Our party has created a national dialogue about record corporate profits and taxes on the rich, yet forgotten the poor and middle-class. While Federal taxes are, on the whole, progressive, millions of working Americans struggle to pay for their homes, food, and healthcare. Unemployment and underemployment deny many full access to a fair minimum wage.
True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made. We must combat poverty and ensure economic fairness so that all Americans share in our nation's wealth and productivity gains. Even with this, Americans will not be truly free until we also provide universal access to healthcare and protect workers's rights to fair wage and working hours.
A Universal Dividend
I support—and designed—a Universal Dividend, giving every American a share in our nation's growth. As an alternative to the Tax Cuts and Jobs Act—which added $1.5 trillion of deficit to our ten-year budget—the Dividend remains revenue-neutral, creating no new deficit compared to 2016 tax policy.
The Dividend lifts the poor from poverty and raises the standard-of-living of the middle-class. It is a keystone policy for eliminating poverty, protecting Social Security, reducing the tax burden, creating and stabilizing jobs, preventing and recovering from recessions, and reducing our Federal deficit.
The Dividend funds from an uncapped FICA tax applied to both corporate and personal income. This causes it to increase with inflation and productivity, while the tax rate remains unchanged. As our nation grows in wealth, this benefit cuts deeper into poverty, and even reduces the burden on our Social Security system so as to ensure its permanent capacity to pay the full and promised benefits.
Congress must repeal and replace the Tax Cuts and Jobs Act to provides greater, permanent, and continuously-growing benefits to the poor and middle-class.
Our welfare system serves a great many people in need. In 2015, 781,035 Marylanders participated in the USDA's SNAP program—as many people as are in an entire Congressional district. Over 94,000 low-income households received housing assistance. These programs, together, bring over $2 billion of Federal funding into the State of Maryland each year, spent into our economy as a job-creating stimulus on top of the direct impact on struggling households. Yet many Marylanders—and 41 million Americans across the nation—continue to struggle with homelessness and food insecurity.
Today, one of every four HUD-qualified households receives a housing assistance benefit, while the rest wait their turn. SNAP doesn't provide enough for a healthy diet, frequently leaving people without enough food for the month. TANF programs have all kinds of limitations, and the program hasn't kept up with inflation. Clearly, our public aid programs need help.
The Dividend will move many lower-income families above the poverty guidelines, and most others close to it. This allows housing assistance, SNAP, TANF, and other aid to reach more families with a greater impact. The jobs created by the Dividend will further reduce the number of struggling households, easing the load on these programs further.
By making people less-poor, we reduce—but do not necessarily eliminate—the need and therefor cost of welfare. From there, we may lower taxes, reduce deficit spending, or expand and improve our welfare system—especially where we may better meet the needs of children in low-income households.
Protecting Social Security
Social Security supplies the Dividend as an income-tax-funded benefit dictated by the Dividend tax rate, not as a cost-of-living adjusted benefit. Because of this, the Dividend cannot become insolvent: its obligations are in terms of what it collects, rather than in a promised benefit amount.
The Dividend forms a foundation to support Social Security's retirement and disability obligations. By paying part of the obligation, the Dividend reduces the load on these programs, which in turn can continue to guarantee the total promised benefit.
As an example: a person promised $1,500 of Retirement benefits during a particular month might instead receive $700 from the Dividend and $800 from Social Security Retirement Benefits, and thus will not receive less than that $1,500 in total. Cost-of-living adjustments continue as usual, and Social Security will have to pay the full amount required to meet whatever obligations it would normally have.
Because the Dividend grows faster than COLA, these additional payments eventually represent a smaller portion of Social Security's outlay. Over time, we can lower FICA taxes or even increase Social Security's benefits without risking a loss in solvency. Social Security will be there for our nation's elderly not only in the next decade, but in the next century.