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Andrew Yang wants to tax Silicon Valley to fund universal basic income plan
The 2020 presidential candidate said companies like Amazon should "pay their fair share" as automation begins to displace human workers.
- Andrew Yang is a 2020 Democratic presidential candidate whose key campaign promise is to give every American adult $12,000, regardless of their current income.
- Yang said his universal basic income plan could be funded by a value-added tax levied on tech companies.
- Yang's proposal has no shortage of critics, but he maintains that his UBI program would grow the economy by trillions of dollars.
Andrew Yang, the 44-year-old 2020 Democratic presidential candidate, says the U.S. economy needs to evolve into its next form, noting that automation and technology, such as driverless cars, are expected to displace millions of workers in coming years. To Yang, that new economy includes giving a $1,000 check every month to every American adult.
The lawyer-turned-tech executive outlined his form of a universal basic income program to George Stephanopoulos on ABC's This Week on Sunday.
"We have to solve the problems that got Donald Trump elected in 2016," Yang told ABC News Chief Anchor George Stephanopoulos on This Week Sunday. "And to me the main driver of his victory was that we automated away 4 million manufacturing jobs in Michigan, Ohio, Pennsylvania, Wisconsin, the swing states he needed to win."
Yang, who's earned a relatively small but dedicated base of #YangGang supporters, pointed to the Alaska Permanent Fund as proof that UBI programs can work in the U.S.
"Everyone in the state gets between $1,000 and $2,000 a year from oil money," Yang said. "And because it's oil money, there's no stigma attached, it's not a rich to poor transfer, and it's wildly popular in a conservative state. [...] So what we have to do is we make it a right of citizenship for all Americans and do what they are doing in Alaska with oil money, with technology money for everyone around the country."
Yang said he'd fund his UBI program, dubbed the "Freedom Dividend," with a value-added tax.
"What we have to do is, we have to join every other advanced economy and have a value added tax that would fall on the Amazons of the world, and because our economy is now so vast at $20 trillion, up $5 trillion in the last 12 years, a value added tax at even half the European level would generate over $800 billion in new revenue," Yang told Stephanopoulos.
Haha you all are the best. #yanggang https://t.co/Nvl8CexGpk— Andrew Yang (@Andrew Yang)1554690173.0
What's a value-added tax?
A value-added tax is typically defined as a tax on the amount by which the value of a product has been increased at each stage of the production chain. Here's a simpler explanation from tax expert William Gale taken from an interview he gave to The Atlantic:
"The example I always use is a loaf of bread you buy in a store for a buck — so you have a farmer, a baker, and a supermarket along the production chain. Let's put the VAT at 10 percent.
1) The farmer grows the wheat and sells it to the baker for 20 cents. The VAT is 2 cents. The baker pays the farmer 22 cents, and the farmer sends 2 cents in VAT to the government.
2) The baker makes a loaf and sells it to the supermarket for 60 cents. The VAT is 6 cents. Now the supermarket pays the baker 66 cents, of which 6 is VAT. The baker sends the government 4 cents -- he pays 6 cents in VAT but receives a two cent credit from the government.
3) The store sells the loaf to me for a dollar. I pay $1.10. The store sends the government 4 cents total - the 10 cents it collected in VAT on its sales, minus the 6 cents it paid to the baker in VAT, which it gets back in a credit. In total, the government gets 2 cents from the farmer, 4 cents from baker, 4 cents from the store. That's 10 cents on a final sale of a dollar — for a 10 percent VAT."
Why tax Silicon Valley?
The big winners of new technology are going to be companies like Amazon, not the American people, according to Yang. That's a problem, considering the retail giant paid nothing in federal taxes last year.
"Is it Amazon's fault that they paid zero in taxes?" Yang told MSNBC's Morning Joe in March. "No, it's our fault."
Amazon recently noted that it's set to pay $756 million in state and international taxes this year, and that it "pays all the taxes we are required to pay in the U.S. and every country where we operate."
As companies such as Facebook, Google, Uber, and Amazon benefit from A.I., millions of Americans are expected to lose their jobs. Yang said a third of the country will be at risk of permanent unemployment. Others in the tech industry paint a similarly stark picture, like Taiwanese venture capitalist and A.I. expert Kai-Fu Lee, who in January told CBS News' Scott Pelley that he believes 40 percent of the world's jobs will be replaced by robots that can automate blue-collar and even some white-collar jobs.
"Chauffeurs, truck drivers, anyone who does driving for a living — their jobs will be disrupted more in the 15–25 year time frame," he said. "Many jobs that seem a little bit complex, chef, waiter, a lot of things will become automated."
With these job losses looming over the horizon, Yang thinks Silicon Valley should "pay their fair share," as he told MSNBC.
How a universal basic income would affect Americans
Yang said his program would offer not only a reprieve for displaced workers, but also space for people to pursue more meaningful work.
"If you have a little bit more freedom from scarcity, then you can start making moves towards the sort of work that you want for yourself, that you value, that you find fulfilling and exciting," Yang said in an interview with Ben Shapiro.
Yang argues that removing financial pressure from Americans would allow more people to experiment with entrepreneurism, potentially leading to the creation of companies that create enormous value for the economy.
"You're going to end up creating hundreds of thousands of new entrepreneurs, guaranteed, if you have something like the Freedom Dividend, because there are so many Americans who would love to take a shot," Yang said in an interview with Kmele Foster of The Fifth Column podcast.
"Now, you could argue that, 'Hey, maybe some of these people should not be being entrepreneurs [...]' But you'd wind up with a really significant number of diamonds in the rough, and the way our system works is that a number of diamonds could potentially create so much value that it doesn't really matter what happens with the five people next to them. So, there would be, to me, if anything, an unlocking of human capital that would end up enhancing our system's dynamism."
Of course, Yang's plan has many critics. Some say the math behind the Freedom Dividend doesn't add up; others argue that giving Americans a UBI would make them lazy. It's hard to predict what would happen, but one oft-cited UBI study conducted on the Alaska Permanent Fund offers a clue: The results showed no real impact on full-time employment rates, while part-time employment increased by 17 percent.
"It is reasonable to expect an unconditional cash transfer, such as a universal income, to decrease employment," the authors said. "A key concern with a universal basic income is that it could discourage people from working, but our research shows that the possible reductions in employment seem to be offset by increases in spending that, in turn, increase the demand for more workers."
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What is human dignity? Here's a primer, told through 200 years of great essays, lectures, and novels.
- Human dignity means that each of our lives have an unimpeachable value simply because we are human, and therefore we are deserving of a baseline level of respect.
- That baseline requires more than the absence of violence, discrimination, and authoritarianism. It means giving individuals the freedom to pursue their own happiness and purpose.
- We look at incredible writings from the last 200 years that illustrate the push for human dignity in regards to slavery, equality, communism, free speech and education.
The inherent worth of all human beings<p>Human dignity is the inherent worth of each individual human being. Recognizing human dignity means respecting human beings' special value—value that sets us apart from other animals; value that is intrinsic and cannot be lost.</p> <p>Liberalism—the broad political philosophy that organizes society around liberty, justice, and equality—is rooted in the idea of human dignity. Liberalism assumes each of our lives, plans, and preferences have some unimpeachable value, not because of any objective evaluation or contribution to a greater good, but simply because they belong to a human being. We are human, and therefore deserving of a baseline level of respect. </p> <p>Because so many of us take human dignity for granted—just a fact of our humanness—it's usually only when someone's dignity is ignored or violated that we feel compelled to talk about it. </p> <p>But human dignity means more than the absence of violence, discrimination, and authoritarianism. It means giving individuals the freedom to pursue their own happiness and purpose—a freedom that can be hampered by restrictive social institutions or the tyranny of the majority. The liberal ideal of the good society is not just peaceful but also pluralistic: It is a society in which we respect others' right to think and live differently than we do.</p>
From the 19th century to today<p>With <a href="https://books.google.com/ngrams/graph?year_start=1800&year_end=2019&content=human+dignity&corpus=26&smoothing=3&direct_url=t1%3B%2Chuman%20dignity%3B%2Cc0" target="_blank" rel="noopener noreferrer">Google Books Ngram Viewer</a>, we can chart mentions of human dignity from 1800-2019.</p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDg0ODU0My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MTUwMzE4MX0.bu0D_0uQuyNLyJjfRESNhu7twkJ5nxu8pQtfa1w3hZs/img.png?width=980" id="7ef38" class="rm-shortcode" data-rm-shortcode-id="9974c7bef3812fcb36858f325889e3c6" data-rm-shortcode-name="rebelmouse-image" />
American novelist, writer, playwright, poet, essayist and civil rights activist James Baldwin at his home in Saint-Paul-de-Vence, southern France, on November 6, 1979.
Credit: Ralph Gatti/AFP via Getty Images
The future of dignity<p>Around the world, people are still working toward the full and equal recognition of human dignity. Every year, new speeches and writings help us understand what dignity is—not only what it looks like when dignity is violated but also what it looks like when dignity is honored. In his posthumous essay, Congressman Lewis wrote, "When historians pick up their pens to write the story of the 21st century, let them say that it was your generation who laid down the heavy burdens of hate at last and that peace finally triumphed over violence, aggression and war."</p> <p>The more we talk about human dignity, the better we understand it. And the sooner we can make progress toward a shared vision of peace, freedom, and mutual respect for all. </p>
Scientists find that bursts of gamma rays may exceed the speed of light and cause time-reversibility.
- Astrophysicists propose that gamma-ray bursts may exceed the speed of light.
- The superluminal jets may also be responsible for time-reversibility.
- The finding doesn't go against Einstein's theory because this effect happens in the jet medium not a vacuum.
Jet bursting out of a blazar. Black-hole-powered galaxies called blazars are the most common sources detected by NASA's Fermi Gamma-ray Space Telescope.
Cosmic death beams: Understanding gamma ray bursts<div class="rm-shortcode" data-media_id="cu2knVEk" data-player_id="FvQKszTI" data-rm-shortcode-id="c6cfd20fdf31c82cb206ade8ce21ba3f"> <div id="botr_cu2knVEk_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/cu2knVEk-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/cu2knVEk-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/cu2knVEk-FvQKszTI.js"></script> </div>
Is Bitcoin akin to 'digital gold'?
- In October, PayPal announced that it would begin allowing users to buy, sell, and hold cryptocurrencies.
- Other major fintech companies—Square, Fidelity, SoFi—have also recently begun investing heavily in cryptocurrencies.
- While prices are volatile, many investors believe cryptocurrencies are a relatively safe bet because blockchain technology will prove itself over the long term.
Presentation slide from Sanja Kon's presentation on the evolution of money at 2020 Web Summit
Credit: Sanja Kon<p>The move came shortly after the payments company Square invested $50 million into Bitcoin, and after Fidelity announced that it was opening a Bitcoin fund into which qualified purchasers could invest <a href="https://www.bloomberg.com/news/articles/2020-08-26/fidelity-launches-inaugural-bitcoin-fund-for-wealthy-investors" target="_blank">(minimum investment: $100,000)</a>. Together, this institutional backing might have something to do with Bitcoin's recent surge back to near its 2017 price peak of $19,783. (Bitcoin is listed at 19,384.30 as of Dec. 3.)<br></p>
Presentation slide from Sanja Kon's presentation on the evolution of money at 2020 Web Summit
Credit: Sanja Kon<p>But more importantly, it suggests cryptocurrencies might soon have the opportunity to prove themselves in real-world use cases. After all, skeptics have long doubted the ability of cryptocurrencies to go mainstream as a form of everyday payment. But people seem increasingly comfortable with digital payment systems.</p><p style="margin-left: 20px;">"The entire world is going to come into digital first," Schulman said at Web Summit, adding that PayPal's services already go hand-in-hand with cryptocurrencies. "As we thought about it, digital wallets are a natural complement to digital currencies. We've got over 360 million digital wallets and we need to embrace cryptocurrencies."</p><p>Sanja Kon, vice president of global partnerships at the cryptocurrency payments processor company UTRUST, also spoke at Web Summit about the increasing adoption of digital payments:</p><p style="margin-left: 20px;">"Physical cash is becoming more and more obsolete. And the next step in the evolution is digital currency."</p><p>Kon noted some of the inherent advantages of cryptocurrencies, namely ownership. </p><p style="margin-left: 20px;">"For many people, this is really the main benefit of cryptocurrency: Users owning cryptocurrencies are able to control how they spend their money without dealing with any intermediary authority like a bank or a government, for example," Kon said, adding that there are no bank fees associated with cryptocurrencies, and that international transaction fees are significantly lower than wire transfers of fiat currency.</p><p>Kon said cryptocurrencies have unique growth opportunities in areas where people aren't integrated into modern banking systems:</p><p style="margin-left: 20px;">"With cryptocurrencies and blockchain, with the use of just a smartphone and access to internet, Bitcoin and cryptocurrencies can be available to populations of people and users without access to the traditional banking system."</p>
Bitcoin as 'digital gold'<p>Still, it could take years for people to start using cryptocurrencies for everyday purchases on a large scale. Despite this, many cryptocurrency advocates see digital currencies, particularly Bitcoin, as a way to store value—digital gold, essentially.</p><p style="margin-left: 20px;">"I don't think Bitcoin is going to be used as a transactional currency anytime in the next five years," billionaire investor Mike Novogratz recently told <a href="https://www.bloomberg.com/news/articles/2020-10-23/novogratz-says-bitcoin-is-digital-gold-not-a-currency-for-now?srnd=markets-vp" target="_blank">Bloomberg</a>. "Bitcoin is being used as a store of value. [...] "Bitcoin as a gold, as digital gold, is just going to keep going higher. More and more people are going to want it as some portion of their portfolio."</p><p>There are obvious parallels between gold and Bitcoin: Both are mined, do not degrade over time, are finite in supply, and aren't directly tied to the value of fiat currency, making them <a href="https://www.reuters.com/article/us-gold-inflation/gold-as-an-inflation-hedge-well-sort-of-idUSKCN1GD516" target="_blank" rel="noopener noreferrer">relatively invulnerable to inflation</a>. The obvious objection is that the price of Bitcoin, and cryptocurrencies in general, is far more volatile than gold.</p><p>But for investors who believe the inherent value of cryptocurrency technology will prove itself over the long term, these price fluctuations are just bumps on the long road to the future of currency. </p><p style="margin-left: 20px;">"It's no longer a debate if crypto is a thing, if Bitcoin is an asset, if the blockchain is going to be part of the financial infrastructure," Novogratz said. "It's not if, it's when, and so every single company has to have a plan now."</p>
A new study finds that some people just want privacy.
- Despite its reputation as a tool for criminals, only a small percentage of Tor users were actually going to the dark web.
- The rate was higher in free countries and lower in countries with censored internet access.
- The findings are controversial, and may be limited by their methodology to be general assumptions.