Summarizing the concept I have in mind into one sentence is difficult, but I believe that I may have come up with a way to solve multiple problems at once, potentially, with bipartisan support. If there are any glaring issues with this idea, please point them out.
What I believe this plan can do:
Provide a pseudo UBI for the poorest of Americans.
Increase economic value by ushering more cash flow.
Increase tax revenue from people who tend to hoard wealth.
Increase investments in trustworthy, small businesses.
The idea is this: By using the tax refund system in place for yearly tax refunds along with the advancements in technology, we create an entirely new approach to income tax. Instead of taking out income tax in the traditional way and used in the traditional way, what I propose is an economy fueling, conditional tax credit every month from the previous month’s income tax.
Using a similar system as is in place to limit what you can spend food stamps on, this tax credit would limit what you would be able to spend this money upon: US investments, US goods, and US services. These limitations would mostly just effect the rich in this way, as they would have no way to ship this money off shore. Furthermore the funds are only there for a limited time. If not spent within a month’s time, the government takes the remaining money back as taxes as originally intended. The amount returned to you each month will be dependent on income, with the wealthiest not receiving 100% of their tax back and the poorest gaining more than they put into the system. The reason I believe that we can use this sort of system to gain bipartisan support is because while this is not beneficial to the individual rich businessman, in the eyes of a corporation this is actually a boon for their growth and sales. Thus we could potentially use capitalism against itself in this regard.
While this alone could potentially pay for itself if the richest can’t spend the money fast enough, which is a possibility, isn’t safe enough. So I suggest that the IRS begin a process of AI supported microinvestments to make quick investments and profit from what money does get back to the government. So we make the taxes profitable for more than the amount actually taxed. At first we would not be able to immediately start issuing the monthly tax credits as we build up the capital to start up this system.
This would be a tough balancing act. We’d have to be very careful. Still, I believe that if properly implemented we could use business interests and psychology to get more of the taxes the US is owed. It would create the feeling that they’re getting away with avoiding taxes with the government’s blessing. In human psychology this would “feel” better than just being taxed as usual even if a large amount of them would be taxed more. Those wealthy capable of spending quickly enough would be able to get the smugness they crave while still better investing in the US economy.
