John Moserto represent Maryland's 7th Congressional District in the Democratic Party
Americans hold a great concern for the safety of their jobs, their incomes, and their way of life. Both progress and struggle thrust the American worker into unemployment through no fault of his own. It is unfair in the extreme for one to face loss of home and food, to face abject poverty for situations beyond their control.
Plans to create jobs and to provide American workers with the skills to seek jobs are inadequate as a sole solution. Americans require a policy of Universal Social Security as a front-line protection for their livelihoods: we must abandon the model of isolated anti-poverty programs and instead consider each as part of a whole system. We must create a foundation and build upon it, with each program working with the whole.
This is the most-important, most-significant step we can take today in strengthening the American people, the American business, and the American economy.
The Universal Dividend: A Fair Share
To provide reliable Universal Social Security, we must begin with a reliable foundation. The Universal Dividend forms that foundation upon which we build our public aid. This approach avoids increases in taxes, instead functionally reducing the tax burden on the middle- and upper-class American household while increasing the income of those at deepest levels of poverty.
Greater stability and purchasing power strengthens the American consumer and the American business; reduces the burden of taxation without increasing the deficit; and strengthens and supports the working American, whether poor or middle-class, employed or unemployed. With such stability, the support of welfare is much more tractable and less expensive, from childcare support to retirement benefits.
This Universal Dividend counts every American adult as an equal share in a small proportion of the economy. Each productivity gain, every rise in GDP-per-capita, grants each American a proportional rise in the wealth returned by that share. It is, in effect, a dividend granted for our role in the economy—whether that role at the moment is to work and consume, or to find ourselves in the path of the progress which makes America as a whole wealthier and ourselves be sent to unemployment.
The same benefit goes to the highly-paid engineers building our high-tech infrastructure, to our servicemen working to defend our country, and to the lowest-paid worker bagging our groceries and serving our food. It goes to our seasonal workers and our contractors, who are constantly in and out of employment due to the nature of their jobs. It even goes to our highly-paid CEOs, although the share they pay in is much larger than the share they receive—instead, the reduction of the upper tax bracket is responsible for their lower tax burden.
It is time Americans once and for all get their fair share.
A Modest Target
This new Universal Dividend represents a share in 15% of all income—both corporate profits and the personal income of every Federal taxpayer—although I believe no more nor less than 10% is appropriate in the long run. We can grant the American people most of each new step in productivity while using the remainder to back the taxes down, with strict controls to distribute productivity gains fairly.
To reach a target of 10%, we must first establish a target of growth for the American people. The initial proposal, shown here, prohibits rate adjustments resulting in a Dividend any smaller than the midpoint between an annual, CPI-indexed cost-of-living adjustment (COLA) and the benefit at its then-current rate. During recession, when the Dividend may fall below this mark, rate adjustment is disallowed.
Should the Dividend fall below COLA, as it might in recession, then we shall base the new benchmark for each successive year on the prior year’s COLA until such time as the Dividend surpasses this adjustment. This prohibits reductions in the Dividend during recovery: only after the economy has gotten back on track will we continue to shave down the tax rate and the corresponding proportion given to each as his or her fair share.
This approach guarantees the poor become wealthier with our growing economic prosperity, even as the tax burden on the wealthiest falls toward 32%, and the Corporate tax rate to 10%. The middle-class benefit from both, as the Dividend represents a substantial portion of their income and the tax represents a substantial portion of their burden.
With the tax rate freed up from the Dividend, it also becomes possible to levy additional general taxes, for example to support a public healthcare option.
Age of Receipt
The model up to 2016 specifies distribution of the Dividend to all age 18 and above. As with the goal of a 10% Dividend, the long-term age of receipt is 16 years.
Adjustment of the age does not affect the supposed unadjusted Dividend: if this brings the Dividend below the minimum rate, then no adjustment is allowed that year.
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