Here is my list (incomplete) compiled from previous blogs on how to restore the American dream.
1. Institute a flat tax of 20 percent. Tax all income - no exceptions. Everyone pays - no exceptions and no deductions. The poor will get subsidies from other programs but paying taxes is the price of citizenship. All pay then all will realize the cost of government.
2. Abolish the capital gains tax.
3. Abolish the corporate income tax.
4. Limit government spending to 20 percent of the previous year's GDP. The president can ask for a one year exemption in the case of a national emergency which must be approved by a super majority vote in both houses of congress.
5. Abolish discretionary federal reserve monetary policy which leads to irresponsible tinkering by the Fed. Impose Friedman's monetary rule of allowing the money supply to grow at the long run GDP growth each year - removing uncertainty.
6. Defined benefit plans bankrupted companies which is why retirement plans are now defined contribution plans (401k). Abolish public sector defined benefit plans which are bankrupting municipalities and states and replace them with defined contribution plans.
7. Repeal health care "reform". I have given market solutions that will work including those designed for pre-existing conditions.
8. Include the cost of all government regulations in the 20 percent of GDP rule.
9. Abolish the departments of education, energy, and agriculture (for starts) and allocate their funding (where appropriate) to the states via block grants.
10. Set federal worker pay scales (including benefits) to private sector pay. Federal pay is much greater because it is not subject to market forces and discipline.
11. Put all tariffs, quotas and subsidies on a periodic review cycle with sunset provisions. If they are to be continued then the congress would need to debate them, pass them and the president sign them every couple of years or so.
12. Encourage and reward risk taking. Ensure that all programs provide positive incentives to be productive rather than negative ones that discourage work.
Happy Birthday Frederic Bastiat
8 years ago
4 comments:
Professor Black, I enjoyed taking your class at UT, and I also enjoy reading your blog.
- Graduated May 2008
I would like to address your idea of the Flat Tax. I have two issues with it. First, I believe that a progressive tax is fair way. 20% of a $20,000 income is drastically more affective to an individual than 20% of a $1,000,000 income. Let's be honest, how much is the latter person going to change his/her lifestyle in comparison the first due 20% of their income taxed? Secondly, and most importantly, it still doesnt really tackle the main issue of an extraordinary amount of citizens/non-citizens who pay NO income tax. If fairness is the issue, wouldn't you rather make sure that EVERYONE pays even if it means you may have to increase your own taxes? That is why I would suggest a National Sales Tax. It's not ideal but it is something that you can't get around or decide not to pay (especially for illegal immigrants). What are your thoughts?
Michael Colonnese 09'
Michael, A flat tax taxes everyone so no one avoids paying income taxes. That to me is the definition of "fair". As I have stated, the poor would get what they pay back in all the government welfare programs but not via the tax code. Thanks for the comment.
Adam, It is good hearing from you. Hope all is well. Keep reading and keep commenting.
I understand that the flat tax taxes everyone, the same way the progressive tax taxes everyone. But what do you do to those who don't pay taxes at all? If only about half of the country pays taxes, then regardless of whether it's a flat or progressive tax, the remainder still are not contributing. So then how do we make it "fair" if not everyone pays?
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