Trump's Baby Kiss (Eww)

Because the rich still pay too much tax

I’m so old I remember when George McGovern took flack for proposing to give every man, woman, and child $1,000 annually. Of course a thousand bucks in 1972 would be a lot more now, after inflation. The technical term for it is “demogrant.” More recently it’s been called a “Universal Basic Income” (UBI).

Now Trump has a new scheme to grant every newborn an IRA, dubbed the “Money Account for Growth and Advancement” (‘MAGA,’ get it?), seeded with a thousand dollars to start. Thereafter the account could be expanded with after-tax dollars and not taxed upon withdrawal, exactly how a Roth IRA works. Also like the Roths, the accounts would be administered by private financial firms, who would of course make tons of money from administrative fees.

Many have IRAs of one sort or another. I love mine like a rock. Many others have squat. As national retirement policy, IRAs and 401ks have been a huge failure, as the economist Teresa Ghilarducci has written. All these arrangements cost the government money, because the tax on returns that hits the ordinary person’s interest income in their winky-dink personal savings accounts is eliminated for IRAs. The difference in burden, and the resulting drain on the Federal budget, is accounted for by failing to take a bite out of income on investments as accrued, meaning annually.

The MAGA proposal competes with the idea of “Baby Bonds” promoted by Darrick Hamilton and others, but it quite differently favors the wealthy. No surprises there. It provides yet another channel by which the wealthy can legally avoid taxes on a chunk of their income.

Years ago I began a crusade against the dumb lefty version of a UBI, noting that in actuality it could be neither universal nor basic. If it was basic it could not be universal, since the Federal budget bump would be too large. If it was universal, given ordinary fiscal constraints, it would not be adequate or arguably “basic.”

Here is the ten second argument. Suppose the UBI was ten thousand dollars. Pretty basic, that, but put that aside. That’s a three trillion dollar cost for the U.S., roughly half the Federal budget. Forget about it! By contrast, Hamilton’s schemes for Baby Bonds or a negative income tax are feasible.

Another interesting idea was advanced way back by Yale law professors Anne L Alstott and Bruce Ackerman in “The Stakeholder Society.” That was for sizeable demogrants for all children upon reaching an age of 18 or so. It could be used for college or any other purpose, replacing student aid (confined, naturally, to the college-bound). The idea is that everybody would have something to look forward to, knowing they would have a start in life. The Alstott-Ackerman scheme resembled Baby Bonds, albeit at the end of the term of the bonds, rather than the beginning.

I got involved in this myself over twenty years ago with my own proposal for a “Unified Universal Child Credit,” concocted with Professor Robert Cherry of Brooklyn College. The setting was a looming Federal budget surplus of trillions. Covering the budget at the EPI, I knew it would be used to fund some kind of tax cut. Why not a progressive one?

The background for this was the existing, complex mess of tax credits for families with children. Our idea was to merge, expand, and simplify all of it. One thing I discovered is that simplification is hard to explain to regular folks, since you are starting from a complicated state of affairs.

Our proposal was enshrined in two different pieces of legislation, one sponsored by Dennis Kucinich and a smaller credit proposed by Rahm Emanuel. I spent a lot of time with Kucinich’s staff on it, but he never said thanks. Douche. I also did an event with Emanuel. Also one with Mayor Daley in Chicago, who supported the plan. I called him “America’s mayor.” Anything for the cause.

All the oxygen for this ended up being inhaled by Bernie Sanders, who proposed a $2,000 demogrant. Dumb! But easy to explain. Then there was that dork Robert Greenstein, who worried about the deficit. Ha! In the end we got none of any of that. We got the Bush tax cuts, hello deficits, and bye-bye budget surplus. This is partly why I am now a bitter old man.

Joe Biden briefly gave us something nice in a progressive vein, with an expanded Child Tax Credit (originally the idea of Newt Gingrich, for the sake of more American babies). The Rs killed it once they gained control of Congress. Now they are desperate for more babies if they will be white.

The way to establish retirement security is already there: expand Social Security. By the way, it is said to be universal, but it isn’t. Employed immigrants pay into it with payroll tax and get nothing.

There is no point in trying to gin up more babies, white or otherwise. People gonna do it at their own speed. Other countries try it, to little avail. It is nice for the families. The non-white immigrants will still come, as long as the rich nations maintain hellish conditions in the Third World.

Now at least a few Dems are ragging about Trump and the national debt. Apparently they have learned nothing in thirty years. Democrats reduce deficits, making everybody hate them. Rs complain about deficits, then blow them up with tax credits, getting all the love.

I swear, before 2028 we will all be getting checks with Trump’s picture on it. “But the deficit!” Please, STFU.