As the Congressional “Super-Committee” grinds to a probable
stalemate, perhaps there is a much simpler way to accomplish the primary goal
without adding extra pressure on the already fragile economy. I won’t get into
what I feel is the role that pure politics has played in getting the U.S. to
this point, but given the dysfunction taking place in Washington, I have been
concerned about the economy since November 2008.
However, it seems to be a given that the U.S. is no longer in a financial position to offer meaningful or sufficient stimuli even if it could be successfully passed in Congress-which is highly unlikely given the mood and composition of Congress.
However, given that SOMETHING must be done or financial ruin could be the
resulting consequence, maybe a simpler solution is the answer. Adding to the
fact that neither party could claim the below as their own idea, maybe as a
truly non-partisan solution, it would be hated by all, but preferable than any of the alternatives.
- In order to reduce the deficit effectively, the amount of the current deficit should be segregated from the ongoing budget and attacked separately. Placing a one-penny-per-dollar “transaction”, “War on Deficit” tax, whatever you want to call it, on all goods and services for the sole purpose of reducing the deficit, would both give the super-committee cover to avoid having draconian across-the-board budget cuts, and take the focus off of the debt so that meaningful jobs bills could considered. To be meaningful to the task, it would have to be written into the law that it can be used only for debt reduction on the balance of the deficit as of a static point in time; preferably September 30, 2011, the end of fiscal year 2011. It should be irrovacably mandated that the funds are be used for anything else the sole pupose of reducing outstanding debt as of September 30, 2011. Even at today’s extremely low GDP of $15 trillion, the deficit reduction tax would reduce the deficit at $150 billion per year….the exact mandate for the super committee. As GDP increases, so too would the rate of deficit reduction increase. No exceptions, no exemptions. Services currently pay no sales tax but they would be subject to the “transaction” tax. It’s also easily implementable, as all but 5 states are already set up for collecting and remitting sales taxes. This would also mute any “tax and spend” argument because it could only be used for deficit reduction, not new spending. despite the negative effect on lower-income payers, should the super-committee’s plan fail, the reduction in lower-income benefits would be much more severe. By expanding the tax base to encompass all goods and services, a huge faction in the country would be contributing to the costs of maintaining government services. This faction includes, but is not limited to: rich, poor, criminals, non-citizens, even prisoners who currently purchase items from correctional commisaries. It would virtually assure that every person in the country is contributing to the debt without placing an impossible burden on any one group.
- End Bush-era tax cuts for individuals making net income of $1million or more (single) or $1.5million or more (married). There are over 5 million millionaires in the U.S. and over 400 billionaires. There is no empirical or statistical data that supports the myth that raising individual taxes on these two categories of income earners will adversely affect job growth by a material amount.
- Lower the corporate tax rate to 15% for domestic corporations provided they headquarter and hold their patents in the U.S. There IS statistical and empirical data that has proven that higher corporate tax rates adversely affect job sustainability and job growth. Ireland has a corporate tax rate of 12.5%, reasonable accommodations and communication infrastructure to support
major corporate headquarters as opposed to the U.S. rate of 35%.
- To name a few, WPP Advertising conglomerate and its 700 corporate employees and their families moved to Ireland in 2007. Shire Pharmaceutical, and Accenture Consulting(formerly of Big Five Accounting Firm Arthur Anderson, LLP).
- Even more have moved to Switzerland, whose corporate tax rate is currently between 15%-16%.TransOcean, Weatherford, Cisco, SunJava, Google, etc. and their families and jobs and consumerism go with them. Several hundred thousand jobs among just these five companies. “Every other government in the world has realized that the U.S. has it wrong. They’re saying, ‘I’m going to have lower taxes, period’. That’s what you see across all of western Europe, that’s what you see in Asia in the developed countries,” Cisco CEO John Chambers told Leslie Stahl of
- Japan lowered their corporate tax rate to 20% last April making the U.S. tax rate the highest in the westernized world. To corporations it matters because of the huge economy of scale.
- Reduce the employer share of the SS and Medicare tax to match the employee portion that was lowered from 6.2% to 4.2% for 2011, but remove the current employee cap of $106,800 in wages having SS/Medicare withheld. LEAVE the employer MATCH at $106,800 including self-employment tax. As employee wages and Wall Street bonuses exceed $106,800 they will continue to be assessed SS/Medicare without a cap.
- End all tax subsidies to existing businesses. If they cannot
make it on their own, capitalism mores state that maybe they shouldn’t be in
business. The U.S. currently pays 75% of BP/Shell/Chevron, etc. rent to
TransOcean ($4 billion per year) and receives no breaks oil prices, etc. Ethanol actually drives up costs of food by absorbing 25% of the U.S corn production for an energy source that reduces the efficiency of the gasoline we use and subsequently reduces the average miles per gallon for every vehicle that uses unleaded gasoline in the country. Stop this insane madness; end subsidies. Let each company sink or swim on its own.
- The U.S. has boots on the ground in 70% of the countries on the planet. Actual figures are not readily available as to the enormous cost of this empire-building, but ifIraq/Afghanistan is costing $2billion a week it doesn’t take a math whiz to
extrapolate the costs with a few variables.
- This is not tax policy, but worth looking at just the same. The U.S.’s primary supplier of oil is Canada, which they mine at will.They get the bulk of the oil that they sell to us from oil shale. The exact same oil shale that the U.S. has in North Dakota, South Dakota, Montana, Wyoming, Iowa and Idaho. There ought to be some way that those states, and the country as a whole, could benefit from supplying the bulk of our own oil without upsetting constitutional or capitalistic purists.
- Allow Medicare to negotiate drug prices just like Wal-Mart, CVS, etc., can do now. Medicare is the largest single payer of medicines (and medicine is the largest single expense category for Medicare) in the world and it cannot even NEGOTIATE with big pharma. That’s patently insane.
- Repeal the anti-trust exemptions for health insurance companies. Absent the public option, and despite Republican declarations that inter-state shopping for insurance would drive prices down, as long as the anti-trust exemption exists for them, there is no incentive to make health insurance competitive between states or otherwise.