I have struggled over the last few months to formulate ideas to continue this series of posts. The issues here are pretty formidable, and most of them will not have an easy solution. In particular, the problem of externalities is a difficult one, I have been unable to come up with any credible alternatives to government management in the near term. I have also had trouble with formulating credible ideas on solving the technological efficiency/cost efficiency problem and the labour-saving technology issue. I have some ideas on inherited wealth, corporate democracy and global equality of opportunity, but they definitely need further refinement before they are ready to be put down on paper.
The one issue on which I feel like have a formulated at least a beginning solution is the disconnect in our society between profit and contribution. I began by considering the problem as the sum of two smaller problems. First, there are people whose earnings exceed their contribution, however you might define that. Second, there are people whose earnings do not reflect the contributions they have made.
The first group is harder to deal with. I don't think that you can ever come to a fair enough definition of contribution to be able to levy any type of tax or fine to solve this problem. The best solution that I could come up with would be a short-term one, which would involve the addition of a new top-income tax bracket. In the longer term, I actually think that income tax should be completely eliminated, with the revenues replaced by a variety of "optional" taxes like graduated sales tax and pollution taxes.
In any event, the idea goes like this: add a new income tax bracket for those individuals making more than $250,000 per year, with a marginal tax rate of something like 35% (the current top federal rate is 29% for those making over $127,021). Then, allow people to exempt themselves from this bracket (back to 29%) if they can find 1,000 people that will agree with the statement "In my opinion, this person has made sufficient contributions to Canadian society to justify their income".
This system would have to be administered electronically for ease of use. It would ideally be administered by the CRA and combined with the other system I will describe later in this post. Basically, each individual with an income over $250,000 could make a voluntary election on their income tax return to be eligible for the program in the following year. You would also allow each person declaring eligibility to make a 50-word statement about why they think they deserve this rebate. The CRA would publish a searchable database containing only the names and statements of people who had declared. Any Canadian could then access this database through the CRA website, using their social insurance number and a password, and support the claim of as many people as they saw fit.
Hopefully, this would partially and temporarily mitigate the problem by providing a tax incentive for high-income earners to contribute.
The second sub-problem here, that of people who contribute but are not rewarded, could be solved using a somewhat similar system. Anyone could put their name forward for this program, provided they are a Canadian citizen and resident and made under $250,000 in the previous year. Upon applying, each person would fill out and publish a standardized profile, highlighting their contributions to Canadian society. Once you had submitted your profile, it would be vetted by the CRA to make sure that you met the income, residency and citizenship criteria, and then made available on the web. Each person would have 30 days to accumulate 100 votes, in order to keep the number of profiles manageable. Once someone accumulates 100 votes, their profile would be available for the balance of the year. Profiles would be extensively searchable for ease of use.
Each Canadian, upon logging into the CRA system, would be given five votes per year to allocate to five people of their choice. At the end of the year, the top 1000 vote-getters would be written a cheque for $100,000 each. The cost of this program, $100mm plus admin costs, would be high, but I think it would be worth it to help reconcile the differences between profit and contribution. If the program was successful, it could be expanded.
In conjunction, I think these two programs would be a great first step towards rewarding contribution, and one small step towards the 23rd century.
