Thread by @freshjiva

Thread: @AndrewYang was right. We need a #UBI and universal healthcare coverage.

The civic unrest we're witnessing is a symptom of serious underlying economic problems. Race relations are merely a trigger, but in my view, it's an ever widening wealth gap.

I have 2 proposals:

1. Implement a #UBI of $1000/mo for all US citizens & PR holders >= age 18, and index it to total federal tax revenue, which has grown 4.92%/yr since 1980.

As tax rev grows, so does the UBI, with a high watermark, so if tax revenue falls (recessions, etc), UBI remains steady.

This guarantees everyone gets an equal equity stake in the US economy AND grows as the US economy (and thus tax revenue) expands.

Notice how tax revenues grow regardless of political party in charge of the White House/Congress. This approach is thus immune to politics.

The cost of this UBI (back of the envelope math) is:

200M adults in the US
X $12000/yr
= $2.4 trillion in Year 1, to grow at approx 5% per year on average. Sometimes more, sometimes less, but never below the high watermark achieved.

2. Subsidize private insurance so that you can buy whichever insurance you'd like for a max out-of-pocket cost of $500/mo for a family of 4, regardless of pre-existing conditions or prescription med needs.

This achieves 5 highly desirable outcomes:
3(a) Everyone gets covered, because the UBI guarantees everyone can afford insurance. A family of 4 with 2 adults thus brings in $1500/mo and full health coverage.
3(b). You get to pick which insurance works best for you & your family.

3(c) Insurance is not tied to employer. Switch jobs, or if you're jobless, you're still covered under the same plan.
3(d) Reduces the cost of labor for employers, thus being pro-jobs AND incentivizes hiring rather than keeping workers on 1099s.

3(e) Insurers still have to compete to win your business. They also build their risk pools in accordance with risk models and receive adequate comp. This is therefore the best blend of socialism (govt subsidies) and market capitalism (competition & proper risk modeling).

Back of the envelope calculation on the cost:

320M Americans
/ 4 per family
= 80M families
X 20k/yr avg cost of coverage (see graphic below)
= $1.6T
- 80M families X $6000 family contribution
= $1.1 trillion net cost

Total cost of the $1000/mo UBI + government subsidized private health insurance with $500/mo max OOP cost to the individual:

$3.52 trillion in Year 1

With likely growth of cost of approx 4-5% per year. This lines up well with the long-term annualized growth in tax revenue.

To pay for these programs, we'd end Social Security for anyone under the age of 59, as the UBI will suffice.

Medicare and Medicaid would also become obsolete, as everyone can purchase their own private health insurance, including prescription drug coverage, via the new plan.

Tax reform would also be required. My proposal:

1. End existing corporate income tax + switch to a VAT tax, i.e. tax on corporate Gross Profit of 10%.

This would fetch approx $800 billion in Year 1, according to my math, more than doubling current corporate tax revenue.

Primary benefits of a VAT tax: simpler, flatter, far less opaque and subject to accounting gimmickery. Also gives flexibility of businesses to pass on the tax to the buyer OR to absorb it, in the case of high-margin businesses. Market competition will drive these decisions.

The bottom-up economic benefits of these two programs - UBI + universal health coverage would, in my view, partially pay for its cost. But the social repercussions would be significant, and would begin to heal & mend the divide between the haves & have-nots in the US.

Everyone receives an equal share of the productive power of the US economy. And everyone gets the health insurance that works best for them, and is guaranteed to be able to afford it.

Thoughts? #YangGang @scottsantens @AndrewYang