene, Oregon's EMX (BRT) Line Versus

EMX Bus Approaches Eugene Station


The Lane Transit District (LTD) opened its EMX (Emerald Express) west 11th Street extension on Sunday last the 27th of September 2017. I rode it on that opening day and found it bumpy but otherwise comfortable.
The EMX system is a Bus Rapid Transit (BRT) system. So how does EMX compare to regular buses and to light rail?


  1. EMX is basically a bus. Its stations are called bus stops. It has many reserved lanes in the roadway where only it, and right turning cars, may drive. It stops at signals just like all traffic and regular buses do.
  2. Because stops are few and far between, you can think of it as more of a Limited bus route. Riding it reminded me of the 38L on Geary Boulevard in San Francisco. A bit faster perhaps, and less crowded then the 38L. But both only stop where they cross other bus routes. In this sense, EMX is a limited stop bus route.
  3. Bicyclists slow down loading because bicycles most be placed on a special rack a the front of the bus, a rack that can only hold two bicycles. Contrast that to the new EMX bus. It has an internal bike rack that can hold three to six bicycles. And because bikes roll easily onto and off of the bus, their loading/unloading does not slow down the EMX bus.
  4. All LTD buses stick to published arrival times posted at each bus stop. The EMX bus posts those arrival times on electronic screens at each stop. When any bus, including EMX buses, runs ahead of schedule, it must pause in a bus stop and wait to get back on schedule. This is perhaps the one most annoying part of riding the LTD system. Buses that pause to fall back into schedule are frustrating. Instead, LTD signs should show when to expect the next bus in minutes. "The next bus will arrive in 7 minutes." That way, even if the bus ran ahead of schedule, the arrival would be correctly predicted without the need to pause at a bus stop. This is easy to change on EMX because they run at 10 minute intervals. So missing a bus causes little harm. This would not work on other bus lines because they run at 1/2 hour and hourly intervals where missing the bus is a crisis.
  5. Despite having laid special concrete in its lanes, the EMX bus ride was bumpy. All buses are bumpy because they run over road intended for other traffic. The only systems that are smooth are rail systems. Portland's light trail system, for example, is smooth. Light rail costs twice as much as BRT to build. EMX could have built half the distance and put in light rail. Would half the distance of light rail have made sense? Subways cost 10 times more than BRT to build. Would on tenth the distance of subway light rail have made sense? Probably not, because BRT gives you more distance for the buck, but BRT runs a third as fast as a subway.
  6. The real advantage of EMX is its frequency. During weekdays, EMX buses run one every 10 minutes. Imagine if all bus routes ran one every 10 minutes. A rider wouldn't need plan on a scheduled bus, instead the rider could simply show up at a bus stop and a bus would arrive within 10 minutes. Would buses be vastly more popular if so frequent?
  7. As an experiment, LTD should run an express on some busy route to see if frequency is a better draw than BRT with it level boarding and scheduled stops. By way of example, consider a 50x that could run out River Road crossing the 51, 52, and 55 lines. If it ran once each 10 minutes, and only stopped at transit transfer intersections, would it be as popular as the existing EMX line?
How does BRT stack up in your town?


Sunday, July 9, 2017

My new favorite artist: Jeremy Geddes

Acedia 2000
Artist: Jeremy Geddes

It is not often I discover an artist whose art I just fall in love with. Jeremy Geddes has this way of visualizing the world that takes my breathe away. Whether floating astronauts, exploding buildings, or split up people, his art is intended to, and succeeds to evoke a strong emotion, good or bad.

I discovered Jeremy in the latest issue of High Fructose magazine. If you are interested in contemporary art, you should definitely subscribe to High Fructose magazine. However, if you are easily upset by surreal art, you should skip this magazine.

Thursday, July 6, 2017

Fake Stars


A backdrop on a stage can be perforated to create the feeling of night time stars. One might call this an artificial night, or one could use the more popular word, "fake." Fake stars imply that they have been created to deceive. Artificial stars imply that they have been created to set a mood. Normally one would not call the backdrop stars fake. But these are not normal times. When the leader of the free world uses the word fake, he does so with malice.

Does this trend imply that we too should adopt a posture of malice? Should we call a toy duck a fake duck? Should we call a Teddy bear a Fake bear? Should we call a model railroad a fake railroad? Should we call an actor in a role a fake person? Should we call a photograph fake art? Should we call store Santa a fake Santa? Should we call a veggie burger a fake burger?

Personally I don't think our leaders create the world in which we live, rather we create the world in which our leaders live.

Monday, July 3, 2017

Rest On Art


While on a trip to Spokane, Washington, I awoke early went for a walk to photograph art. The night before I had seen this bench on my way to have a nightcap and ice cream. It was an art bench created by artist Timothy Biggs using old scarp machine parts from the former Steam Plant. It is not often that a bench on a sidewalk can be art.

Unfortunately the seat was not comfortable to sit upon. It reminded me of sitting on a waffle iron. Not that I have ever sat on a waffle iron. ☺

You can see more shots of this bench here.