We are suffering under the burden of too many taxes, too many surcharges, too many ways of the government reaching into our pockets and taking our money. We are suffering in a society where the rich do not pay enough because they can legal work out of it, the lower income do not pay as they have no money to give, yet the backs of the working middle class (as defined by each locality since money in the Midwest goes much further than money in say Boston or NY as an example).
The solution is one of Timing. When the economy went south in 2008, Arizona almost immediately put legislation through that would increase taxes for the next 3 years to get them back where they needed to be. My point is everyone in Arizona was put in a position to pay a little more of their share TEMPORARILY to get out of a bad spot. Yes- they shouldn’t have been in that spot to begin with, but I do not look at life through perfect “hindsight” adjusted goggles- I look at life through a series of lenses which take philosophy, reality, do-ability, and fairness all into consideration. What Arizona did was confront the reality they faced quickly (getting ahead of the issue), fairly (all paid into it), within their agreed philosophy and obviously do-able from the citizens end as they elected this as the best course of action.
The Timing and Solution is best looked at from a broad scope and then dialed back into specifics. Today and going forward for about 18 years- the US Government will be put under tremendous financial pressure and pain as the baby-boomers retire and start getting all the social services they are “entitled” to as currently written. This will cost us Trillions we do not have. Period. Anyone trying to argue otherwise is silly. This needs to be dealt with now. Anyone trying to argue otherwise is even sillier. This will not go away, nor is it debatable. That is the silliest thought under the sun. Hope is not a solution in itself.
The Solution will be one that combines a current reality based combination of tax changes and deep spending cuts(defined by me as spending less than last year, not less than the anticipated increase which is the current Gov’t game) with a long term picture of where to end up. To put it differently, IF you offered the US taxpayer a fair and balanced approach, giving them an increase now for a definitive reduction and simplification in say 10-15 years- they would accept it. Once the Boomers are into and mostly passed their drawdown of services, then the burden becomes much more manageable. BUT that cannot mean go back to spending widely or blindly, it would need to be kept in check while relieving the saddle of tax burdens, both the increase implemented temporarily and the multitude of various taxes now that punish the middle class. Reduce, simplify, eliminate becomes the mantra of our future when it comes to the revenue side of the equation.
Idea- Why not make a deal with all the overseas profits by US businesses? The number being tossed around is about 2 Trillion dollars in money looking to be repatriated back to the US. Instead of taxing those corporations 35% to bring it home- why not make it 17.5%? Take 10% in true taxes, 5% as a “start up fee” send directly to the SBA, and earmark 2.5% to be spent by a mandated date on large capital expenditures by their own company above and beyond what they currently spend? This would inject roughly 200 Billion dollars as true tax money, provide 100 Billion in new business start up money (to drive small purchases and employment), and provide 50 Billion in additional spending on large Cap Ex.
Idea- Why not promote the Treasury SmartExchange program (buying of US Savings Bonds directly from the Treasury) more than now? Direct investment into future of America, gets a better return than on buying 10 year notes, electronically done and managed. IF you believe in America and believe in our future, why wouldn’t you? How about take this current program to a new level and make it pre-tax to a certain level? But knowing about that program is critical. It is completely undersold to the American taxpayer because there is not vested interest in talking about it.
And last time I looked- money here in our economy is better than money outside our country in someone else’s economy. Then repeat this process the year after only for those who participate this year, and only for those companies who maintain or add US jobs year-over-year.