At Slate: 5-Point Plan for Fixing Everything
|November 22, 2013||Posted by Staff under Editorials|
A few thoughts about how to fix all of America’s problems. Well not really all of them. Problems will still exist. But one of my core beliefs is that most people overestimate the number of important problems in America while underestimating the severity of the handful of really serious problems.
This 2013 excerpt of Slate, Oct 23, is by Matthew Yglesias, author of The Rent Is Too Damn High.
So lets fix these five things:
Most tax reform proposals are lame small-beer nonsense that barely solves anything. Real tax reform starts with taxing land value (which should include the value of mineral resources), taxing pollution, taxing traffic congestion, and taxing public health hazards (alcohol, soon-to-be-legal marijuana, Fritos) in order to drastically reduce taxes on labor. There are meaningful positive externalities associated with people having jobs, so at the low end of the spectrum income taxes should be negative (mega-EITC, basically).
Innovate with prizes, not monopolies: Right now we create financial incentives for authors and inventors by handing out monopolies as rewards. This makes some sense as an idea, but it also drastically raises the cost of innovation alongside the reward to innovation. There’s a point on the tradeoff curve where you want to be, and we’ve gone well beyond that good point. We need to scale back copyright terms, scale back the scope of what’s patentable, stop letting IP issues dominate trade talks, and recognize that the socially optimal level of infringement is higher than zero. Then build back in some of the financial incentives with large prizes for inventions in key areas, especially battery technology (a key complement to clean energy) and pharmaceutical cures that can treat illness outside the scope of Baumol’s disease.
What is owed to people who struggle economically even in a healthy labor market with a generally growing economy and a progressive tax code? Such problems that appear to loom so large primarily because we don’t have a healthy labor market and a generally growing economy.
Ed. Notes: If you’re fixing everything, you have much more to say — Matt had more to say about three other issues — but if you had to pick only one, mine is recovering socially-generated “rents”, or the value of nature and privilege (things not made by anyone’s labor or capital), by charging full market value for things like deeds, titles, patents, copyrights, etc with a tax or fee or dues. Make all that money we spend for the nature we use into our common wealth.