What Would a Wonk’s Perfect Policy Platform Look Like?

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.

  1. 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.
  2. 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. 
  3. 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.
  4. 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.
  5. 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.
  6. 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. 
  7. 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.
  8. 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.
  9. 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).
  10. 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.
  11. Have the central bank target nominal income. Here.
  12. 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.
  13. Get rid of the farm bill. Here.
  14. 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.
  15. 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.
  16. Single payer medicine. Doctors are severely overpaid. The only way to break the healthcare-industrial complex is to neuter it with monopsony. 
  17. In similar vein, get rid of all occupational licensing. Because it’s dumb.
  18. 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.

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30 comments
  1. Federal taxes should only be increased when inflation is high.

  2. whatsthat said:

    About rail: the population you observe is a selected sample. With rail, more people are likely to transport themselves; how do you account for this? The answer is far trickier than what you make it out to be.

    • That’s probably true. But it would still be hard to convince me long-distance travel of any kind is important to the bottom 50% of the country. It’s just not used.

      Maybe subsidize two trips per year?

  3. I think your #10 is deeply misguided. You acknowledge (some of) the great hidden costs of driving in #5 and #8, but you think that we should still try to subsidize it? The fact is that even with the massive subsidies we currently put towards driving, many people can barely afford it. Asserting that we shouldn’t change the status quo in a “driver’s country” places an enormous, immiserating burden on the backs of all but the wealthiest Americans, and it is wildly out of place in a “progressive” policy platform.

    Overall, I find myself in agreement with most of your list. But subsidies for electric cars are a huge mistake, and they undercut what should be one of the main pillars of any progressive platform: the de-automobilization of America.

  4. kevin said:

    I would support it all except my opposition to randomized schooling (14) outweighs the rest of it. Would you support random allocation into colleges? Of course not, that’s a ridiculous punishment of the best students. Punishing parents who support their children by preventing them from joining with other like-minded parents is not the right incentives.

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  6. gregor said:

    You forgot the 100% subsidy of one way ticket to India to all the Americans who either earn less than the current minimum wage or have no health insurance or have less than graduate level understanding of libertarian macro economics.

  7. ThomasH said:

    I agree that this does not look like the platform of either party, but I’d ask, which party would oppose each proposal if the other party supported it?

  8. John said:

    Occupational licensing seems naively useful to me… do you really think Yelp is an adequate substitute?

  9. asdf said:

    Your #14 is so naïve its laughable. And I’m not just talking political feasibility, you seem to know nothing about education.

    • Floccina said:

      @asdf,
      True and there is very little evidence that it would make a significant positive difference.

      • Floccina said:

        Let me add that I think that we should just ask our schools to keep the kids safer and less bullied by one another. IMO we ask way too much of schools. Schooling is the god who fails.

  10. Ray Lopez said:

    Ashok Rao for president! I would vote for him. I think perhaps all these rules can be abolished in favor of just one: abolish all government functions save those of a Pigovian tax or other negative externality would not solve, such as: government only for national defense, only for air pollution / greenhouse gas emissions. No welfare, no transfer payments, no universal health care, no subsidized buses (private buses work just fine here in the Philippines), no public roads unless per-use toll roads used. Gun control? Probably no need since private security will screen people into and out of gated communities and shopping centers, like they do here in PH. A tax on the rich bankers is probably necessary due to the moral hazard these people create with bailouts.

    • The bit about national defence annoys me no end from ‘libertarians’. Private armies are just as feasible as private buses…

  11. Floccina said:

    Funny, I am very libertarian but I would support a candidate who proposed these policies. I think the problem is less conservative/libertarian verses progressive as much as politicians knowing the game so much better that the voters. For example a team at MIT estimated that CAFE costs 6 to 13 time more per gallon of fuel saved that a fuel tax but the voter do not know the cost of CAFE but would know the cost of a tax and so we get the less efficient policy because the politicians know the game so much better than the voters do.

    When you think about what is good for politicians you understand why such policies are very difficult to get in a democracy.

    How about adding paying all retirees the same amount of SS to your list?

  12. Myb6 said:

    Ashok, my wishlist has a remarkable amount of overlap with yours. The only point I take issue with is 14. Hard mandates like that cause huge blowback, probably in the form of a massive move to private schools. Why not take a page from your numerous other externality-focused ideas and just tax homogenously-high-SES districts? Each school could choose whether they’re comfortable paying the tax or if they’d rather admit some lower-SES students and generate some low opportunity-cost social benefits.

  13. Nacho said:

    What about military spending?

  14. Instead of a negative income tax, go full Georgist with a citizens’ dividend.

    Don’t subsidize “efficient” transit, just de-subsidize inefficient transit.

    “Rules-based fiscal policy” will quickly become rules-based rent-seeking. No need for stimulus when the rest of this program is enacted.

    Combining government-monopoly schools with reduced school choice (lottery) is “the arithmetic mean of two dipshit ideas”. Fixing education is easy: let parents control tuition dollars just like they control grocery dollars.

    Community college spending will increase automatically, when you de-subsidize overvalued university education.

    Doctors are indeed overpaid, but instituting “single payer” (as if we’re not already 70% there) will just trade dollar-denominated inefficiency for non-dollar-denominated inefficiency (e.g. rationing, medical tourism, etc.) End occupational licensure and subsidies for third-party payment, and healthcare becomes not much harder a policy problem then auto care.

    The list is otherwise a great start, but it’s missing 1) unwinding of government pension scams, 2) de-recognition of most “intellectual property” (especially patents), and 3) institutional reforms toward federalism/decentralism (without which the tide of rent-seeking can only be held back temporarily).

    For a geolibertarian platform, see the Free Earth Manifesto: http://earthfreedom.net/manifesto

    • So what’s the ‘progressive’ part of your agenda? Not a dig, just curious.

      If you get your libertarian wet-dream, what guarantees that food companies won’t poison me? And what guarantees that we won’t get back to an aristocratic system where wealth is handed down with only a few exceptional individual exceptions?

      • The progressive part of the agenda is mostly where it started and what it prioritized (note all the rage over banning private schools and forcing random lottery into public ones). It comes from the fact that if this reform isn’t enacted, I still support progressive ideas like redistribution and income taxes suboptimal as they might be to the alternative.

        Things like lottery allocation into schools and strong redistribution for many things should prevent the emergence of an aristocracy. Nothing may prevent the microevent of a food company poisoning you, but it’s not like anything prevents the microevent of someone killing you today.

      • Aristrocracy was bad not because of the handing down per se, but because what was handed down was the fruits of aggression. End/undo aggression, rather than compounding it with new aggression against those who wish to hand down what they created or fairly acquired.

      • Hi, Ashok

        Sorry the comment wasn’t directed at your article. It is indeed ‘progressive’ as it features redistribution and equalising of chances. I’ll have a blog post soon in reply to yours… 🙂

        I was directing the comment to Brian Holtz, who I also thank for his answer. Basically, he’s got no problem with aristocracy. Well, let’s just say I’ll be happy to guillotine his system…

  15. Henry said:

    I’m a fan of immigration markets in theory but have always wondered how you prevent the system being abused. What is to stop money laundering and illegal activity being used to fund the visa fees in auctions? Anecdotally, this has been a problem in past attempts in Canada. Australia recently introduced a “Significant investor visa” with an AUD$5 million price tag which will also face these issues.

    I think it’s a big enough of an implementation issue given the number of uber rich people in the world to have serious doubts about the credibility of any permit auction system.

  16. CR said:

    Thoughts on tax expenditures? My guess is, thematically, you’d propose radical simplification (in fact, fancy homes for upper/upper-middle class might count as “luxuries” via #7 and be taxed extra rather than subsidized via mortgage interest deduction).

    Second question, what are some institutional reforms you’d advocate? These are all policy-area specific, but static in nature. What kind of regulatory agency reform (other than abolishing Dept. of Ed) would you like to see so that even after these initial reforms were made, more ideal policy would continue in the future?

    Final question, while it’s more local/state than federal, I think it’s fair since you touched on mass transit subsidization and occupational licensing…any thoughts about zoning/land-use reform?

    All in all, nice piece. Strikes me as an excellent “left-libertarian” starting ground for compromises between progressives and libertarians.

  17. nate t. said:

    you familiar with selling children into marriage to make ends meet? that is what would happen without taxes and regulation. one person with power would “enslave” either by physical force or resource control the population around them. this idea of low or no government is basically a communal (communist) dream manifesto which in effect does not account for the trump card or any market…the mind of the individual to skew your plans.

  18. John S said:

    Re: education–why do you not advocate tuition vouchers and/or tax credits for education (including homeschooling) instead?

  19. @Ashok. While I disagree with several of your points for both technical and values reasons, this is the first time I’ve seen a progressive actually outline logically optimal policies for achieving typical progressive aims. I’m so sick of the usual liberal blather that I have to set aside my disagreements to give you MAJOR PROPs for this lineup. There are may policies that would be common to conservatives and liberals if both actually pursued optimal policies (in particular, large parts of #2, #3, #5, #8, #9, #11, #12, and #17) as well as policies that are outside the conservative mainstream but logical for purely economic reasons (e.g. #1, #4, and #13).

  20. cthorm said:

    @ashok

    Great outline, I’m glad you put this together. As I eluded to on twitter (@cthorm), you’re missing the very important issue of electoral reform. Even the best platforms will be corrupted if the political system is setup in such a way that it encourages narrow interests and corruption. If you want democracy, you need an election system that is highly representative and promotes competition; with a winner-take-all election system that is a mathematical impossibility. We should convert to a Mixed-Member Proportional electoral system.

    Election Systems explained

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