Lower the corporate tax rate across the board to 15%. What we need in this country are jobs. Lowering corporate taxes will reinvigorate domestic investment by US and foreign companies. Make America THE place to do business again. We have a great labor pool, excellent infrastructure and amazing technology. We do not have cheap labor, but we can make up for that by lowering corporate taxes. It will also encourage companies to create domestic profits which encourages hiring, and domestic investment.
Raise the marginal income tax rates at the following breakpoints. Above 1mm AGI tax at 40%. Above 5mm tax at 45%. Above 10mm tax at 50%. And above 25mm consider significantly higher rates. Back in the 1970’s the highest tax bracket was 90%. We don’t need higher tax rates just to prove a point, we need higher tax rates to discourage excess savings. A family in New York earning 500k is most likely spending the majority of that income to pay for lifestyle. The “problem” occurs when the folks making 10mm only spend 1mm and then save the rest. That excess money is not allowed to affect velocity and does not work it’s way back through the system, likely never being taxed again at least not meaningfully. Don’t worry, the people generating income from legitimate business will be offsetting those taxes if they leave it in the company which would only need to pay 15%. We need to reconfigure our economy from consumption to production. If you make it cheaper to produce than to consume you will do just that.
Focus on energy security, energy independence, and energy safety. Let’s create energy infrastructure that will reduce our dependence on foreign imports (which underpins out trade deficits). We have abundant natural gas resources, and the capability to build global preeminent alternative energy and transportation industries. Turning-points for the American economy have always centered around paradigm shifts. Whether the automobile, the space race, computing telecommunications, or the internet. Energy infrastructure is the next great shift. The race for cheap, clean energy will allow globalized economies to keep their boarders open, reducing the spread of protectionism, AND it will create new domestic industries, keeping dollars home, and creating a renewed sense of American ingenuity. At the moment the Chinese are laughing at us. We can turn them on their heads by lowering corporate taxes and creating cheaper and cleaner energy sources which are a growing problem for Chinese industrial companies. Let’s build so much sustainable energy infrastructure that great global companies have to have operations in the US.
Phase out Social Security payments to individuals whose net worth and/or income exceeds a level whereby their social safety-net payments are laughable. There are retired Americans living off savings or income that exceeds their social security check by 100’s of percent, if not 1,000’s. These people always poke fun at the fact that the country is in dire straights and they are getting a check for a couple of hundred bucks. They don’t need it and most don’t want it. This is a unique country that gives people tremendous opportunity. We should all have to pay into the system. However, those who succeed certainly don’t need to take from it, as they effectively already did.
Allow private insurance for the same pool of people noted above. These people have two options in retirement. They can use Medicare or they can pay out of pocket. Do you know what they do? They use Medicare when it’s convenient and they pay out of pocket when it’s important. This creates a useless burden in what is supposed to be a social safety net and stifles innovation in both the insurance and medical technology fields. Wealthy retirees would gladly buy private insurance if they could. With lifespans increasing, particularly for this demographic, I am certain that an insurance business would develop. In addition, with more demand for private insurance and a higher quality of care from a wider pool of people (presumption is that private insurance will make private healthcare more accessible to lower wealth bands, increasing the size of participants), there would be greater demand for expensive new technologies. The wealthy are usually the Guinea Pigs for medical advancements and they can afford the higher prices required to bring new solutions to market. Let’s put to bed concerns over a split system. A split system will benefit everyone in the long run. Besides if we lower corporate taxes we will have more entrepreneurs who are paying into the system and not taking out.
Look for easy and smart ways to improve the quality of life for working people without onerously attacking the wealthy. One idea I’ve been begging for in New York City is an automobile, gas and/or garage tax that is specifically earmarked for the MTA. I could not think of a better way to reduce traffic and encourage ridership than to make drivers pay for the publics commute. $100 month to go to and from a low paying job is a large tax on the working class in New York. I am certain there are other ways to do this throughout the country not necessarily all geared towards transport. But we can look at taxing the behavior we would like to eliminate and subsidizing the behaviors that create sustainable growth.
Don’t unilaterally attack big oil. Just incentivize them to finally figure out that they are in the energy business. If you are going to raise taxes on carbon, at least give them a chance to earn it back in alternative energy solutions.
Tie the marginal tax increases above to specific areas. For instance. Take all the taxes raised by the increase for people earning more than 10mm and earmark it towards education. No one wants to pay more taxes, that will always create a fight. If you tie it to a program, however, you undermine their defensiveness. In addition anyone making that kind of money did not do it without the help of well educated individuals. Philanthropy in this country is astounding, but individual pet projects have not solved our biggest social problems. We need government for that, one way or another and without two party politics.
The list goes on, but Mr. Obama, we elected you as our spirited pragmatist, not as a dogmatic fool. The guy who preceded you won and lost on dogma. Our country is full of hubris, and so lacking in practical reality. If we are to avoid the fate of Rome we are going to need to think and act differently.