Sunday, June 12, 2011

The New Economy

Well, here we are! Out of the recession! Stronger than ever! A manageable deficit. Low unemployment!
Affordable healthcare for all! We made it! All thanks to our totally fearless leader the incredible Barack Obama! Now, in reality, if you believe anything before the words Barack Obama you need to be on serious medication. All of the above have actually gotten worse. The only bright spot in the whole mess is Anthony Weiner. A nutjob like him could go on Jerry Springer, but he's now going to go in treatment. Right. So, how do we start to turn things around? We do positive things, NOT negative things. How about for starters we do the following and see how it works:

(1) Lower the capitol gains tax.
  • Capital gains on assets held for a year or less are taxed at your ordinary income tax rate (anywhere from 28% to 39.6%, depending on your specific ordinary tax rate).
  • Capital gains on assets held for more than a year are taxed at a reduced tax rate of 20%.
So, lets lower it to 14% and watch business investment and hiring improve.

(2) Simplify the tax code.

Several reforms could make the current tax system simpler as well as fairer and more conducive to economic growth. One reform would be to resolve the uncertainty created by the sunset, phase-in, and phase-out provisions of the 2001 and 2003 tax acts. Having numerous tax provisions dangle for an indefinite period does not simplify the tax code. (It would also make sense to decide whether to keep permanently or to abolish the entire set of temporary tax provisions that existed even before 2001.

Another option would be to reform the individual alternative minimum tax (AMT). To spare the middle-income taxpayers who were never its target, the AMT should be indexed for inflation, deductions should be allowed for dependents and for state and local taxes, and all personal credits should be available against the AMT. Any new proposal that cuts regular income tax liabilities should be required to make conforming adjustments to the AMT so that more taxpayers are not subjected to it.

In a number of areas, numerous provisions-each with slightly different rules-apply to the same general activity. Coordinating or consolidating these provisions would simplify taxes, often with little or no forgone revenue. Examples include the various provisions relating to families with children (the earned income tax credit, the dependent exemption, and the child credit), tax subsidies for education (the Hope and Lifetime Learning credits and the deduction for tuition and fees), and saving incentives (traditional Individual Retirement Accounts (IRAs), Roth IRAs, educational IRAs, and Keogh plans), and the plethora of different tax rates for capital gains.

(3) Shrink the federal government.

According to the Bureau of Labor Statistics, more than 1.8 million civilians work for the Federal Government, excluding the Post Office. I am sure that in ALL of those agencies and departments there is a lot of cross management and over duplication. Eliminate it. How about we simply eliminate some of the federal agencies entirely? After all, I seem to remember our education system being better before there was a Department of Education................................. What about the Department of the Interior? According to them, there stated mission is: "The U.S. Department of the Interior protects America’s natural resources and heritage, honors our cultures and tribal communities, and supplies the energy to power our future." OK, what did we do before they were a federal agency? Somewhow, I think we managed just fine.

(4) Reduce the government vehicle fleet. According to a  March report by the GAO,  the federal government spent $1.9 billion on new vehicles in fiscal 2009, and burned through 963,000 gallons of fuel a day with its fleet of 600,00 vehicles. 600,000 vehicles! I bet we could phase out at least 150,000.

(5) Drill for oil! Our drilling for oil has almost come to a complete halt. But, we give billion dollar incentives to South American countries (Brazil) so THEY can expand drilling. Do you like paying $3.90 a gallon or higher? I sure don't. Also, drill in the NWR. (National Wildlife Refuge in Alaska)
It is a viable and very feasible option. It can also be done without wrecking the environment there.

(6) Put tariffs on poorly made foreign products, and foreign products that hurt American companies. We are still getting cheap Chinese cement that has asbestos fibers in it. Why? Some foreign steel is markedly inferior to American made steel. Slap a 20% tariff on poorly made foreign products and help American companies compete. Also, I don't know of any American toy companies that have armed guards watching the workers as they do in some Chinese factories.

(7) Strengthen our military. We are now stretched thin fighting 2 wars in the middle east. How much thinner can we be stretched? We face a number of known and potential adversaries. China, Iran, North Korea and Soviet Russia are only a few. China and North Korea are arming up, and we are doing nothing. Our navy is now down to 283 ships. A shadow of it's former mighty fleets.

While this is not a total solution, I believe this does represent a good start to getting our country back to a solid future. Want one more reason we have so many problems now? It's simple. YOU! Thats right! Every year most Americans bitch and moan about the politicians that do nothing but waste money and do little effective work. BUT, when election time comes around, those same politicians keep getting re-elected and re-elected. Sometimes change is good! Think before you vote! Until next time, be prepared. Be informed.