Increasing the tax rate

Obama talks fiscal reform at town hall-style meeting - CNN.com

Our President wants to raise taxes back to the levels they were during the Clinton Presidency. I think he needs to put his money where his mouth is, personally. The upper tax rate is 35% and the Obama plan is for all "wealthy" people to "pay their fair share" of taxes.

Apparently this "fair share" is just under 27%. That is all our President and his wife paid in taxes this year. I am a firm believer in living and practicing what you preach. Why then, if the rich need to pay more, did they pay less than the full rate? Shouldn't he be setting an example? You would think so. That would take all the wind out of the sails of his detractors on this subject. Like me.

We are in dire straights, financially speaking, in this country and it is time we get the train back on the tracks and running true. We have really let things go to hell in a hand basket by letting our government get out of control. And we are going to have to pay a heavy toll to fix it.

And it doesn't' need to be all that complicated either. We need to do two things: the first being a balanced budget amendment, and the second being a flat tax. Our tax system is unbalanced in a huge way. The top 10% of earners are paying 73% of the taxes now and the bottom 40% of earners are not only NOT paying tax, but are getting back more than they paid in. It would be fair to call this wealth redistribution. It's not a new thing, either.

If everybody paid a simple, flat tax on income earned it would make "tax season" non-existent as well as virtually eliminate a HUGE arm of the government called the IRS. Along with this flat rate, I'd like to see the elimination of all "double" taxation. Many pay a state income tax (I am fortunate to live in a state that doesn't collect this), as well as sales taxes that go to the state, gas taxes ect. But that is a different conversation for a different time. So for now, everybody pays exactly the same percentage of their income in taxes.

One item that would needed to be taken into consideration is how businesses pay taxes. They DO need to pay taxes on their income, but at the same time they need this money to create jobs. I could see a tax credit being applied to all businesses that grow jobs and keep them for at least 10 years. A business could write off, say, 1/10 of a percent of their tax bill per job created that was a full time, benefits paid position for ten years. But at no time would it be more than 15% of their total tax liability. I would also make profit and loss calculations be done on a simple accounting method.

Then to help the flat tax out, we need to balance the budget. Spend no more than we take in. And for a while we need to spend WAY less than we are taking in and get our debt paid down and under control. This could be established by eliminating all government social programs (it would have to be phased out, realistically) and art programs. The elimination of all ear mark and pork barrel spending by making all bills in Congress be single item bills. No attaching money to study chocolate consumption by red heads in Mid-town to a military spending bill. And we need to create a volunteer citizen oversight to keep the government from spending $5000 for toothpicks and $500,000 for toilet seats. Companies caught grossly over billing for simple services will have to answer to the criminal justice system and their principals will serve the time.

Everybody pay their fair share and we don't spend more than we make. We commit to paying down the debt in time. We all tighten our belts and dig in. Businesses and entities all either make it or fail on their own merits (no public funds for businesses, arts, non-profits). If the public wants to use personal, discretionary funds to support these things, then so be it. The government simply pays for national defense, interstate commerce (highways and commerce laws) and limited international functions.

The other thing that we need to do, as I've discussed in this forum before, is to get our jobs back to the US from foreign shores. US companies that outsource jobs and import their goods for sale in this country should pay a HUGE tax fee to do so and I mean 50% or more.

And so it goes...

Yup. The crying, whiny, mad, angry, disillusioned masses on all sides are waxing verbose on the ups and downs of this election.

It was expected and if it is a suprise to you then I recommend that you crawl back to whatever rock you were under and hide your head, because life is going to get even stranger.

We are at a cross-roads in this country. A massive, multi-option intersection that is commonly referred to in my industry as a "malfunction junction". We need to choose the right one before the next truck comes lumbering down the path and flattens us.

As I write this, the dollar is in a free fall, the Fed just pumped another $600,000,000,000 dollars into the "economy" in a Keynesian attempt to animate a dead thing in a manner that would make Shelley proud and we're on the verge of an economic implosion the likes of which the world has never seen.

This has got to stop. We need to get our stuff under control and pick the path that will take us out of the muck and back to the top.

"A democracy fails the moment the people realize they can write themselves gifts from the treasury."

~Aristotle~

And friends, that is exactly what we've been doing. Our Government has been borrowing money that it is going to have trouble paying back. It has become so commonplace and put so many people out of touch with reality that they believed they could also borrow money beyond their means and be ok. We called it the "housing bubble". The mess that was started by our government, perpetuated by a bunch of greedy thieves and taken up whole-heartedly by the masses. Most people's credit is a mess and their finances are on the edge of total chaos. Most American's believe that they should have the best of everything. Biggest house, nicest car, full tank, stylish clothes and our system allows people to live that dream without honestly showing the reality of it.

We cannot maintain this.

So, what is the plan to fix it? Tax the rich. By golly, why not? They HAVE the money to pay off our debt and solve the country's problems. Right? Wrong. If you were to liquidate Mr. Soros' fortune today and give it to the government, it wouldn't even put a dent in what the Fed spent yesterday.

You've heard that the top percent of earners already pay the lions share of taxes anyway. Most don't buy that as you also hear, "They have accountants figuring out how to keep them from paying their taxes." And that is true to some extent. But, there is a larger majority that don't pay taxes at all! Are you one of them? Did you get back more than you paid in? Then you are part of the problem.

We've grown our government by demanding that they provide us with this, that and the other. We've allowed our government to grow by failing to watch what they are doing and holding them accountable. We have allowed ourselves the luxury of writing gifts to ourselves from our own treasury.

We need to do the following; right away:

• Balanced budget amendment. This needs to restrict the spending to no more than the government takes in for the previous fiscal year.

• Clarity in Legislation amendment Where all laws put forth for consideration are a single item issue. No tacking laws and funding onto the back of a seemingly innocuous bill. And all bills be written in such a manner that they are clear, concise and eliminate loopholes. I'm thinking that limiting bills to ten pages would do the trick.

• Flat tax for everyone. Eliminate the tax refund and everybody pays their share. Flat - say five or six percent. You could even make this a sales tax rather than an income tax. This would eliminate the IRS in large part. Save a chuck of change right there. Simplifies life, too.

• Shrink Government. We have a preponderance of bureaucratic nonsense in this country that is almost totally unnecessary. Most of them are not even Constitutionally legal! I do see the need for some commonality of laws that govern, say...interstate commerce. A truck driver shouldn't have to worry about what laws change as they cross from Pennsylvania into Ohio, or the necessity of the National Weather Service. But Education? Arts? No. these do not need funding. These should be left to the private sector and/or states exclusively.

• Set a plan to pay off the debt. This may need to be an amendment as well to keep it on track! But, we need a plan to pay off our national debt in a given amount of time. It won't happen over night, either.

• Charge an additional "non-employment" tax to those who ship jobs out of the country. One that can't be passed on to the consumer. We need our jobs back. We need to be protectionist of our country and her goods. There is a finite amount of money in the world and we've always had the lions share of it because we made the lions share of the worlds goods. Henry Ford started this whole mess because he wanted a faster, cheaper way to make goods. And he found it. BUT! the cost was finding automatons to do one simple job all day long. The only way was to up the pay. Then the unions got involved from a safety stand-point and slowly evolved to a profit venture. I don't like unions, personally, but if you take them back to their original intent (safety - primarily) then bring them on. BUT, make the US a Right to Work nation.

• Last, we need to re-regulate banking, lending and credit agencies to help keep the common man within due bounds and living within his means. Not regulate investment banking per se where a man can go and propose an idea and get money to pursue it, but personal lending; housing, cars and the like. When people only spend what they can afford, then prices and expenses will fall into line. If item Y cost's $X.xx today, but people don't buy it, then the price will fall until people do, or the company goes under. Supply and demand at it's finest. It's a known fact that prices will go up when demand is high and supply is low. Gasoline, food, hotel rooms and the like. Yep. You ever read the "rack rate" on the back of the hotel door? That is there by law to prevent the hotelier from gouging you during a blizzard. But you see it all the time. Why does a room go from $70 one week to $259 the next? Demand. It's also a known fact that some prices go up during shortages (canned food) but don't come back down as the situation corrects itself. So, when Del Monte raises the price on string beans because Florida froze it's royal naynays off, but the crops come in ok, don't buy the Del Monte brand. The prices will come down.

These are going to be hard decisions to make. Things aren't going to correct themselves overnight. Many will tell me that they are all pipe dreams and maybe they are, but we are at the point where we have to make the hard choices. China owns us right now. We should be beholden to NO country. Not for anything. Money, goods, energy...anything! We have to take steps to correct what we've screwed up. We need to limit our gluttony or face the consequences. And those are too terrible to contemplate.