By Jason Gilliam .. I don’t like getting into politics too much anymore, but I’ve been listening to both liberals and conservatives complain about each other so much, it is DIVIDING this country and creating class warfare to the point of protests and riots.
The Truth is most people think that “the system” is rigged against them, and they are at least partially correct. Politicians and the Media are bought and sold by the rich and powerful to stack the cards in their favor. We all know it. I come from Wall Street and I’ve seen it. There comes a point in a card game when one person (percent) has all the chips and the game is over .. and we are quickly approaching that point. But unlike poker, real life economics never resets and as the middle class disappears, the losers have to live off the few chips they have left, and its proving not to be enough for most people as prices rise.
Nevertheless, we live in the Land of Opportunity, not the Land of Entitlement. Noone owes you a living, or a job. No matter what you’ve been told, the US government is NOT here to provide for you. That was never the purpose of Government, as laid out by our Founding Forefathers in the US. Constitution. Economically speaking, you don’t get what you deserve, you get what you negotiate. That is the nature of free trade, and after living behind the Iron Curtain of Socialism .. I can tell you free trade capitalism is still the best system out there by far. Still, the rules need to be made fair for everyone, and the money needs to get out of politics so that free trade becomes fair(er) for everyone. That won’t happen when the winners can buy the rulemakers (known as “Crony Capitalism”).
On the other hand, you can’t over-tax the rich too disproportionately, simply because when you make the US too non-competitive to invest here, the rich will just migrate somewhere else and take their chips (and taxes) with them and invest their billions elsewhere. When investment leaves, that usually means jobs in the US are lost as well.
So as a former economist, what is the solution? That’s a complex question. But I would likely recommend the following:
The 7 Point Economic Plan That Could …
1. GET MONEY OUT OF POLITICS .. Should go without saying … We absolutely need to get rid of Corruption, the Lobbyist “Revolving Door” and “Crony Capitalism” .. Nothing will work truly for the people until this happens. (Easier said than done you say? see Represent.Us for plan – it’s the best I’ve seen)
2. INSTITUTE THE FAIR TAX AT 20% .. The FairTax replaces the Federal Income Tax with a National Sales Tax and provides a monthly rebate back to every 18+ y.o. taxpayer . (see FairTax.org for plan)
3. MONTHLY REBATE CARD .. Part of the FairTax includes a monthly rebate check to cover poverty levels. Instead of a check, make the rebate in the form of an EBT card and increase it to $1,000 per month. Why an EBT card? We certainly do not want these rebate funds going to casinos or drug cartels, do we?
4. PROVIDE A SAFETY NET .. Allow this FairTax EBT card to pay for basic provisions … like food “staples” (ie no filet mignon or crab legs), healthcare and medicine. No, it’s not enough to replace a full time job, but this EBT card is enough of a safety net to make sure noone starves and everyone has healthcare. In the same note, it incentivizes farmers to keep farming rather than to pay them NOT TO FARM (yes, the US gov’t does this every year and it’s not cheap).
5. FLAT TAX FOR THE WEALTHY .. Restrict the IncomeTax as a FlatTax for every person and corp earning over $500,000/year at a flat rate of 20% of all income over $500,000. They can afford an accountant and audits will be focused on the rich. Everyone else NEVER has to file a 1040 again.
6. ESTATE TAXES .. Yes, Estate Taxes. At some point you need to recycle over-indulgent wealth, but that should not happen when that someone who earned it is alive .. they deserve to enjoy the fruits of their labor. Bringing back the 50% Estate Tax for estates AND TRUSTS/GIFTS/ANNUITIES over $10 million would accomplish this.
7. INCREASE COMPETITION .. Deploy Antitrust laws that automatic force any company that accumulates 50% or more of any market share into an Antitrust proceeding … and then, make it far easier for small businesses to get started and be equally competitive.
Simple? Maybe not simple … Nothing Worthwhile is ever simple.
BUT at least we’re not burning to the ground what so many have died to protect. Think about it … its a fair plan, and with a little political will .. it just might work. I am not delusional .. I realize these ideas will likely never see the light of day, but since everyone was just complaining and noone else was coming up with a comprehensive solution that might make sense, I figure I might.
Please note that the numerical figures I quoted above, are merely examples that are anecdotal in nature and of course, subject to adjustment to account for inflation, fairness, practicality and viability after careful economic study.
Many conservatives and even the Forbes CEO has suggested and promoted a Flat Tax of 20%, which makes the USA very competitive on the world stage to prosper investment. Socialism has failed every time it’s been tried, because you can’t change human nature. If you remove the profit motive, inventors and producers disappear, investment goes elsewhere and then you are stuck with a nation of consumers and little produced … Venezuela was a classic case.
However, Liberals and the poor should also love this plan, because everyone gets a safety net from the government each month from the FairTax. I am sure a lot of conservatives will give it flack about about estate taxes, but the reality is, at some point the winning pots needs to recirculate some if its winnings back into the rest of the surviving players, without taking the earnings from those who’ve earned it while they are alive. Besides, just how many babies need to be born with a billion dollars to their name tax free before they can walk?