My fix for America's Economy

If we're ever going to fix this country and get things going again, we need to grow the Economy and that requires a few things. First and foremost we need to be competitive with the rest of the world starting with our tax policy. It doesn't help that the world has an average Corporate Tax Rate 10-15% less than ours. If we're going to be competitive globally, we need to have a globally competitive Corporate Tax Rate. We should drop our rate to 15% for two years and raise it 1% per year for the next five years for a total tax rate of 20%. This would provide an incentive for Corporations to repatriate foreign cash holdings now instead of later which could lead to the consumption of goods and services and therefore create new jobs. This lower rate will also make the US more attractive for foreign corporations to relocate here, i.e. new jobs. Secondly, we need to end the government practice of picking winners and losers, read prejudice, and eliminate all deductions, subsidies and credits from our Corporate Tax Code. Allow the free market to pick winners and losers and both consumers and producers will benefit.

The second part of reforming the tax code means ending the class warfare rhetoric of a progressive tax structure. Success should not be punished with an ever increasing burden that focuses a greater and greater percentage of the taxes paid to come from the wealthier. Our tax code should reflect fairness but should also be pragmatic and simple to understand. Americans waste billions of hours filing tax documents and billions of dollars hiring tax lawyers and accountants to ensure compliance. This is a dredge on our Economy as these hours and dollars could be spent on more productive means. Our tax code should be simplified to contain a flat rate of 20% with one deduction equivalent to the poverty level income, i.e. for a family of four the poverty level income for 2011 was $22,350. So an Individual making $100,000 would pay 20% x $77,650 = $15,530 in Federal Income Taxes. Currently an Individual making $100,000 and claiming one would pay approximately $18,951 in Federal Income Taxes; claiming a spouse and two children would drop Federal Income Tax owed to approximately $15,981. The only other deduction that should be retained is the deduction given for charity and there should be no cap. Capital Gains, Dividends, Interest, Alimony and Rent should all be treated as Income and taxed accordingly. As you can see, the net effective rate on $100,000 is only 15.5% however on $1,000,000 that net effective rate increases to 19.6%, so if you treasure the idea that the wealthier should pay a higher percentage of their income in taxes, they do. This system is simple and fair, and it eliminates government prejudice when it comes to income and how it's earned and taxed.

The third thing that needs to be addressed is Regulation. Regulation is essentially an additional cost on production because it requires compliance in order to meet Federal Government guidelines and mandates. Compliance often times means having the govt. approve what you're going to do before you do it, which means costly time delays when one has a production schedule to meet or construction that's delayed. Often times these guidelines and mandates are created by bureaucrats with no relevant experience in the field they're regulating. For example, the EPA has set regulations on how much dust a farmer can produce. Do they have any idea how a farmer can plow without creating dust in violation of their regulation? No, and they don't care except that they care the farmer has to comply with their regulation. I have no idea how many other ridiculous regulations exist out there but I'm sure the CEO's of Fortune 500 companies could come up with a slew of costly regulation. A regulatory agency that I think can be eliminated is the National Labor Relations Board which sued Boeing in order to attempt to stop them from opening a new billion dollar production facility as well as putting thousands of jobs in jeopardy because they felt they have a right to regulate where and how Boeing conducts its business operations. It's quite frankly none of their friggin'  business and therefore these shenanigans call into question their existence.

If we want an environment friendly to job creation and economic growth as well as making America more of an attractive origin to do business and perhaps live, then this is a good start. But it's not going to happen so long as we have a Legislature and an Administration that believes it "costs" them to cut taxes. It doesn't cost them anything, it's not their money; it's ours and they're the burden, not us.