Tax Reform? Tax Reform? Tax Reform?...
Just like me, you probably have heard this phrase A LOT lately, since it is the politicians way of burying the Truth- our Government needs to raise money BUT no one wants their name stamped next to the words TAX HIKE.. Cowards they may be, it doesn't get us away from an ugly Truth- we need the money, and we need to curb spending in a huge way.
The way I think of it to keep it in perspective is this- we raised a couple Billion more in revenue than a few years ago- but we are spending 25% of GDP vs the normal 18-20% range... Taxes are a very small piece, SPENDING control and elimination is the Key to the Mint.
But in the effort of politics and trying to make Lemonade out of the Fiscal Lemons we have grown- we should reform the tax code in a few meaningful ways. So here is MY recommendation and the thought behind it..
*Make Bush Tax Cuts Permanent- provides certainty
*Uncap Social Security- solves "wealthy tax" debate in a meaningful way by getting funds to SS only (drop rate to offset this and make net neutral to people under 250K
*Reduce SS tax rate to 5% (approx)- shifts burden to higher brackets and reliefs pressure on lower income levels and businesses, would also allow more taxable income at lower levels
*Repatriation Tax- drop it from 35% to 15%- gets off shore money into America, raises some revenue, small corp tax shift- as long as company keeps hiring in domestic US
*Cap deductions at $45K, slowly raise that over time to $50K- gets money now AND provides more temporary gain (10 yr)
*Reduce Corp Tax on Manufacturing to 10% IF they continue hiring in domestic US
(We need to get the effective tax rate to be higher, while being able to sell it politically)
THAT is my best shot at Tax Reform- But remember SPENDING is where the big dollars are and that is COMING SOON... AND while we are at it, we need to spend EFFICIENTLY.
WHAT do you think of Tax Reform Plan?
What would you cut in Government if it was your choice?