Score: 80%
, 2 votes,
Feasibility 90%
Originality 50%
Humour 0% The Problem
The need to create incentives to work by reducing the poverty and hardship of minimum wage jobs within a sustainable economic model.The Social Invention
A core goal of any fair society is what I call the ?Alpha-Line?.The Alpha Line is the level of earning below which the level of a persons happiness can be shown to decrease sharply. It is derived from global research that shows that a human is roughly equally happy whatever they earn over a certain level, but progressively less happy beneath it. The beauty of the Alpha line is that it gives us a most remarkable tool for improving human welfare.
The A-L divines the effect of earning, rather than the individuals psyche on their own happiness ? it extracts the external factor from the internal. This is because over the Alpha Line, increasing earning has no effect on happiness, so your actual happiness is then a matter of your own adaptation and is thus your own responsibility ? the state can hardly be responsible for that. It might be that a person needs to earn 5 times the alpha line in order to achieve normal happiness, but the fact that you are driven to do this depends on your own makeup. But below Alpha, the effects of less earnings have a more general effect, showing a fundamental link between earnings and welfare. So, the job of any fair socio-economic system is to get people above the Alpha Line.
The Alpha Line, adjusted for circumstances, is around 12 Thousand pounds a year. Naturally, having dependants raises this.
Ignoring such complexities, the Government thus knows that any tax that puts a person below the Alpha Line effectively is liable for generating true externally imposed causes of stress and unhappiness. This means that the stress and the injury that we know relates to that, is the responsibility of government, and it is therefore culpable for this injury. It is effectively illegal of the government to impose any tax on an individual that puts them below Alpha, except where costs are being paid for by the individual in relation to their own actions. This means that the Government can substitute redistributive taxation with instead a re-payment taxation only. (It should be noted, that if taxes are lowered, then the actual Alpha Line goes down.)
Policy Goal ?
Eliminate all Income Tax below the Alpha Line. Adjust the Alpha Line for those with dependants so that the same effect is observed.
Raise Minimum Wage.
The government has a responsibility to not tax in any way which impedes the ability to contribute a net higher wealth. This means that making getting a job pay is more important than giving benefits. Alpha line would mean that minimum wage jobs are not getting taxed up to at least a standard working week in total hours. The raising of minimum wage should be to the level required to get to Alpha Line in a standard working week.
Let?s call this ?Alpha Wage?
At 40 hours per week, the Alpha Wage is ?5.77
Lets call it 5.50 since the line drops without taxes. To achieve a national minimum wage of 5.50 will mean helping employers. To that end, the government must cut taxes placed on the employers end for earnings per employee below Alpha. This could be done by treating NI as a redistributed form of wealth ? the welfare paid by the richer to the poor.
So, no NI on the employer?s side, or employees, until Alpha is reached. This can be augmented with other tax exemptions linked to Alpha.
To support the employer and employee tax cuts will mean introducing savings in the welfare state or taxing more. I favour, in the U.K?s case, a tax cut through savings in the welfare state. If a person can get a job that pays enough to get a basic quality of life, then why should they conceivably receive any benefits? There is no longer a case for benefits, unless the individual is unable to work because:
There aren?t any jobs
They can?t because of genuine illness
As the availability of jobs can be assessed from the job centre, the government can enforce the work rule ? you have to find a job if they are available. If there is a surplus of people to jobs, then benefits can be authorised only then.
During the search for a job, you should be loaned interest free, and pay back when over the Alpha Line ? the same principle as the student loan. This ties a person to their behavior. The potential savings of better policed benefits are so huge that the Alpha Line can be realised. Alpha makes working more attractive, and incentivises people who are unemployed back to work as the minimum wage job is itself a big reason why the jobless stay this way. We are removing the financial reason that could be justified for not working.
Please discuss in the forum - topic 're Alpha Line'....
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