I have been getting argued with a lot on twitter for my 140 character limited statements about the economy. Many simply do not grasp the concept of growth as the most feasible avenue to create a nearly endless stream of revenue. Unfortunately twitter does not have the ability for me to break things down in a comprehensive manner.
First, I would like to state, since many of these liberals ask my qualifications on economics, what gives me a good idea of the happenings of economics.
To be honest, I don’t have an economics degree, or any degree for that matter. Never could get through the attempts to indoctrinate me to become liberal. My thoughts come from experience in the real world of business running three businesses in my life time.
I have also worked several years in the business division of the Internal Revenue Service, working unemployment tax, employment tax, corporate tax, and partnership tax returns (as well as amended returns).
This combination of firsthand experience has given insight into what is good, bad, and ugly about the policies from Washington D.C.
So let’s start with the biggest crippler of business growth: taxes.
I can tell you right now, it’s way too complicated and way too expensive the way things go at present. As a matter of fact, the tax code is so complicated, not a single person in the government or private organization knows the code in it’s entirety. And with over 80,000 pages of legal jargon, it’s not hard to understand why.
What needs to be done is simple: adopt a plan that applies equally to all wage earners in the United States. The plan I would like to propose is really simple.
(1) An even rate that applies to everyone that earns money, regardless of the source. Ten percent.
(2) Ten percent corporate income tax.
(3) Ten percent estate/gift tax over 50,000 dollars.
(4) Privatize social security to prevent government moving in and raiding the supposed “lock box” like was done, and has continued since the Clinton administration.
(5) Eliminate deductions. And I do mean all deductions. Also get rid of credits (because taking from someone else to give to another simply for having children is morally wrong).
A lot of people see this as callous. I see it as fair. No one escapes paying. And no one gets special treatment. Some will complain the rich aren’t paying their fair share, well let me use easy math to show that as wrong.
You make 30,000 a year. You pay 3,000. Mr. Rich makes 100 million, he pays 10 million. So tell me why when he pays 9,993,000 more, it’s not fair? He got where he is through a combination of luck and skill. And this makes it easier for you to get there too.
By lowering the rates to this level, businesses will expand like never seen before, and be able to more easily afford better wages and benefits, so everyone hired also wins.
This also puts America as the most competitive to start a business, which breeds competition, driving prices lower, benefiting the employees even more.
Also, as employers hire more people, two things happen: the unemployment rates drop and more revenue is created.
If just 100 million people have jobs at a median wage of 40,000 per year, you have an income tax revenue of 4,000,000,000,000. That is four trillion dollars! Without even touching the business owners, corporate taxes, or capital gains!
Now factor that the large corporations makes 50 billion in profit annually, and there are 100 such corporations. That equates to 5 trillion dollars in profit, or 500 billion In tax revenue. This doesn’t account for small or medium business that don’t bring in billions.
Potentially we are talking 6 trillion in tax revenue without even touching capital gains or estate taxes.
That is enough to pay our current spending levels and pay down about one trillion in national debt per year. That is without cutting one dime of spending.
That’s about 17 years to debt freedom and then cutting taxes across the board to 5% once debt is gone.
You could cut that amount of time to about ten years with spending cuts.
So there you have it. Common sense no one in D.C. Is willing to talk about. They’d rather divide party against party instead of uniting the country.
Bear in mind these are averages, but would be practical if applied properly. This is the ball park we could and should be in.