What is the Freedom Dividend?
The Freedom Dividend is a return on our invested tax dollars, paid as a dividend, similar to a negative income tax. It will help buffer the effects of job loss and automation, providing an income floor to all Americans, as citizens of the wealthiest and most powerful nation in history!
As Americans, we have invested our tax dollars over many generations in roads, bridges, the USPS, and even the internet, yet companies like Amazon and Netflix who reap billions in profits using those investments pay zero in federal taxes. The Freedom Dividend is how we ensure they are paying their fair share, with our invested tax dollars returned to us as a dividend, similar to a negative income tax.
The Freedom Dividend will reduce government bureaucracy, empower people to make their own decisions, change lives, and save lives. Despite living in one of the richest countries in the history of the world, millions of Americans still can’t cover their basic needs. This dividend will not only lift tens of millions out of poverty, but will also increase economic dynamism and allow for the creation of more local, small businesses. More money in people’s pockets will free Americans to invest in themselves through education and entrepreneurship. The data backs this up. Where similar dividend programs have been implemented they have been shown to improve mental health, reduce crime and abortion rates, all while encouraging economic activity.
Why Do We Need This Now?
1 out of 3 American workers risk losing their jobs in the next 12 years due to new technologies.
We’ve already lost 4 million manufacturing jobs in the last decade due to robots. 30% of stores and malls are closing because of Amazon. The next jobs to be automated away are cashiers, office clerks, and truck drivers.
This concept had support from Martin Luther King Jr, founding father Thomas Paine, and Milton Friedman. President Nixon tried to get it passed during his presidency but was stalled by the Sentate Democrats, and over 1,200 economists signed a letter saying it would be good for our country. The idea is pretty straightforward: every American adult receives $1,000/month, unconditionally and untaxed. This would push people past the poverty line, improve the quality of life for lower-to-middle class Americans, and it would greatly benefit our economy. A variation of this is already in place in Alaska, where citizens have been getting a yearly dividend, funded by oil, for the past 40 years.
How Would We Pay For It?
A VAT tax is a Value-Added Tax. It's a consumption tax applied at each stage of the supply chain, which prevents businesses from finding loopholes around it. 160 of 193 countries have a VAT tax, including every developed nation—except ours. A 10% VAT tax would be half that of Europe's.
The Freedom Dividend is a mechanism to capture the gains from automation, and distribute a slice of it back to the people who are being hurt by it, as well as provide a stable income floor that no American adult will fall under.
We could also use a carbon tax to fund part of it, ensuring that big businesses using our natural resources are giving back to the American People.
Will the Freedom Dividend be taxed as income?
No, the Freedom Dividend won’t be taxed.
Does it Replace Other Payments or Benefits?
People who receive Social Security, disability payments, government pensions, or VA benefits will continue to receive those benefits in addition to the Freedom Dividend. Participants in other federal benefit programs can keep those benefits or convert to receiving the no-reporting-required Freedom Dividend, whichever provides them with a greater benefit.
Frequently Asked Questions About the Freedom Dividend
“How can we afford the Freedom Dividend?”
How can we NOT afford it? The social programs that we need to respond to the crises caused by poverty, depression, and lack of financial security are enormous. These have pushed our society and economy to the breaking point under the strain of the Covid-19 pandemic. From providing a path away from traditional welfare for those in need, to reducing the anxiety and financial hardship that causes pain, bankruptcy, and even death in middle class families, paying for the Freedom Dividend is far cheaper than paying for all the programs that increase the size and overreach of our government. An excellent resource to see how the Freedom Dividend will be paid for both by incoming revenue and by savings in current bureaucratic programs, visit https://freedom-dividend.com/
“Isn’t that Socialism, or worse yet, Communism?”
The Freedom Dividend is not socialism. In fact, it is a deeply capitalist idea supported by Thomas Paine, Milton Friedman, and even Richard Nixon. The idea is that a basic income pushes people past the poverty line. It increases the purchasing power of Americans, and the resulting increased demand for goods and services stimulates local economies and creates jobs to help offset job loss from automation. The Freedom Dividend gives bargaining power to workers because Americans can be more selective about working conditions and wages when they have this stable floor of income to stand on. Greg Mankiw, who is known in academia for his work on New Keynesian economics (extremely far away from being a socialist), likes the idea of Andrew Yang’s Freedom Dividend.
The bottom line is that without a robust capitalist economy, we couldn’t afford the Freedom Dividend, so you can count on Blair to make sure that nothing happens to our economic system.
“Why don’t we just raise the minimum wage instead of handing money to people who are too lazy to work more?”
The minimum wage in Tennessee, and in a number of other states, is about half the “living wage.” The Living Wage is calculated on local average costs for housing, food, and transportation. If working a 40 hour week only gives you half the income you need to survive, sure we can tell people to work 80 hours a week, but what is the cost of that? Poor health, crumbling family units, and children who may be without supervision because their parents can’t be around. Even if we doubled the minimum wage, that would only help some people, while we ALL contribute to the system that would fund the Freedom Dividend. We’ve seen how resentful one portion of the population can become when someone else gets benefits off the hard work of others. Why not make it universal? For some, this would be the difference between having a roof over their head, or being homeless. For others, this might be the ability to go to college without taking out costly student loans. And, for yet another, it might be the ability to start a business or buy a home. The great thing about the Freedom Dividend is that it doesn’t pit Americans against each other.
“Won’t people get lazy and stop working?”
The Freedom Dividend shouldn’t be enough to enable people to just stay home, but it should be enough that with the usual amount of hard work PLUS the dividend, more opportunity will be open to everybody. How many Americans live paycheck to paycheck? They are one car or home repair away from financial ruin. How many Americans dream of owning a small business or start a business from home? These additional resources can help make that dream a reality, and this boost to American entrepreneurship will be a boon to communities.
“Why should rich people get the same dividend as someone who is poor?”
The Freedom Dividend is designed to be a right of citizenship. While some people may not need the Freedom Dividend, they can choose not to take it, or they can choose to donate it to any charitable organization. Whether they spend more money on big ticket items that then put money back into the funding of the Dividend, or they choose to donate it to organizations that help advocate for any number of charitable interests, that money will end up back in the economy.
Those who are just scraping by will use the Dividend for basic needs. This may mean purchases at local stores, or it may mean paying off bills like student loans, healthcare bills, or making basic repairs to their homes. The Dividend may mean that someone who is making minimum wage can afford a training course to be certified for a higher paying job. The benefits and options are limitless.
“What is the primary source of funding for the Freedom Dividend?”
The combination of a VAT tax and the reduction of costs in highly governmentally-centered systems will fund the Freedom Dividend. You can read more about both at https://freedom-dividend.com/revenue/. If a tax sounds scary, consider this. If taxes on purchases of some items cost 10% more, BUT you are getting $1000 in a month, you would have to buy almost $10,000 worth of products subject to the VAT tax in order to zero out of your Freedom Dividend. For most Americans, that would never happen except for a big purchase like a car that only comes about every few years. For the wealthiest Americans, however, they are the most likely to actually spend that amount, but they would still be benefiting from the Dividend and could feel good about their purchase, knowing that the taxes they paid are refueling the benefit for millions of other Americans.
