I write mostly single-issue posts. But since someone asked me, it might be worth summarizing what I think would be a “dream” legislation reforming everything from taxes and immigration to monetary policy and farm bills. This is by no means thorough or exhaustive – but just a sampler of what I think would put the United States well on the cutting edge of policy (an honor currently held by Scandinavian countries). I’ll also link to subjects about which I’ve written somewhat extensively before.
- Immigration permit markets. The Federal Government would implement a monthly quota on the number of immigrants it wants and auction those on the open market. This would ensure that the n immigrants that are selected are the best n in the pool of all immigrants. Individuals, firms, cities, and states may all participate in the auction.
- Eliminate corporate taxes. That doesn’t mean “cut taxes”. Tax revenue should be higher, but corporate taxation is a dumb way to get there. It’s not that I have a problem with “double taxation” per se, but it adds many layers of unnecessary complexity.
- Get rid of the minimum wage for new labor market entrants. Within a immigrant permit market framework, the minimum wage unfairly hurts the young as well as poor and unskilled immigrants. This is a humanitarian issue. Labor market regulation should be deeply relaxed for five years after the first day of employment as a major in the United States.
- Replace it with a negative tax for the poor. I support expansion of the earned income tax credit, but it’s deceptive to speak of it as a substitute for the minimum wage. A good portion of the credit actually goes to employer, implying that it is complimentary with a minimum wage.
- Replace all levies on labor and capital income with taxes on land, carbon, and minerals. This is so self-evidently important that it’s hard to defend in a paragraph. There’s a good argument to be made that so-called “Georgist” taxes can’t fund our government. Fine – but at least we should “use it all up”, if you will, before we tax productive activities like working and investment. That’s doubly-true for carbon.
- Finance any shortfall thereof in revenue with a 10% tax on all income earned over 1 million dollars. Or 15%. Or 5 million. It doesn’t really matter. Most people hate income taxes not because they pay too much, but because they pay at all. The documentation is annoying, and April 15 is an understandably crappy day. The simple fix is to make sure that only a remarkably small number of people even pay.
- Offset positional externalities by taxing luxuries. I’m normally not a fan of government bureaucracy and regulation, but perhaps the Federal Government should create a “Luxury Monitoring Board” that studies and publishes a yearly report of items whose value are mostly positional (that is to say zero sum). Institute a tax on said items. This has big public choice problems, but a lot less than other programs: plus it’s politically easier than raising sales taxes or something regressive like that.
- Stop subsidizing roads. We subsidize roads in all kinds of ways. Public lots underprice parking, roads are a shared good, etc. People who drive twice as much should pay twice as much. Therefore the government should extract itself from provision of urban road services and fund everything via toll.
- Don’t subsidize long-distance rail (unless it’s Hyperloop). I don’t, unlike many other progressive wonk types, have any passion for really nice, high-speed transport between urban hubs. That’s a lie I personally do, but I depart from liberal ideology that it’s a social benefit. Think about it, the people who most intensely travel the Northeast Corridor – or between San Francisco and Los Angeles – are affluent professionals that take many more flights than the average American, are more likely the fly in environmentally-shitty business class setups, and all around typify the East Coast Elite Liberal stereotype. That it’s treated as some sort of environmentalist’s dream is a joke. (In fact, a 100% tax on business class, 200% tax on first class, and 50% tax on all economy flights after your first two in a year is a great idea).
- Subsidize cheap and efficient local transport. America is a driver’s country, and we shouldn’t change that as there would be large, path-dependent externalities in doing so. Electric vehicles are still well out of reach for the average guy. Forget Tesla, even the Chevy Volt doesn’t come cheap. We should vastly increase tax credits for local efficiency. Oh, and, make space for buses.
- Have the central bank target nominal income. Here.
- Move to a much deeper rules-based fiscal policy. That means focusing on a lot more unemployment insurance and reemployment credits. That removes the political element of discretionary stimulus and molds expansionary expectations thereby dampening the initial effect of a demand shock.
- Get rid of the farm bill. Here.
- Get rid of the Department of Education and allocate every child into school by a random lottery. Public education is a bit (but not really) like the individual mandate. It works well if everyone uses it without segregation. There are big externalities in moving a rich kid from his bubble of a rich school to a poorer school because support from his parents will make everyone in the poorer school better of. For free! If you think about “parental positive influence” as a scarce good concentrated in the top 20% of the population, there is huge, huge inefficiency in having many rich kids go to the same school. In this case, redundancy is bad.
- End the war on drugs. I favor an all-out approach to this, but outline a somewhat original and more moderate, game-theoretic plan here. I don’t want my tax money to be wasted on a guy that smoked pot privately next door. There are not words to describe this illiberty and cruelty. It costs almost $100,000 to imprison someone, and the discounted present value of opportunity costs far exceeds that.
- Single payer medicine. Doctors are severely overpaid. The only way to break the healthcare-industrial complex is to neuter it with monopsony.
- In similar vein, get rid of all occupational licensing. Because it’s dumb.
- Vastly increase spending in community colleges. Technical, applied education is where America’s middle-class future might be. Unfortunately, we can’t increase spending until we stop cutting it. Community college should be a public good.
Okay, so there it is. A (clearly progressive) wonk’s dream. This list also shows why I’ve lost a lot of faith in the Democratic Party. Can you identify even one of the above bullet-points that a single Democrat has supported? Maybe single-payer healthcare, but that’s all I can see. Even the talk on the drug war – which is the most important bullet on the list – is basically an argument about lowering mandatory minimums rather than getting rid of them. Like I’ve said before, democrats have poisoned themselves into believing compromise is the arithmetic mean of two dipshit ideas. This sentiment holds for almost every item on this list.
This looks like a liberal list, but there’s quite a bit of stuff on there that should appeal to a libertarian. In any case, nothing here is raw and radical – but logical and moderate. America is still probably the most innovative and efficient country in the world – even without the best policies and wonkish endeavors – but we can be a lot better with straightforward changes to the status quo.