[patio11]

At the Freelancers Union, Sara Horowitz is pushing for a new kind of unemployment protection fund that would cover the self-employed by helping them put away money that they could draw on in times of need.

We could call it "savings". Then, in lean times, workers could tap their "savings" to make up for temporary shortfalls in income. To minimize the cost of administration for this innovative unemployment protection fund, it could be outsourced to private financial services organizations, hereafter called "banks", which would allow workers to access their "savings" on completion of a routine procedure, up to the limit of "savings" they had accumulated.

"Savings" could be paid for by charging more on an hourly basis than full time employees received in salary for comparable work.

[mynameishere]

Well, you're missing the point of insurance. A hundred people might need to collectively save a million dollars, but acting independently they would need 10 million. With the self-employed the tragedy of the commons would kick in mighty fast though.

[dualogy]

We could call it "credit", which the "banks" would offer out of their collective pool of customer "savings", not all of which need to be available to all "savers" at once.

[m_eiman]

Interesting concept, you might be onto something there.

Additionally, if you're "underemployed" to the extent of not being able to pay your bills, I'd say it's about time you got UN-employed and started looking for those unemployment perks.

[Raphael]

So how does one get away with charging more?

[jjs]

> So how does one get away with charging more?

Do it when the Cheap Police aren't looking.

[ahoyhere]

Since employed people have it, why shouldn't self-employed?

Remember, the goal of society is not to punish the grasshopper and feel great and virtuous because you're an ant. The goal is to help every grasshopper become an ant, even if it's not in their nature. Because when grasshoppers starve, ants lose out too.

Research shows that, among employed people, contributions to private retirement funds soar if the employer sets a default of 5% rather than shifting the burden to the employee of changing it from a baseline of 0%. People are just lazy. They don't opt in, but if you set it up for them, they don't opt out, either.

So this kind of movement among employers wrt 401ks is good for everyone.

Why not something for self-employed people?

It is hard in the US to be self-employed and resist the urge to live month-to-month, to put aside enough money for your taxes and for savings, and so on. There's nothing in the system to make it easier. The whole system is biased against self-employed and small entrepreneurs. (Don't talk to me about tax breaks, this is about institutionally supported behaviors.)

Americans have practically been trained from birth to be loose with money. There are govt incentives to go into debt -- by offering cheap money on loan to everybody who wants it, and of course easy credit has inflated the cost of goods and services. That all's what has kept the insane growth curve going, until now.

You can't live in a society that tells people "Spend for the good of your country!" and then turn your back on them in disgust when they behave just as they were taught.

Creating systems that help people be virtuous is a lot better than finger-wagging and feeling self-righteous.

[roc]

I've wondered the same for -ages-.

Why isn't there a law that -requires- any employer who provides insurance to contribute the dollar amount they would put toward an employee's plan to -any- private plan the employee wishes? Currently you need a fairly generous employer to even offer you a cash 'bonus' for waiving company insurance and buying private. And even then, it's very rarely comparable to what the company would have paid on your behalf to the group plan.

And why are 401ks tied to employers? Why can't employees choose which 401k provider they wish, regardless of what 'group plan' their employer might prefer? Or an easier alternative: why aren't employers required to offer matching into a private IRA if an employee waives 401k matching?

We champion the power of markets in the US, but then we have all these communal, zero-choice, easily-corrupted corners (particularly surrounding employment) that are a huge drag on those same markets. 'Private' insurance and retirement in the US are tantamount to a 'company store'.

Allowing the self-employed to pay unemployment insurance taxes is the same sort of thing in my mind. Why -not-? If they want to pay in what any employer would and their claims to benefits are the same as any other employee, why the hell not?

[ahoyhere]

Because we don't have a democratic capitalist system, we have a corporatist oligopoly.

The federal govt was set up to be toothless -- and consequently lacking in responsibility -- on purpose. Then it overstepped those bounds in terms of power, but never in terms of responsibility.

So you have a rate of federal income tax that is double, triple, or more that of your resident state, while getting almost nothing in return in the form of social services. (Medicare, Social Security/FICA are on top of the base federal income tax.)

States will have a very hard time raising taxes because the fed govt already takes so much from their citizens, and tehy cannot overrule the federal govt tax rate.

And, states are too interconnected by trade to be self-sufficient unto themselves, even with higher taxes. And the federal govt controls states without helping much - and what aid they give comes with control issues.

The govt of the USA simply doesn't work in this century. It needs to be either more state-oriented, or more federalist, not this unholy half-breed.

Consider the following:

I'm an American citizen living abroad permanently. I have to pay federal income taxes even though I never intend to return.

And better yet, I can't even vote in any election. Because I won't declare myself a resident of a state (and subject to those income taxes).

Without paying state income tax, I cannot vote in the federal elections.

Tell me that's not fucked up.

(And no, I can't just declare myself a resident of a state that has no income tax. That doesn't work.)

[menloparkbum]

I can't just declare myself a resident of a state that has no income tax. That doesn't work

I know many expats, my cousin and sister included, who establish residency in South Dakota for this purpose. The state only requires a one night stay and a mailing address to establish residency. Once you stay overnight you can get a driver's license which I think is good for 10 years. Many retired people who live in Mexico do this and there are mail forwarding agencies who will act as your mailing address for a fee.

It might be a pain in the ass for people who grew up in more populated areas, but I'm from the high plains so it wasn't such a radical idea. Some of my relatives actually live, or have lived in SD. There may be other states with similarly lax residency requirements.

edit: here's more info from a quick google search: http://www.roamingtimes.com/blog/south-dakota-residency.htm

note that it says "a handful of states make it easy to establish residency." i tried another google search to find a list of the residency requirements of each state. i found this:

http://www.infoplease.com/ipa/A0781452.html

From a cursory look at this list I THINK that SD is the only state with no state income tax and very relaxed residency requirements.

[ahoyhere]

Thanks a lot for the info!

I never looked into SD... just the other ones. (I didn't even know SD had no income tax.) That might be an option for me on my next trip.

(Course, none of the "experts" I spoke to brought this up, either. Jerks. :)

[mlinsey]

(And no, I can't just declare myself a resident of a state that has no income tax. That doesn't work.)

Curious, why doesn't this work? It was my understanding that was a reason why many folks living abroad, especially military personnel, declared residence in Florida.

[asciilifeform]

If you don't intend to return, why pay the tax?

[ahoyhere]

I mean I never intend to move back to the US. I like to visit.

And I'd like to not get arrested at the border and forcibly repatriated, if you get my drift.

[reyu]

Extradition is kind of a pain too.

[chollida1]

> Since employed people have it, why shouldn't self-employed?

Often the problem comes down to fraud. The reason self employed people in Canada can't get EI( our unemployment insurance) is that it's too easy to lay your self off.

For these same reasons, family members can't be layed off from a company.

If we did have this EI for self employed people how would we differentiate between someone who just wants the summer off vs someone who legitimately has no clients.

Another problem is what happens when someone realizes that they can make more money on EI than trying to tough it out with their remaining clients and trying to rebuild their business?

If each case has to be reviewed by an actual person this could take weeks at a time and would probably eat all of the money put into the pot for this new style of EI.