The #1 Financial Problem Our Next President Needs to Fix

Whatever the outcome in November, our new president will be saddled with a tremendous economic mess.

The U.S. is drowning in debt.  Entitlement spending is about to explode, including the costs of ObamaCare that were conveniently delayed until its namesake left office.  The cost of servicing what will soon be a $20 trillion federal deficit is heading higher and consuming a larger percentage of government spending.  The United States fiscal situation is on an unsustainable trajectory.

The situation, however, is not hopeless.  There are steps a new president can take to improve the situation.

But there’s one thing he – or she – absolutely must deal with right away.

Right now, only a radical reprogramming will place the U.S. economy on a sufficiently productive path to pay its current and future obligations. Some may view the following proposals as extreme, but they are absolutely necessary. Whether they are feasible depends on whether we can summon the political and moral courage to enact them.

Our Taxes Are Killing Us. We Need to Cut Them.

The tax code is the DNA of the economy.  It establishes incentives for different types of economic behavior. Unfortunately, the U.S. tax code has been hijacked by Wall Street, big business, big oil and other special interests. The result is a system that favors debt over equity and speculative over productive investment. In some cases, such as the totally unjustified tax breaks given to hedge fund and private equity managers, the wealthiest Americans are allowed to pay significantly lower tax rates on their income than lower earning Americans.

Two Smaller Reforms That Will Make A Big Difference

End the Estate Tax: 

The estate tax should be eliminated. Rather than promoting tax fairness by confiscating the life’s work of the most accomplished people in society, the estate tax is a socialist relic that is easily avoided and accomplishes little. It should be given a decent burial and free up financial and intellectual capital for more productive uses.

Raise Sin Taxes: 

Taxes should be raised significantly on cigarettes, alcohol, legal gambling and guns. In addition, if marijuana is legalized as it should be, it should be taxed heavily. All of these activities (with the possible exception of marijuana usage) contribute to higher healthcare costs and should be discouraged by the government that ends up paying for much of the damage they cause. The most effective and equitable way to accomplish this is by making those who use these products compensate society directly through higher taxes.

Until these flaws in the economy’s DNA are fixed, the U.S. will keep growing more indebted, less productive and less competitive.

The first step is to broaden the tax base and promote tax fairness .A common misconception is that the way to promote “fairness” is to raise taxes: that type of thinking is the product of minds that understand little of economics and less about human nature.

Lower tax rates benefit everyone but particularly those who aspire to the top of the economic pyramid. Higher tax rates discourage economic activity and encourage people to avoid taxes. The government is an inefficient allocator of capital. Higher tax rates reduce the return on capital, create disincentives for investment, and reduce the amount of capital available for investment in productive activities such as technology, education, building new factories and capital goods, and research and development.

They also reduce the capital available to invest in raising labor productivity to enhance economic growth and income gains. In short, they trap the nation in an economic death spiral.

Leaving more income in the hands of the private sector, on the other hand, is the surest pathway toward economic revival (which we certainly need right now).

My solution is simple.

  • Drastically lower all income tax rates. Individual tax rates (including payroll taxes) should be lowered to 10 percent on all incomes below $100,000 per year, 20 percent on all income below $1,000,000 per year, and 25 percent per year for all income above $1,000,000.
  • Get rid of tax deductions. Ordinary income tax rates should be lowered and all individual deductions (with two exceptions) reduced or eliminated. The only tax deductions that should be kept in place are the charitable deduction, which should be capped at 20 percent of income annually, and retirement plan contribution deductions for taxpayers with income below $500,000 per year. Taxpayers with higher incomes should be permitted to contribute to these plans but their deductions should be capped.  Businesses should continue to be able to deduct their ordinary and necessary business expenses from their income to determine taxable income.
  • Stop “rewarding” people for borrowing money. One of the biggest flaws in the tax code is that it creates enormous incentives to borrow money. This makes the U.S. government-which means the U.S. taxpayer-a partner in every debt transaction in the economy. Every time someone borrows money, he or she is subsidized by his fellow citizens. Is it any wonder that debt never stops growing? An essential step that must be taken to fix the tax code and strengthen the economy is ending the interest deduction for all debt-and that includes the hallowed home mortgage deduction. Once we start treating equity and debt equally, the foundation of the American economy will strengthen as equity replaces debt in individual and corporate capital structures. An appropriate period to phase-in this change (i.e., five years) should be provided, but we must bite the bullet and recapitalize our economy with equity.
  • Stop killing businesses with obscene corporate tax rates. The U.S. corporate tax rate of 35 percent is among the highest in the world; it should be cut in half to 17.5 percent and applied to net income after all reasonable and necessary business expenses. Special tax breaks should be eliminated except where they relate to scientific or medical research. High U.S. corporate tax rates are placing American corporations at a serious competitive disadvantage because they make the United States an undesirable location for corporate headquarters and investment. Rather than criticize U.S. companies for taking advantage of perfectly legal strategies to reduce their tax burdens, Congress should lower these tax burdens and make it more attractive for U.S. companies to remain domiciled and invested in their own country. Corporations respond to incentives, and the U.S. tax code currently incentivizes them to get out of town.

Like monetary policy, tax policy suffers from the flawed belief that economic actors do not respond to incentives. Tax policy loses the forest for the trees; it focuses on tax rates rather than overall tax revenues. Each time tax rates were lowered, tax revenues increased because economic growth increased. It is common sense that taxpayers will spend less time avoiding taxes if they are required to pay lower rates and if they believe the system is taxing them fairly. If overall corporate tax rates were lower, more revenue would remain in the U.S. and more taxes would be paid here which, after all, is the point of the tax code in the first place.

Sincerely,

Michael-Lewitt_sig

 

 

Michael

89 Responses to “The #1 Financial Problem Our Next President Needs to Fix”

  1. Dr. Ysanne M Carlisle

    Although things like e.g. Obama care etc. do not apply to Europe, some of your ‘radical suggestions’ would make good sense in some European states (I am thinking in particular about UK). Interesting article.

  2. Excellent writing! I’m agreed with all except the immediate jump to 20% income tax at the 100K level. It would be better (fairer) to increment by 1% per 100K such that the 20% isn’t reached until one earns 900K – 1MM.

  3. I agree with the majority of your statements, however, the one big problem with your suggestion to raise taxes on the ‘sin’ commodities, is that it would hit the poor the most. It is well known that the poorer in our society use, in particular alcohol, cigarettes, and drugs to help them get through the day. By all means raise the taxes on guns and ammunition by large amounts, unless we advocate killing off the poor, the old, and bankers, to reduce our debt problem !

  4. Frank Stidham

    Michael, I agree with most of what you recommend. How are you going to get it implemented? I wonder how long it would take to eliminate the debt, if most of your recommendations were implemented.

  5. It is often difficult to have the discussion of reducing taxes with those that fixate on their perception of social and economic fairness. Your brief paper presents a well organized argument that I will use going forward. Accepting the premise that tax revenues will grow, at least our vector will be in the right direction. The premise that people or society will start to understand the difference between equity and debt is to be seen but that would be a powerful contributor to productive investment leading to even better tax revenues. Then we have to tackle the fact that our government spends like a drunken sailor. How about a mandate that every department of the government needs to reduce its budget by 5% every year for 5 years until we become familiar with the concept of living within means. This would likely span two administrations and would reduce the annual government spend by $1T in year 4 or 5 with a cumulative savings as high as $2T. That would be a great start to illustrate the fiscal prudence needed to earn back America.

  6. I’m in almost complete agreement. The homeowner’s exemption need not be eliminated but modified to a time line of gradually reduced deductibility thru say 20 years and limited to one exemption per lifetime, otherwise first time homebuyers and new home construction homes will suffer. Not that there will not be some suffering involved for all and sundry. Of course this provides whomever is elected has the spine necessary to make these changes and join JFK’s list of profiles in courage, as the pain caused will likely equal political suicide.

  7. osman wahidOsman

    HIGH TAX encourages TAX EVATION.corporate giants keep their profits in the oversea accounts.Weathy businessmen keep their money in PANAMA.your suggestion make sense.if tax rate is low they will bring back home profits made.Agree with you but not easy to do. Demands great sacrifice & strong political will

  8. osman wahidOsman

    High tax encaurages tax evasion.the rich keep their money in PANAMA haven.corporate giants maintain their oversea profit off-shore.Your proposal make a good suggestion to bring home billions hoarded somewhere in four corners of the world.Applicable to all countries.not only USA.

  9. Can you provide support for your recommendation for raising the “sin tax.” While I’m no expert in any of these areas, something doesn’t make sense in 2 of these areas where you state these things lead to higher medical costs, specifically gambling & guns. Please cite your references or so state where comments are your opinions. It would likely enhance credibility. Thank you for your insights.

  10. The suggestion that government agencies be required to reduce spending by 5% annually may be supreficially appealing, but it cannot be done. President Nixon tried to do that by impounding appropriated funds. The power to do that was effectively eliminated by Impoundment Control Act of 1974. Congress appropriates budget to the agencies and the agencies must spend it all in the way appropriated by Congress. If agencies are to reduce spending by 5% or any other amount annually, Congress must reduce what they appropriate.

  11. I am interested in all the responses. Everyone has their pet deductions they believe in and want to keep. I have mine too. But we all need to sacrifice something for this or any other plan to work.

  12. Michael, you had me until the sin tax. Don’t go there. As said above, sin taxes mostly hurt the poor. And guns? Really? How many times do we have to tell people that a gun is a “tool”, and it’s legal, just like your car is legal, even though your car can kill someone. Both the car and the gun need a human in order to harm or kill another. Do you really think criminals are going to be paying higher taxes for that gun they bought on the black market or stole?

    And another thing, sin taxes are a slippery slope. Why not read the research on the higher medical costs of obese people who use none of those “sinful” things, but eat LOTS of sugar-filled foods. Should we include sugar in the sin tax category? See hope slippery that slope gets?

  13. Two years ago I was telling anyone who would listen exactly what you are proposing, and I still believe in the basic premise. Another advantage would be the reduction in the size of the IRS, which would be a good start toward Mr White’s suggestion of spending cuts. HOWEVER, didn’t the State of Kansas just try something similar to this proposal, with DISASTROUS results? Basically, the State income dropped dramatically, and they have had to cut their budgets for schools, roads, and other services severely just to try to maintain solvency(unlike the Feds, the States cannot simply print more money). This result should be a warning that proposals such as this, which seem logical, need a lot more research or some additional “controls” to insure that the lower rates will actually produce greater income. As your broker loves to say, “past history does not guarantee future success”. Kansas found out the hard way that what worked for Reagan did not work for them.

  14. I don’t think that any government entity should offer any kind of pension plan. All government employees should pay social security, including teachers, politicians, and all workers. There are other avenues of providing for pensions. If they are union workers, the union could have a voluntary program. It’s too easy to give something that someone else will have to provide.

  15. Extravagant taxes on guns, is a ban on the ownership of guns, especially for those most vulnerable; those who are poor and living in high crime areas. Owning a gun is not a “sin”, it is a God given right to self protection.

  16. With a one party system – Democrats and Republicans are one – and with the Democrats still in control of Congress regardless of how many R’s or D’s there are, it is more probable that the debt will increase even more during the next four years regardless who is elected president. The status will remain quo until the world gets tired of accepting our debt.

  17. Carl Wisnesky

    Your editorial makes a lot of sense, but it will never get through Congress, unless we put in term limits for Congress, so they will concentrate on saving the country & keeping the Constitution intact instead of on getting re-elected & obtaining re-election funds from special-interest groups & lobbyists.
    Unless we get a Congress dedicated to saving the country, most likely they will take the easy way out, which is: (1) Over a weekend, declare a bank holiday for the next few banking days. (2) Re-evaluate the US dollar – 1 ounce of gold = $10,000 US dollars should take care of all problems. (3) Pay off interest on the current debt, the debt itself over a period of several years, & future entitlements in deflated US dollars. (4) Wages & the price of everything from necessities like food to investments like stock prices will go up to compensate for the devalued dollar, increasing tax revenue on these inflated amounts. (4) The only sector that will suffer are those on a fixed non-investment income (pension, disability insurance, etc.) or on government entitlements, as these will not be raised to compensate for the devalued dollar, allowing these people to be paid with re-valued dollars from the higher tax revenue. They will suffer greatly, but there is not enough of them to drastically affect the re-election of most members of Congress.
    This is the easy way out & has been done many times in the past from the Roman Empire to, more recently, 3 times by Argentina in the past 20 years. Hopefully our politicians will have the guts to not take the easy way out, but to instead do something more in line with what this article suggests.

  18. Michael, I’d like to tweak your radical proposal a bit. Presently, much of the money that changes hands is not taxed because of its “underground nature.” What if we eliminate the Personal Federal Income Tax and phase in a “value added tax?” Then, every American who benefits from living here would automatically pay his/her fair share to do so – whether they make their money in the public, private or underground sectors. In such a scenario, all drug dealers, private contractors, “cottage industrialists,” etc. (dealing sometime or all of time in unreported cash earnings) will pay their fair share of taxes, too, whenever they make a purchase.
    Ron

  19. I agree with almost all of what you advocate. However, only the law abiding gun owner would pay the tax. The bad guys will still commit the crimes with there illegal guns. But as one political party believes, “only the bodyguards of the rich should be able to afford guns”.

  20. Nolan Meredith

    Good comments, however I disagree with charitable deductions Its time has come & should be gone. By having a religious or chargeable deduction it spreads the cost over every taxpayer,Everyone pays through higher taxes like it or not, also millions billions of dollars are funneled over Seas to religious fanatic terrorists.Time to wake up.

  21. Horrace D. cain

    I am a veteran (USAF) of 19 years, without any federal veteran retirement money. While the above has some good points, most of it is basic Bull-Shoot! I do have some retirement $$, social security and my airline retirement which is not all that much. I disagree with a significant amount of the monies that Mr. Lewitt expresses.
    I am not going to try to argue his case here. As long as there are far too many people being on the various doles that they can keep their own troops readily over-fed, plus themselves far too overpaid, taxes will be upped over and over.
    Just take a long look at the people that are so terribly fond of those now in power which shows just how basically STUPID
    the people of this country really are. I could write a novel on that subject. Too much said already! HA!

  22. Bill R., you seemed to be opposed to the “sin taxes” because it would unfairly impact the poor, but said “By all means raise the taxes on guns and ammunition by large amounts.” Do you believe that all of the 80+ million gun owners in the USA are wealthy? Your suggestion could impact the poorer citizens, in that they would be penalized by protecting themselves from the very people who benefited from the lack of higher sin taxes.

  23. The biggest “welfare” program. The unaudited military budget. Reduce military budget 10% a year for five years. Shut down the American Empire presence that largely benefits worldwide corporations.

  24. Can you elaborate on how it would be better to eliminate the “rewarding” of borrowing money such as ending home mortgage deduction? Business owners leverage their business by borrowing. Paying off a 30-year mortgage is incredibly expensive for most homeowners even if you reduce interest costs with accelerated payments (e.g., biweekly). Good for banks though. The mortgage deduction seems a valid incentive to encourage home ownership. It’s certainly not the same as the loose lending practices that got us into the recession of 2008.

  25. It’s hopeless. Even your plan is hopeless because you already put an exception; scientific and medical research. Why? You open the door. There are so many things that are vital before that; energy, water, food, education, etc. Why not an exception for them?

  26. Last year I closed my trucking business I had for 21 years and employed over 100 in the state of Washington. There were three main reasons:
    1) State and local taxes.
    2) Responsibility and cost expenses since the legalization of marijuana. I have drivers that need to drive on public roads and once they consume marijuana, even recreational on weekends, and are involved in any kind of accident ( at fault or not) the company is responsible if the driver is found to have the drug in their system.
    3) Litigation NEEDS to have a “reasonable” cap. All businesses suffer from heaving to buy more and more insurance to protect from lawyers and judges that have no limits. In the trucking industry we went from an average of 750K per year on general liability to 3 mil. This does not include cargo insurance, workers comp, medical and other insurance that are ALL required.

  27. If we’re going to tax guns, let’s tax automobiles. Both are simply a tool, and used incorrectly, cause injury. How many DUI deaths/injuries stem from these? It’s ludicrous to think that gun sales cause injury or death any more than the Automobiles etc.. Were it not for gun ownership, we would soon have no freedom. The highest crime rates ergo injuries are found in those cities/states with the tightest gun controls. People can no longer defend or present the aire of defensibility without them.
    The constitution was an inspired document, and the minute we lose site of that fact, we will no longer enjoy those freedoms that stem therefrom. To raise funds, let’s simplify go to a flat tax applicable to all regardless of income levels. No more write-offs or loopholes. It’s ultimately the most manageable. Then require senators and congressmen’s electability based on each body passing a balanced budget each and every year. If you can’t do that, then you cannot run for office again. Then, no more “lifetime” stipends for those serving. It was never meant to be the case, and certainly is an unneeded, unwarranted expense..

  28. Didn’t The state of Kansas do exactly this and instead of spending money people paid off debt and saved … The the state is nearly broke. I agree with removing incentives to borrow but lowering the tax base may not be he brightest idea since the average baby boomer had passed their peak spending age and are now saving and spending less.

  29. Some other equally bad things that contribute to health care costs that should be considered; as far as SIN taxes go: high fructose corn syrup, fluoride, glyphosate, the titanium dioxide laced vitamins, the thymerisol/mercury and other poisons in vaccines, all GMO foods, poisons in the plastic food containers/water bottles, hydrogenated oils, cancer vaccines that cause cancer etc., most foods coming from factory farms, alzheimers drugs-in which not one has any benefit. This is the garbage that needs to be taxed.

  30. You are absolutely right and I do not believe those AH who become presidents are that stupid. So they know but do not implement because all the interest of themselves, the other politicians, the bureaucrats and some rich business men.

  31. Michael

    Your plan has its points. There is logic to it, more so for businesses tho, who
    understand equity and debt and the incentives that exist, tax wise, to take on
    debt and deduct interest for tax purposes, producing tax effects and essentially
    reducing the net interest cost of that expense. Yes, when businesses make
    that cost comparison between debt and equity, your plan would shift the
    incentives in favor of equity rather than debt, for capital budgeting purposes.
    On the individual side, I suspect it would have more effect on the behavior
    of high income individuals, who are past just having a roof over their head
    which they’ve paid for, and are buying houses or real estate because of
    the tax incentives to do so. Your plan disincentivizes that type of investment,
    or as in the recent past and present, speculation (the Bubble of 2008). Tho
    your plan would be painfull for the Real Estate Market initially, probably
    rather painfully.

    But I agree that the system, the Tax Code, encourages speculation rather
    than long term capital investment, Capital Investment which we need
    in some sectors.

    As for the Budget, we need for Congress (the House and Senate) to change
    the incentive system, so as to encourage government managers, be they in
    the Military or Civilian sectors, to spend less money. Possibly offer both
    managers and employees cash bonuses for reducing costs or making
    workable suggestions of how to cut spending or waste!!!!!!! But this
    would require a change of mentality by the Congress about spending.
    Spending decisions I suspect have incentives to members of both
    houses of Congress to appropriate more money!!! Almost in the
    form of kickbacks from contractors for authorizing spending with
    them!!!! Sadly, Congress is hooked into incentives to spend, and
    the game goes round and round and round and round, and where
    it ends nobody knows!!!!!!!!!

  32. Michael
    Your plan has some merit. I suspect tho that corporate managers are more in tune
    with the difference between equity and debt and the incentives under the
    current IRC to incur debt rather than equity because the tax effects
    of deducting interest reduce the effective cost and effective interest
    rate on debt verses the cost of capital of equity. On a personal level,
    those who are more wealthy, and have already paid for their roof over
    their head would probably be more effected by your proposal because
    that additional house or condo or whatever is bought because of the
    tax benefits of borrowing to buy it!!!! Your plan would put a damper
    on real estate speculation, a big damper on that activity, possibly
    initially provoking a Recession because of reduced speculative activity
    in Real Estate. It would also disincentivize other forms of speculation
    ( Hedge Funds, borrowing on margin to buy stock, etc.) We no doubt
    would probably suffer a moderate to severe Recession. But I think
    after the dust had settled, we would be better off, businesses, who
    employee people and invest, would be on sounder financial footings
    because they would issue equity to finance investment, rather than
    sink themselves into debt!!!!!!!!!!!

  33. Rodney P. Lindsey

    do away with the federal reserve banking cartel and everybody pay a flat tax. allow the U>S Treasury who only has the constitutional right to print or coin money based on a gold standard. history has proven all fiat paper money systems have failed. Debt is not money. 6000 years silver and gold has been money.

  34. The BS that everybody puts out astounds me, that go’s for governments and so called experts All the government has to do is make a flat tax for everybody, no exceptions and we would have enuff money to do every thing with out going into dept. .

  35. Marcus Clifford

    That was an interesting article and comments. I do think that this would be a improvement to the flawed tax code that we have currently, but not the best improvement. However, I am in agreement with everyone else that the most beneficial and fair way to correct the situation is by enacting a flat tax based on spending rather then earnings. This would eliminate tax evasion. The only way to evade taxes would be to save. If that was the case then debt would not be incurred and we would be benefitting in that regard. This also eliminates the ludicrous notion of taxing guns as a “sin” tax. My second amendment is a right not a sin. Do you propose that we Institute taxes on our other amendments such as women voting. The only amendment that need be changed is the 16th amendment which Permits Congress to levy an income tax without apportioning it among the states or basing it on the United States Census.

  36. your plan is not radical, actually it’s basic sound recovery economics. I believe the Fair tax goes further and has more government reducing capabilities, built in on principle while all people are participating in one way or another.

  37. Really, Dr. Ysanne? Your few sentences explain to me that you have no idea that some of these tax breaks have been used before. You demonize his article by saying “radical ideas”. Nothing radical about using certain things that have been used before, here in our country. You use clever wording to make his ideas sound bad and should never be discussed again. Your radical idea of evening the playing field so everyone is poor in the world is intentional. Communism will always be a radical suggestion.

  38. I agree with the tax reduction for corporations with the exception of “manufacturing”companies who import their products or those that out source partial production. We must offer incentives to bring manufacturing jobs back to our country. This should be done internally with incentives as opposed to tariffs.

  39. Marcus Clifford

    I do think that this would be a improvement to the flawed tax code that we have currently, but not the best improvement. However, I am in agreement with everyone else that the most beneficial and fair way to correct the situation is by enacting a flat tax based on spending rather then earnings. This would eliminate tax evasion. The only way to evade taxes would be to save. If that was the case then debt would not be incurred and we would be benefitting in that regard. This also eliminates the ludicrous notion of taxing guns as a “sin” tax. My second amendment is a right not a sin. Do you propose that we Institute taxes on our other amendments such as women voting. The only amendment that need be changed is the 16th amendment which Permits Congress to levy an income tax without apportioning it among the states or basing it on the United States Census.

  40. Great article! to push this proposal forward, we need to spread this article to all population and specially to lawmakers, congressmen/women. Keep expose or hammer the article to lawmakers at all level of the government.

  41. RW Left Coast

    Nice start to the conversation about the most complex part of our US funding methodology. I would prefer a flat tax, but there is lots of room to improve the current system with just a few of your basic tweaks. This year, my taxes took over 100 hours of work to complete (and I and my wife are both finance professionals) because we engaged in some good long range planning to avoid taxes. If the tax code were less punitive on certain types of investments (or was a flat rate no matter what the investments), we would not go through all the legal shenanigans to defer income, avoid payouts, engage in carried interest deals, etc… and would pay far more in taxes than we do, but it would be fair across the board. And we’d have a lot more time to engage in productive activities within our community. Thanks for the thought processes and cogent presentation of a mission critical objective for the next Congress (the President can only suggest and lead, but cannot act alone on this issue). Whoever said Congress needs to “grow a pair” is thinking along the right track.

  42. Sharon Wilson

    Guns are a sin? Like most uninformed, you are obviously unaware of how many lives are saved by responsible gun owners standing up to criminals. Forget the sin taxes. Your other suggestions would go a long way to repair this sinking ship.

  43. It is well-established that the net cost to the economy from cigarette smoking is about zero: very high healthcare costs, compensated for by premature death, therefore lower social security and pension costs.

  44. Totally agree with one exception, Estate Tax. This is designed to mitigate development of royalty and class society based on wealth. It is arrogant to believe people get wealthy by their own means. No doubt their personal creativity and engeniuty lite the fire of commerce, but the development of wealth requires access to resources that private enterprise will not provide, tax payers do, so redistribution of accumulated wealth is appropriate and necessary to restricted wealth and control.

  45. Timothy Slater

    I agree with most of your suggestions, but I have one other deduction which needs some consideration, …. that is the deduction for medical, hospital, and drug deductions which are now granted. They are easily accounted for and represent a burden to most aged people. They are NOT giveaways.

  46. I strongly suggest that Michael L’s tax policy changes for The US be immediately presented to Hillary, Donald , and Sanders and even our own PM Justin T. for serious consideration including the reasoning.

  47. Flat sales tax. Everyone has skin in the game. Underground economy has to pay their share.
    No Gun Taxes. Not a sin
    No Estate tax. It is inherently unjust to tax earnings/wealth twice Mr. Robbins. I make this comment having no expectations of an inheritance myself, but I would like to be able to pass something on to my descendants without double taxation.

  48. NO deductions for any thing !
    If you want it , you will buy it , contribute to it ,invest in it !
    also no tax free corporations , or organizations , or charities !
    if you want them , contribute to them
    Flat tax 20 % , personal and business until debt paid
    la

  49. Margaret Hannigan

    I agree with some of your ideas, but not all For instance, I favor keeping the deduction for long-term care insurance because it will save the government money on nursing home expenses that will otherwise be paid for through Medicaid. Also, people who bought long-term care insurance did so with the understanding that their hefty premiums would be tax deductible. Many middle-class folks who bought such a plan (such as I) are not even middle class in retirement and might not be able to continue paying the premiums if a percentage of them if they do not remain included in a deduction for healthcare expenses. And I do believe that a percentage of health care expenses should continue to be deductible since some folks, through no fault of their own, have prohibitive health care expenses. Plus, those who pay insurance premiums are not so likely to use hospital emergency rooms for their health needs.
    Also, if the government cuts the deduction for mortgage interest, it is going to see a lot of angry people who made their decision to buy with the understanding that a portion of the interest would be deductible. If such deductions are to be disallowed in the future, the disallowing should not apply to those who have already bought homes with a mortgage.

  50. Walmart only paid 6% income tax last year. Corporation tax rate of 35% is not being paid by a majority of corporations as they would like you to think they are doing. Excessive salaries should be excluded as necessary expenses once a certain cap is reached on them. The corporate management in the USA is not doing anything to improve the livelihood of their employees. They profess to be concerned about the company investors but guess who owns a large percentage of the company stock nowadays. Excessive salaries have to be capped or the lower corporate tax rate will be a total farce worse than it is now. Big corporations already are paying less than 17.5 % so they will lobby against a fair across the board taxation rate. Corporate mangement of health companies and drug companies care only about themselves as headlines show with their excessive compensation packages that they receive from other company execs that are on their board of directors in the .005 % exclusive club.

  51. Sound of the Suburbs

    The US and the West never did get the hang of this globalisation thing.

    China and India have added a billion workers a piece to the global workforce, there is plenty of spare capacity in the labour force acting as a permanent drag on wages.

    Foolishly we have let living costs soar in the West, with house price booms nearly everywhere apart from Germany.

    The high mortgage payments and rent eat into suppressed wages reducing the standard of living and purchasing power of the vast majority of workers.

    For workers in the West to compete in a global economy, we need a similar basic cost of living to those in the East.

    The minimum wage to cover the basic cost of living must be the same in the East and West.

    The US has probably been the most successful in making its labour force internationally uncompetitive with soaring costs of housing, healthcare and student loan repayments.

    These all have to be covered by wages and US businesses are now squealing about the high minimum wage.

    When you’ve got the cost of living down, productivity is the next item on the agenda.

  52. You got’em going now…. Great ideas! I do believe marijuana has ruined more lives than it has saved. You can tax it so much that it will fall into the black market and not a tax dollar will ever be received possibly creating the next Al Capone. Although it would provide work for all those IRS agents Obama created.

  53. Denis M. Turnock

    USA spends far to much money on defense. How long have we been fighting in Afghanistan and Iraq – HOW many more must die, get mutilated or come home psychologically screwed up for what. What did I read– 900 Million spent for refugees?

  54. President Obama said “I will go through the entire budget line by line and make needed cuts” So I voted for him. He never really did that. The debt being passed on to my kids is a crime.I like to hear any new plan to solve our problems. Keep doing that and we will forever keep shooting holes in your plans. My home mortgage deduction is not longer deductible, because the rates are so low that I already just use the standard deduction. Maybe 5% of all income needs to go Retirement and another 5% to a healthcare account. No ins. 5% is all you got to spend. Spend it smart. Taxes are killing us. Maybe the employer just sends in a certain % of your income. Your Broker does the same and you don’t have to pay 100 dollars to file, If you got kids then you file, Childcare costs money. I get that. Maybe if you were taxed less you could afford to pay for it like I always had to do. Gov. involvemet in fixing problems is not helping anyone.Maybe A vat tax needs to have more thought on. With the total repeal of income tax. You spend money you are taxed. If it costs too much you don’t buy it. Oh it is bad for the poor. Yes it is. However It is the right way to go. Working poor would have more to spend. Non working poor might need to get a job? Conform to the way America works.

  55. You dance to the governments tune. The solution is a lot simpler than you think. Eliminate THE IRS! How will the government get its revenue? The country existed for more than 100 years without the IRS . But this is not a government that acts for the will of the people. Otherwise we ‘d eliminate the federal reserve as well. Those two organizations have been stealing your money & your freedom since they were created!

  56. Agree with you for sure. Some of the things you say we need probably won’t be reached fully by Trump but if we can do what Reagan always said, “if you get 80% of what you ask for, take it!” then we will be well on the way. Now if Congress would do what they were elected to do, which is “represent the people”, then we might see a change.

  57. I always agree with most of Michaels remarks, the financial world has somersaulted into a giant hole. In the U.K. Building Societies are now acting as Banks,
    throwing cash at anybody with or without any proper collateral. Depositors are the their insurance.
    As strange as it may seems the Brexit so far has actually bolstered the UK GDP. I think that whilst a union has its benefits, total reliance brings the lazy southern
    countries to depend totally on the real bread winners, damaging the whole Union. The Big Bubble is sagging.

  58. Paul Livingston

    America will never be great again with the federal tax based on production (income, savings and investment). America’s Big Solution is the FAIRtax bill HR 25 / S 18. The FAIRtax moves the tax base from production to consumption with one simple progressive sales/consumption tax system with only one tax break, called the Prebate, that helps most the impoverished and lower income. With companion legislation the FAIRtax will renew our lost Freedom, Liberty and Civil Rights with the repeal of the 16th Amendment that enables direct taxation. Learn more and join the real/true tax reform cause at bigsolution.org and #FAIRtax

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