Economic News

Facebook Co-Founder Suggests 50% Tax for Wealthy, $500 Pay Out for Poor

In recent years, thanks in part to the campaigns of Senator Bernie Sanders and others, income inequality has become a major talking point in American politics and economics. As result many have offered their thoughts on what can be done to shrink the earnings gap between the top 1% and the other 99%. Now Facebook co-founder Chris Hughes is proposing an idea of his own to provide low-income earners with some needed cash.

As CNBC reports, Hughes is proposing that the U.S. extend a $500 per month tax credit to any worker making less than $50,000. By his estimates such a plan would cost around $290 billion a year. However, to cover that expense, Hughes is also touting a 50% income tax and capital gains tax for those earning more than $250,000 a year — notably up from the current 35% income tax on those making upwards of $200,000.

Speaking to what he sees as a need for his plan, the former Facebook spokesperson, Obama campaign strategist, and author of Fair Shot: Rethinking Inequality and How We Earn said, “Income inequality in our country has not been this bad since the Great Depression. And even though we’re reading the headlines that unemployment is at 3.9 percent and the stock market is at record highs, what’s actually happening is that the median incomes in our country haven’t budged in nearly 40 years.” He also acknowledged the success and wealth he’s seen, adding, “At the same time stories like mine create an illusion of economic opportunity.” In regards to how he arrived at the $500 a month figure, Hughes said, “That’s not enough money to live on. That’s not enough money to put up your feet and, like, watch video games — the fear of a lot of folks out there. But it is a massive amount of money in the lives of many working people in our country.”

Hughes plan, while perhaps similar on the surface, actually stands in contrast to the idea of universal basic income, which has been discussed by the likes of Mark Zuckerberg and President Barack Obama. In fact Hughes argues that following the UBI strategy of providing every American with a set payout is “infeasible in America today.” Instead he called changing the tax code — and removing recently-passed tax cuts for corporations — “the most urgent thing we can do.”

There’s no question that income inequality and ideas like UBI will continue to be talked about in future election cycles. Moreover, with an influx of technologies and automation, many have argued that the need for some major reforms is coming to a head. Still it’s hard to say whether a plan like that pitched by Hughes could really gain much traction on the political stage. In any case it will likely be a long while before these types of ideas are truly explored and/or implemented in any meaningful way.

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