Not by Bread Alone
Most social and economic evils we face exist because tax policy punishes good behavior and rewards bad behavior.
We should shift taxes from products of human labor to unearned wealth, and tax pollution and the consumption of natural resources. At the state and local level, sales taxes and property taxes on buildings and improvements should be shifted to a property tax on the unimproved value of the site. At the federal level, severance taxes should be imposed on petroleum and other natural resources (the source of Alaska's Permanent Fund), and the revenues should be offset by increasing the personal income tax exemption. All corporate welfare should be eliminated, and the savings likewise put into bottom-up income tax cuts.
Such policies would reward labor, and discourage pollution and waste by including the real social cost of goods in their price. Incentives would come from the market, not bureaucrats. An increased personal exemption would leave workers more of their wages. Local tax shifts onto land value would cause explosive economic growth, and reduce housing costs and sprawl.
I didn't expect it to get anywhere (hoped, but didn't expect). But out of all those thousands of ideas, with a committee of "progressive" policy wonks sorting through them (and with Andy Stern's involvement), I expected at least that the winning ideas would involve some fundamental systemic changes.
To be fair, the first prize idea was concerned with the big picture, rather than simply tinkering around the edges. Peter Skidmore proposed a "resource tax" on pollution and fossil fuel consumption to promote sustainable energy technology.
Globalization of labor, production, and ideas and an industrial economy based on subsidized fossil fuels have set the stage for economic and social instability, continued outsourcing of jobs, and marginalized quality of life. We can create a new economy based on environmentally benign industries and energy.
Impose a “resource tax” on pollution, development, and fossil fuel to pay for development of renewable energy and environmental restoration. Promoting sustainable localized energy industries (solar, wind, hydro, tidal, biofuels) will provide reliable, clean homegrown energy, exportable technologies, and bring energy jobs home. Funding widespread environmental restoration will expand existing industries (farming, recreation, tourism, and commercial fisheries) that are dependent on ecological services and will foster research, design and technology industries.
I consider this a mixed bag. As I suggested in my own entry, I agree that so long as taxation exists at all, it should be on things that impose costs on society, as a way of getting rid of externalities. But using the revenue to subsidize market distortions in another direction, like subsidies to alternative energy, is a bad idea. If fossil fuels and nuclear power are heavily subsidized at present, the best way to promote alternative energy is simply to remove those subsidies. As for promoting "environmental restoration" and sustainable energy, if the full costs of energy and transportation (including liability for pollution) are internalized in the price, the market price system will take care of it. When prices internalize all the costs of bad behavior, good behavior will be a matter of self-interest.
But at least Skidmore had a vision for fundamental structural change. The runners up not only limited themselves to tinkering with small areas of policy, but also relied on increased statism as their sole method. Filippo Menczer, for example, proposed indexing the minimum wage to the inflation rate.
Worse, the other runner up, Leslie Hester, proposed a massive infusion of new state involvement in the education system:
The future of American workers in the global economy depends on the quality and equity of today's public education. From kindergarten to college, our public institutions represent the capacity of our society to provide adequate income, healthcare, and security for all Americans. In this light, the following three reforms will return public education to its original mandate:
1. Restructure public funding of schools to redirect local property taxes to a general state fund that is then equitably distributed among all schools on a per student basis. This measure would break the cycle of poverty endemic to those areas without a large property tax base.
2. Control tuition at public universities to better reflect the traditional statewide median income-to-cost of attendance ratio. This will provide all willing students the ability to receive a top-notch in-state education regardless of their families' economic status.
3. Increase teacher salaries to recruit and retain some of America's brightest. If we invest in high quality instruction, we give ourselves the best chance for an intelligent, entrepreneurial, and confident workforce.
Public education's "original mandate" was to process human resources into docile servants for both government and employer. Hester's first proposal, by shifting control of schools to a higher administrative level, will simply consolidate the hold of the educracy (professional administrators and products of the teachers' colleges) over local education, and make it even less responsible to local voters. The main reason for poor quality education is not a lack of funding, but the gang of nitwits in charge of it. Hester's solution is even more control by an even higher-salaried gang of nitwits. Her second proposal, by lowering the cost of post-secondary education, will simply promote further overproduction of scientific-technical personnel, and thus make them even cheaper for corporations which rely most heavily on this "resource." The effect will be not only to further subsidize the profits of high-tech industry, but to promote continued deskilling and upward shifting of control over the work process, from the shop floor to the salariat. And the best way to get "America's brightest" into teaching would be to break the power of the present educational establishment and its professional culture: specifically, burn down all the colleges of education and normal schools and start over.
So long as taxation exists at all, the most revolutionary and positive way of reforming it is through some sort of Geolibertarian tax shift (at the local level, eliminating all sales taxes on necessities, the personal property tax, and property taxes on buildings, and replacing them with increased tax on site-value), and through streamlining other taxes to eliminate differential tax breaks (in a revenue neutral way). The result of such policies would be an explosion of prosperity, from the bottom up for a change. And just searching the Sliced Bread archives for phrases like "land value," I found at least twenty such proposals from Georgists around the country. But the judges, unfortunately, preferred corporate liberalism and bureaucratic empowerment.