by Chris Madsen
I decided I should to write a second piece on the Basic Allowance for Living (BAL). If you haven’t already read the first piece you may want to now so the following makes more sense. The whole point of that first article was people need to be paid AT LEAST enough to live on. Which I honestly, personally, don’t think that is really that progressive of an idea.
The true way to make a more democratic socialist style government work (AND THRIVE) is to have an allowable tax built into even a Basic Allowance for Living.
For example if we want people to earn a BAL plus 20% (ability to pay a 20% tax)
Then the BAL needs 25% added to it recapture a total of 20% (due to tax effect). For example if $30,000/year is determined to be the Basic Allowance for Living, then in order for that person to be able to pay a 20% tax the numbers look like the following:
The employee pay needs to be
$30,000*1.25= $37,500 gross
$37,500*.2= $7,500 tax (20% tax)
$30,000 net (BAL) to employee
This allows even those earning at a Basic Allowance for Living to be able to contribute in taxes. This allows for a broader tax base and this tax money could be partially used to fund a single payer national healthcare plan like Medicare for All. I like this idea better because if people are being taxed they are more likely to participate in politics and want legitimate representation in the government.
If we assume 40 hours per week and a total of 50 working weeks a year that is 2000 hours worked a year. Then that then leaves 2 weeks or 80 hours of paid vacation a year. At a yearly BAL of $30,000 at 2000 hours worked comes out to $15/hr worked.
If that employee wants to earn a BAL plus 20% then he/she needs to be earning $15 x 1.25= or $18.75/hr to be able to pay a 20% tax and net the $15/hr or $30,000/year Basic Allowance for Living. Under this type of system a full time person earns 2 weeks of paid vacation a year that means for every 25 hours someone works they earn 1 hour of paid time off. That can be done in one of two ways. Employers can set aside money to pay for time off when it does comes or even the employee could help contribute to the 4% tax (80 hours benefit / 2000 worked hours = .04) that will then pay the employee when they request time off. I like the idea of the tax because then even if someone switches jobs they still could have vacation time accrued and payable to them from the government set aside in a fund. We also need to encourage many Americans to take more time off and not work much to reduce stress.
That would be a great step for labor in The United States of America if people had an actual right to paid time off (even if they had to contribute some out of their wage towards it). However, if I’m going to address paid time off it also seems like I should address sick leave, and other paid time off like maternity or paternity leave. Another week of sick pay or approved leave could be added for another 2% (40 hour benefit / 2000 worked hours = .02). That would be a total of 6%. (4% for 80 hours of paid vacation benefit a year, and 2% for 40 hours of paid sick time or approved leave benefit). What is probably the fairest thing to do is to split the total cost down the middle and make employees and employers each pay 3% to fund this type of program. Employers could still offer even more vacation time or sick leave to employees or individual states could also mandate more benefits, but the purpose of this is to ensure every working person has at least some access to paid time off and paid sick time or paid leave.
Chris Madsen is a writer and activist based in the great state of Hawaii. He frequently writes from the unique perspective of his Pacific home. His opinions are his own.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.