Robots and Income

[andrewducker]

All you people interested in a possible future of income, go and have a read of this.

In it the writer points out that increasing automation is basically going to create an unemployed class and that something is going to have to be done about this. He basically invents Citizen's Income, an idea I'm wholly in favour of. I sent him an email telling him that the idea had been invented numerous times before (with a few links) and some off the top of my head figures:

In my opinion, the best way to manage citizen's income is as a percentage of the median wage, and then tax _everyone_ at 50% of their wages (obviously you don't tax the citizen's income bit), simultaneously simplifying the taxation of individuals so that there are no fiddly exemptions.

Let's say that the median wage is $30,000 and citizen's income is set at 2/3 of that ($20,000).

if the person was earning nothing, then suddenly they're $20,000 better off.

If they were earning a low wage of $15,000, then they're now earning ($15,000/2 + $20,000 = )$27,500, a substantial rise.

A person on the median wage goes from $30,000 to $35,000.

A person on a high wage ($100,000) is now on $70,000.

And a person on a ridiculous wage ($1,000,000) is now on $520,000

All of these final figured should, of course, be compared to the current income _after tax_.

Of course, living in a country, as I do, with a 40% upper tax bracket, this seems perfectly reasonable to me. I'm not sure the average American is going to go for it, but it would certainly revolutionise the world - no more poor people, anywhere...

Comments

[wolflady26.livejournal.com]

Actually, the risk far from the same. The owner of a business has legal and financial risks that employees do not have. For example, the owner of a business normally invests money into it, whereas employees do not. If a company funs afoul of laws, which is stunningly easy to do accidentally, the owner can be arrested, whereas employees generally cannot (I'm not talking about purposeful breaking of laws by criminals here).

If I start a business and hire three people, say each of us gets a salary of $30k. After a year, the business goes bankrupt and shuts down. My three employees go away with $30k of profit. Whereas I have paid $2,000 a month for an office, $20,000 in advertising, $100,000 for stock, $20,000 for office furniture, computers, supplies, etc., salaries of $120,000. That's not even counting business taxes, legal advice, accountants, tons of other expenses businesses have. Balance that against my own $30,000 salary, and I think you can see that the financial risk is not the same for all four employees.

[cangetmad.livejournal.com]

And if, on the basis of a salary with the company, one of the workers has bought a house with a whacking great mortgage? Salary isn't profit, as it's eaten up with living expenses (somewhat akin to a business's running costs, no?).

[wolflady26.livejournal.com]

Erm, no, actually not.

The business owner also has living expenses, and they are totally separate from the running costs of the business.

Profit is profit, and what you do with that profit is up to you. If I buy a computer game for $5 and sell it the next day for $10, I have made $5 profit on that game. If I went out to dinner that night and spent $20, completely unrelated to that game, it doesn't mean that I didn't make $5 profit. It only means that I have to sell more games if I want to support my lifestyle.

What people do with their money is completely out of the scope of this discussion. What if the employee invested all of that salary wisely and ended up with six times his investment at the end of the year! What if you blow it at the casinos? What if you hit the jackpot at the casinos! Doesn't matter to the discussion at hand, and has nothing at all to do with the risks of starting a business.

In the scope of the business, if you go into it with zero, don't invest in anything job-related, and come out of it with $30k, your profit is $30k. If you invested $100k, your profit is -$70k. Since normal employees (not co-owners) are not asked to invest in the company, they also don't have any risk.