Submitted by Steve Selengut
| RSS Feed
| Add Comment
| Bookmark Me!
More Jobs, Fewer and Lower Taxes - The KISS Principle
Over the past 30 years Federal Tax receipts (Corporate, Personal, Estate, Excise, Gift, Social Security, Medicare, Medicaid, et al) have averaged less than 20% of Gross Domestic Product (GDP). Read that again, and don't think for a minute that it's not a large number.
But it's not nearly large enough to pay the bills, reduce the national debt, grow the economy, and come to the aid of all of the people in the world who need us. Why, because nearly half of us (some legally, some not so) pay little or no federal income taxes at all--- and because our elected representatives have no financial management skills.
The only taxes that always get paid are those that reduce the amount of spending money in our pockets and which raise the cost of the goods and services we purchase --- thus retarding economic growth.
There is no doubt that a Federal Sales Tax on consumption by final consumers would produce more revenue than all of the other taxes combined --- but how much, and is it OK to single out things like cigarettes and gas guzzlers for extra taxes?
We need to give it a try, and there would be added benefits: (a) we would be collecting taxes from all of those folk who earn incomes that are just not reported at all, (b) the products we try to sell in world markets would be more competitive, and (c) all of us would have more money to spend on stuff that could actually become lower in price.
There are no purely economic problems with making the shift to a consumption tax --- just political ones. The legislation has been "on the hill", and summarily ignored for decades. We need to apply cool economic sense to the elimination of the Internal Revenue Code and the Social Security Ponzi scheme.
First KISS: Create Jobs Right Now
Create jobs immediately by eliminating the corporate income tax (and all other fees, local taxes, assessments, ad nauseum) for any corporation that adds 10% to its permanent workforce and/or 20% to its total workforce.
Corporations are not the bad guys, it's the over-paid greedy dogs at the top that need to be leashed and disciplined by their employers --- the shareholders, theoretically anyway. How about this for a start: all salaries above $1 million are paid in the form of dividends on common stock; all bonuses are "divvied up" dollar for dollar between all employees, full time or part time; there are no stock option programs.
Offset the Federal tax revenue loss by outlawing all forms of "earmarks" on any legislation ever; limiting all lobbying efforts to legitimate industry, employee, and public interest associations; and by enacting a 2% Federal Sales Tax on everything purchased by final consumers--- no exceptions, period.
Create "Green Energy Bonds", sold to investors with full federal guarantees, and used to help start up a Green Energy Investment Bank chartered only to provide low interest loans for developmental private sector projects. While we're at it, bring back the distinctions between, commercial banks, savings and loans, and investment banks.
Second KISS: Lower and Eliminate Taxes
Lower taxes immediately by phasing in a mandated private SSRIA program for all workers, private and public, from 1st day mailroom clerk to President of the US of A. Reduce Social Security Taxes to 3% over a five-year period and use that money to create a deferred, fixed-income, life-annuity for every worker.
Seventy percent of SSRIA investments would include US Government Bonds, state and local Municipal Securities, with the balance managed in non-derivative, individual equity investments regarded as Investment Grade Value Stocks. No investment income of any kind would ever be taxable by any government.
SSRIAs would be created and managed by fixed-annuity experienced private sector companies, and the annuity contracts would "travel" with the employee until retirement. All SSRIAs would have identical provisions, no sales commissions or marketing expenses, and slightly below industry level investment management fees.
Employees would be assigned randomly to providor companies, and each contract would include "return of premium" term life insurance until annuitized. Add an additional 3% to the Federal Sales Tax to replace the reduction in Federal tax revenue.
Third KISS: Produce Sustainable Economic Growth
Now that we've become more competitive in world markets, assured retirement benefits for all workers, and helped to save the planet, it's time to provide equal opportunity for all of us to attain the American Dream without big brother's assistance.
Replace the personal income tax side of the Internal Revenue Code with a 5% flat tax and an additional 10% sales tax --- maybe even a mandated 2% insurance premium for universal basic medical coverage. But at the end of the process, all reported income pays a 5% income tax --- no exclusions, deductions, adjustments, minimums, period, and done!
Every purchase for final consumption generates a 15% contribution to support what we hope will become a smaller, less corrupt, more creative group of term-limited politicians. And, once the budget becomes balanced, further tax reductions will ensue.
Hey, write your congressperson, make some noise, Tweet, Digg, whatever. Now this is capital "c" change we can deal with --- or at least dream about.
Join my Linked In Network Join my private mailing list