Americans of GTPlanet, how would an extra $1,000 a month impact you?

[Zona]

Per title basically.

I've been following the recent DNC candidate train, and Andrew Yang is proposing a Freedom Dividend of $1k a month ($12k) per year from the Government for all American Citizens aged 18+.

How would having an extra $1k a month impact you and your family?

Some videos below on Andrew Yang:

Spoiler: Video

 

[Northstar]

Depends where it came from.

From my employer it would be great since I never give him money.

From the government it would be terrible since they regularly take my money. I would rather them just "give" me more money by not taking so much in the first place.

 

[Rallywagon]

Depends where it came from.

From my employer it would be great since I never give him money.

From the government it would be terrible since they regularly take my money. I would rather them just "give" me more money by not taking so much in the first place.

If I remember correctly, the idea is to change the structure of corporate taxes as more and more jobs become automated. The money used for UBI comes from corporate taxes, not from income taxes. I could be wrong, but I believe that is how Yang laid it out on his JRE visit.
Ack, so looks like its a VAT. It sounds like its going to land on the corporate side, but, we all know how that doesnt play out, and will likely land on the consumer.

 

[Exorcet]

As the money is funded by taxes:

https://www.yang2020.com/what-is-freedom-dividend-faq/

I wouldn't want it.

Its impact would be fairly noticeable as it would cover most of my expenses and I could basically save up 100% of my current income.

 

[opelgt1969]

I would be more happy if our government would stop policeing the world and give us the people of America the trillions of dollars we waste on other countries. It's a shame we give so much wasted money to wasted wars that will never be won when we have so many people that could use this money.

 

[Zona]

@Rallywagon Here in England, we have a 25% VAT.

Under Yangs proposal it would be a 10% VAT. So it's cheaper VAT rate than a lot of European countries.

 

[Rallywagon]

@Rallywagon Here in England, we have a 25% VAT. Under Yangs proposal it would be a 10% VAT.

In the states, we already have something like that. We call it sales tax. It goes to the state gov. Not all states have it, but most do. VAT will just be another tax we will have to pay, so we can give our money back to other people. If the money came strictly from the corporate sector, and could in no way be shifted to costs that the consumer has to pay, I could get behind it. Fix enterprise taxes and pull the money from there.
I cant get behind yet another dip into my wallet though. My paycheck is taxed, my purchases are taxed, my property is taxed, my vehicles are taxed, now you want to throw yet another tax on top of all that? I wouldn't need to extra grand a month if all those taxes were removed instead.

 

[Exorcet]

My paycheck is taxed, my purchases are taxed, my property is taxed, my vehicles are taxed, now you want to throw yet another tax on top of all that? I wouldn't need to extra grand a month if all those taxes were removed instead.

You'll have to pay for the VAT twice as it drives up the cost of products too. I agree, just cut taxes, especially by making the government more efficient, instead of redistributing more money.

 

[Imari]

You'll have to pay for the VAT twice as it drives up the cost of products too. I agree, just cut taxes, especially by making the government more efficient, instead of redistributing more money.

I don't know about other countries, but in Australia and New Zealand GST/VAT can be claimed back for anything that isn't an end product. So it doesn't end up driving up the cost of production, and products only have GST applied once at the end of the line no matter how many middlemen they went through to be manufactured.

Which makes sense, because otherwise the cost of everything would be absurd. A simple pen would get taxed on the oil to make the monomers to make the plastic and the dyes and solvents to make the ink and the metals and components to make the nib and the wood and pulp and paper to make the box. Something complex like a car with long supply chains would be unimaginably worse. You'd be adding hundreds of percent to every single product by the end of the line, hence why the systems usually work as I described above.

 

[Exorcet]

Alright, fair enough. It wouldn't be much different from the existing sales tax then. I didn't see the tax defined explicitly in the faq I linked, but the page also doesn't predict drastic price increases, so it probably works as you say.

 

[Danoff]

It's gonna cost me more than $1000/mo to get that $1000/mo, guaranteed. I'm the guy getting soaked for that. $1000/mo net gain over my current financial state would not change my behavior or outlook.

 

[BobK]

Given that ultimately the consumer pays the tax, let us say that everyone pays on average the same amount of new tax for this. That would be the $1000, plus the costs to administer the collection/distribution. In other words the average tax would have to be more than the "benefit". So what's the point?

 

[wfooshee]

The point is to promise magic free stuff and get elected...

I am constantly amazed at how anything "free from the government" is actually thought by the masses to be free.

Also, this is not the first program from a Democratic candidate that I've seen which says it will be paid for by corporate taxes, not private individuals' income tax, as if raiding "deep pockets" magically produces free money. Has there ever been a corporation that when taxed, did not pass that cost to the consumer in their pricing?

 

[Danoff]

I am constantly amazed at how anything "free from the government" is actually thought by the masses to be free.

To roughly 50% of voters, it is, because they pay no federal income tax (although inflation still takes a bite out of them in the end). This is a vote-buying strategy funded by the unwilling rich.

 

[PocketZeven]

It is very difficult to predict a real world scenario if it is implemented nationally and could have disastrous results.

 

[Rallywagon]

It is very difficult to predict a real world scenario if it is implemented nationally and could have disastrous results.

Or it could have miraculous results. I do believe there are a couple of pilot programs out there to see how it plays out at least on the micro.

 

[TenEightyOne]

@Rallywagon Here in England, we have a 25% VAT

England does not have a 25% VAT rate. The British-wide VAT rates are 0%, 5% and 20%.

 

[Biggles]

England does not have a 25% VAT rate. T

The British-wide VAT rates are 0%, 5% and 20%.

Thank you! Did not sound right to me!

In the states, we already have something like that. We call it sales tax. It goes to the state gov. Not all states have it, but most do.

The way sales tax works in the US is weirdly out-of-date & inequitable. It's quite clear that the US needs a revision to the way sales tax is collected. Good luck to the politician who tries to do it though!

 

[Danoff]

The way sales tax works in the US is weirdly out-of-date & inequitable. It's quite clear that the US needs a revision to the way sales tax is collected. Good luck to the politician who tries to do it though!

Different from one state to the next, and even by municipality.

 

[Biggles]

Different from one state to the next, and even by municipality.

That's a big part of the problem.

 

[Rallywagon]

That's a big part of the problem.

Why is that a problem? It goes to the state coffers, why shouldn't the state decide the what and how of it?

 

[Joey D]

Wouldn't it just be easier to cut income tax instead of just giving money away? I know Trump promised a tax cut and apparently it happened, but I never saw any real difference because I'm in the tax bracket that means I pay a bunch without anything substantial to write off. This leaves me hosed. Last year despite claiming 0 on my W2 and putting in an extra $20 a paycheck, I still had to pay.

I'd love it if I got a $12,000 tax cut though. That way I could actually keep the money I work for instead of the government sponging off of me to fund wars and give old people free healthcare. With that extra money, I could actually work on my investments more and potentially turn $12,000 into much more.

 

[Biggles]

Why is that a problem? It goes to the state coffers, why shouldn't the state decide the what and how of it?

Because a huge & growing percentage of sales are made online. Local bricks-&mortar businesses are at a disadvantage compared to out-of-state businesses that don't charge sales tax. The rules are unbelievably complicated & not reflective of the changing reality of how modern business works.

 

[Joey D]

Because a huge & growing percentage of sales are made online. Local bricks-&mortar businesses are at a disadvantage compared to out-of-state businesses that don't charge sales tax. The rules are unbelievably complicated & not reflective of the changing reality of how modern business works.

Most states collect sales tax from online sales. I think I even have to pay sales tax when I buy a game on Steam. I know Amazon for sure does, even if the item isn't coming from the Salt Lake City warehouse they have.

 

[Rallywagon]

Because a huge & growing percentage of sales are made online. Local bricks-&mortar businesses are at a disadvantage compared to out-of-state businesses that don't charge sales tax. The rules are unbelievably complicated & not reflective of the changing reality of how modern business works.

Yep, see, being a smaller governmental body that holds elections far more frequently than at the federal level, states can adjust laws and policies far faster than the dinosaur that is the federal gov. It's just as Joey says. Michigan, and most states that have sales tax, have already adopted laws that include taxes on all online purchases with a shipping address inside of the state.

Also, as for brick and mortar. Winter time is hard, but in most nice downtown areas, brick and mortar are still holding their own. I will admit this is very location specific. A lot of cities around metro Detroit, Oakland county Ann Arbor, Grand Rapids, and most of the tourist areas have very busy downtown areas that still have lots of stores doing pretty well. Malls have definitely been hit though, but I think it's those sorts of sites and businesses that have had the majority of issues. Malls and large strip malls. While I certain cant deny that online shopping is a major cause of their decline, I do also wonder if there were just to many in any given area to maintain stability. You can only have so many Menards, Meijers, Targets Wal mart's and all the others in an area before you thin out the consumer base too much.

 

[Biggles]

It's just as Joey says. Michigan, and most states that have sales tax, have already adopted laws that include taxes on all online purchases with a shipping address inside of the state.

Really? How & when do they collect the tax? I have made a lot of online purchases from the US & Europe & had them shipped to a NY address. I don't think I have ever been charged sales tax on the purchase, except in the case of a NY state business shipping to me.

 

[Northstar]

Really? How & when do they collect the tax?

Whenever you pay.

I have made a lot of online purchases from the US & Europe & had them shipped to a NY address. I don't think I have ever been charged sales tax on the purchase, except in the case of a NY state business shipping to me.

New York is late to the party, but their law took effect in June.

https://nypost.com/2019/04/04/online-shoppers-will-soon-have-to-pay-sales-tax-in-new-york/

 

[TenEightyOne]

Whenever you pay.



New York is late to the party, but their law took effect in June.

https://nypost.com/2019/04/04/online-shoppers-will-soon-have-to-pay-sales-tax-in-new-york/

That seems a bit mad... so NY customers pay sales tax at point of purchase (e.g. the UK), pay any customs due on the import, then pay an additional sales tax in their home state?

 

[Northstar]

That seems a bit mad... so NY customers pay sales tax at point of purchase (e.g. the UK), pay any customs due on the import, then pay an additional sales tax in their home state?

You only pay the tax once, this is what an Amazon order usually looks like for me in Minnesota.

I'm not exactly sure how it works when ordering from outside the country though as tax is never listed separately in my experience and customs usually gets bundled in with the shipping cost.

I've never had to pay anything additional for imported items after paying the initial cost to the seller either (this may be different when the item is more than a vinyl record).

 

[ROAD_DOGG33J]

It depends on how the tax rates work out. It could mean I ended up with less, more, or the same amount of money. I guess this is meant to appeal to the people on the lower end of the tax bracket, and the people who want to redistribute to them.