Necessary Steps October - 2013
The situation will not even begin to improve until;
1) ALL the marginal income tax rates revert to at least the levels of 2000 for a minimum of 5 years. Federal revenues must increase as part of the solution.
2) Capital Gains on investment and real property income needs to be set at no less than 80% of a persons individual income tax rate based on the amount realized.
3) Estate taxes need to be abolished altogether as it is simply a punitive tax. At the very least, immediate family members should be exempt from any inheritance taxes.
4) The Alternative Minimum Tax needs to be abolished. Enacted in 1969, to in theory, create an additional tax on the highest income levels. The Tax Equity and Fiscal Responsibility Act of 1982 made modifications with respect to tax rates and qualifications, but the ATM tax rates have risen steadily since then while the income levels have not risen to keep pace with only the highest income levels. the result has been that if not abolished, the AMT, will affect about 34 million taxpayers in 2012, compared with only about 200 in 1970. The estimated "revenue loss", if abolished, would need to be offset by item 1 above, a return of ALL marginal tax rates for individuals and business to at least the 2000 levels plus reduction or elimination of other deductions currently in the tax code.
4a) A complete review of individual and corporate tax deductions and other credits needs to take place.
5) Property tax rates need to be based on the initial purchase price with increases based on actual sales figures, rather than the "estimated value" system now in place, but with a maximum 5% increase cap per year. Although this is a State issue it still affects the economy in a big way.
6) The medicare tax for workers needs to increase as does the monthly premium for those in the Medicare Part B or Part C or D programs. This is just a necessary reality to keep the system solvent.
7) The Medicare program must be allowed to negotiate quantity pricing for drugs provided to Medicare recipients the same as the Dept. of Veterans Affairs does now.
8) Current programs that provide Federal money for Grants or Loans for students or educational institutions need to be phased out over a five year period. This should be private business between the individual, the educational institution and the individual States.
9) Current programs that provide Federal money to subsidize or guarantee home or commercial mortgages need to be phased out over a five year period. The ownership of property should be private business between the individual and the bank or mortgage firm or the owner of the property.
10) Federal spending for the construction or repair or upgrading of public roads, bridges, dams, and energy grids needs to increase for the safety and welfare of all citizens.
11) Federal spending in the categories of Health Care, Welfare, and economic foreign aid needs to be reduced by 5% per year over a five year period.
12) Federal spending in the category of Defense (which includes direct military spending, military foreign aid, Veteran Affairs and R&D) needs to be reduced by 5% per year over a five year period. Special attention needs to be placed on the current policy of outsourcing functions through independent contractors which has helped to explode the overall budget.
13) Term limits need to be established for members of the U.S. House of Representatives and the U.S. Senate. The approval to establish term limits should be determined by a popular vote of the people rather than from the Congress.
14) The process of presenting Federal revenue and spending projections (begun in 1996) to a 10 year horizon needs to be abandoned as it serves no purpose and misleads the near term facts.
15) The funds being put into or taken out of the Social Security Trust Fund need to be excluded when presenting projections of Federal revenues and spending per Federal statutes of 1992-93.
16) Federal laws that are currently in effect relating to immigration policy need to either be enforced or removed and adequate funding must be provided for enforcement.
17) Legislation needs to be passed to once again separate the activities of commercial banks from the activities of investment banks.
18) A transparent review is needed to address the subject of Government regulation. Rather than simply be for or against all regulations, specific objections to specific regulations need to be publicly listed and justified by opponents or defended by proponents in an actual effort to solve this problem.
19) A transparent review needs to take place with respect to actual spending by all Federal Departments in an effort to save money if possible and practical.
There are, of course, many more areas that need attention but if we don't achieve a balance of revenue increases and spending decreases through the process of compromise and objective planning, we will realize few solutions to our current economic status.
It is TIME TO THINK AGAIN