At the behest of my commuting buddy AgentOrange, I have started a thread based around our topic of conversation today: Fixing America.
Money is a problem right now in America. I think I have a radical set of ideas, which if implemented in the order prescribed, may go a long way towards making things better. I warn you – it is a little out there, and it will be painful to most in some way, but should not be debilitating to any. All I ask is that you hear me out, and if you find a problem, offer a solution or two. Throwing grenades and running away doesn’t solve anything…
Item One: Taxes
My Father is an accountant. That is stated to indicate that what I am about to prescribe is not taken lightly, as he, and his livelihood, may be profoundly affected.
It is time to simplify the code. Whether you call it fair, flat, or Value Added, the first step in The Plan is to stop taxing earnings and instead tax consumption. The only way the federal government gets its share is when someone spends money. I’m not here to say what that percentage should be, but it should be the same across the board, so that Nice BMW will end up costing even more, but hey, if you’re looking at a BMW instead of a Kia, you have already decided to spend it. All other Federal taxes go away. Yes. All of them. Of course, certain “staples” will be defined and be sold tax-free, but otherwise, all of the taxes are collected at the sale of a good or service. States and localities are still free to tax as they see fit to provide essential local services. I am only dealing with the Federal government here.
Item Two: Retirement
Social Security is neither social nor secure. Here is my proposal: If you are currently drawing benefits, you get to continue drawing benefits. If you are not drawing benefits, but are over 55 (or some other scientifically determined age) you are eligible for a one-time withdrawal of 50% (or some other scientifically determined %) of your Social Security “pot”, for you to do with as you please. Age 50-55, you get 30%. 40-50, 15%. All others get 10%. All those not currently drawing benefits get to open a Universal “Beta” account, which is essentially a 401k in nature, but no taxes (on either side), and contributable by any employer, and even private contributions are allowed (no limits). These will be administered by private institutions, and come with a safety valve option: the ability to transfer funds to an FDIC backed account (but not back out again). No more corporate run 401k programs, no need for separate IRA’s, etc. The burden (if that is what you want to call it) is on the individual. Again, your employer can contribute to your fund just like current 401k plans, and a carrot of some sort should be devised to ensure that they do, as there will no longer be a need for Social Security taxes and payroll taxes and such.
Item Three: Entitlement and Welfare.
Programs specifically for children (and administered to the children directly, not through the parents) will be reformulated so that they can continue to operate and serve the needs. Other safety nets such as “welfare” and unemployment will be terminated under the following conditions:
a) Unemployment insurance is to be carried by the individuals, run by private institutions, and procured through the employer. The individual chooses their coverage and terms, and the company deducts the premiums from the paycheck.
b) Unemployment is collected only in the case of company-directed without cause termination. Upon the decision to terminate employment without cause, the company is required to pay the premium of the employee unemployment insurance for one full year.
c) At the same time that many services cease to be funded by the government, every American Citizen will receive two “checks” totaling a value of $X, where X can be anything from $10,00-50,000. One check (50% of X) will be deposited in the Beta account. The other check will be deposited into the bank account linked to the Beta account – to be spent as the user deems necessary. A formula should be determined to provide more money to those who did not utilize certain services as a reward for their responsibility, however I will not go into that formula at this time, because we haven’t identified all the programs in question yet.
d) Certain discontinued government services will be privatized so that those who feel they require the services can still receive them – for a fee.
e) None of the checks will be deposited without first providing for a period of time where those who want more education on money management can attend local seminars/webinars on the subject at no cost.
f) The Department of Useful Work will be created to replace unemployment. Public work projects of all shapes and sizes can be staffed by those displaced by the agencies closed and by those seeking work. These will be public-private partnerships subject to outside contracting as well as federal laborers. This will not be work for works sake – these will be projects either privately funded by grant or funded by acts of congress. Transportation, Energy Sources, Environmental Sustainability come to mind.
It should be noted: Once all of the above occurs, there will still be public services, but very little in the form of direct hand-outs. Loopholes will need to be closed, and dealing with the innocent children of not-so-innocent parents is still an open issue.
Enough for now. Part 2 to follow as it develops.