Hey Everybody, with Rep. Ryan's plan and the President announcing his plan. I thought I would propose my own plan to fiscal sanity. The Ernie plan couples liberal ideas with conservative ideas and none of these things will pass without the other attached to it, the goodies for both parties are only enforced if the others become law. Again, as fake president I veto any bill that only has one side of the equation.
- Conservative idea - Cut taxes for current tax brackets by 5% with the current top rate for those making over $379,000 at 30%. (Currently at 35%)
- Liberal idea - In order to get those tax cuts for the new American (upper) middle class add 3 more brackets to compensate for the new economic reality of those who have multi-million dollar salaries.
- 40% tax bracket for taxable income over $750,000
- 45% tax bracket for taxable income over $1,500,000
- 48.5% tax bracket for taxable income over $3,000,000
Now remember, a person who makes $3M pays the same amount taxes on their first $16,000 as the person who makes $16,000. So if a person made $3,000,001 a year, under the Ernie plan they would only pay a 48.5% rate on the $1 that they earned above the bracket.
Conservative idea - Strongly cut corporate taxes. I would cut the corporate rate from 35% to 15%.
Liberal idea - close all of the BS corporate loopholes and get rid of any tax subsidies and credits to those firms who are extremely healthy and making massive profits.
Crazy Ernie idea - tie a reduction in corporate taxes to either direct domestic hiring statistics (tailored to company size of course) or the percentage of domestic research & development investment by said corporation. "The more you invest in America, the more America will invest in you." Companies that show strong investment in domestic production and hiring could receive a corporate rate as low as 5%.
Primer for next idea, there are those who only make money off of stocks and bonds and such - these are called capital gains. Capital gains were taxed between 20 and 28% under Bill Clinton, with the Bush tax cuts they are now at 15%. Warren Buffett famously said "I pay less in taxes as a share of my income (15%) than my secretary (mix of 10-30%)."
Crazy Ernie idea - Capital gains tax for those with incomes under $100K will be 0%. After 100K, capital gains tax will be taxed at the person's marginal tax rate. For example, for 2011 Ernie was taxed at 10%, 15%, and 25%, but my marginal rate was something like 17.2% when all was said and done. So if I made more than 100K this year my capital gains tax would be 21.1% (It is currently 15%)
Lemme know what you think!
Hello world!
6 months ago
From Jason Sinclair:
ReplyDeleteAgain, for whatever reason, my Firefox will not allow me to comment on your blog. Sadness. So here is my response: I like the balance you attempt to strike with this. I still have a few comments, though (but really, don't I always?).
1. I am not so sure corporate welfare is solely a liberal/conservative thing. For example, Mr. Ryan would like to end corporate welfare as well (at least he says he does). Meanwhile, here in Massachusetts, Gov. Patrick still have egg on his face concerning how much money he and the Legislature gave to Evergreen Solar as an incentive to stay in Massachusetts (who promptly closed up shop and moved to China). I agree with ending corporate welfare, but I just wanted to point out that it is not necessarily a left/right paradigm on this issue.
2. I think we could reduce rates overall, eliminate most exemptions, and still increase our overall revenues. I also think that we should expand the tax base by having the bottom 50% of wage earners pay at least something (because right now they don't). You can increase taxes on the rich all day, but as long as the top 1% pays more than the bottom 95% combined, you're going to have revenue issues. Further, you could probably avoid capital gain taxes by just broadening income taxes to include income from whatever sources derived, including capital gains. I still fail to see what it is about capital gains income that is so different from ordinary income.
3. I also think that there should be a rule that says when one group or bracket has tax rates increase or decrease, other brackets should increase/decrease proportionately. That way everyone has skin in the game at the same time, and you can avoid virulent class warfare nonsense.
4. I think you could replace the corporate income tax with a VAT. People complain a VAT is regressive, but anyone willing to tell the truth about corporate taxes knows that corporations do not pay their corporate taxes; they either hire an army of tax-avoidance specialists, or pass the cost along to the consumer (usually both). Besides, if we stopped treating corporations like people for income tax purposes, liberals could probably make a better case against treating them like people for First Amendment purposes.
5. While I am game for the idea of adding more brackets, I would simply state that I believe it would be wrong to implement any bracket percentage above 50% of income.
I like this idea (no comments on re-bracketing though):
ReplyDelete1. For one year, Congress will address no legislation expect for the budget. They will pass no other law than the budget. No more unfunded mandates, no more "federal requirements," and the like. Take a long "working vacation." Meet with your constituents. Sit down with some blue collar, white collar, academic, student, young and old types and talk it out for one full year.
2. Setup a team at the DOJ to identify and aggressively recover money from Medicare fraud. Aggressively.
3. As a constraint in the budget bill, no new federal buildings or cosmetic rehabilitation projects shall be funded for 5 years unless there is an immediate safety need.