Cross Posted at Brother Bob’s Blog
Ok, I’ve tried. I really have. I’ve thrown out ideas for tax increases that will help, rather than harm our economy. I’ve proposed tax increases that will actually help grow the economy while providing revenue and I’ve also suggested a new tax to allow 6.5 billion entitlement free riders to pay their fair share. Nobody in Washington is listening or seems to be taking our growing budget deficit seriously, so it’s time for an extreme measure – we pay for the deficit. Now.
Even though our federal debt continues to grow in both dollars as well as percentage of our GDP, the mere suggestion that we should not spend more than our grandchildren will ever be able to repay is branded as heartless extremism. Since we can’t prevent the government from spending ever more of out money, it’s time to buck up and accept that, to paraphrase Chris Berman, we can’t stop our elected leaders; we can only hope to contain them.
How much is the federal debt right now? Current numbers have us just under $14.350 trillion dollars, and the adult population of the United States around 232,458,000. Just over 47% pay no federal income tax and the rest of us fall into various tax brackets based on level of income. Here is my proposal – every American pitches in and helps to pay for the debt – no exemptions, no loopholes and no exceptions. Everyone will feel some pain as the entire nation joins in this shared sacrifice.
In the table below I created a draft proposal for how much each American should be charged. Here are my assumptions:
- It starts with some basic reference info that I took from various government sites – total debt, population, tax brackets and how many people are in each
- Everyone’s share is based on the lowest dollar amount on their income tax bracket – no point in punishing the people at the bottom of each to subsidize those at the top
- No children – my numbers are based on what the U.S. Census counts as an adult
- For the people who pay no taxes I gave them a base rate of $20,000/year for several reasons. First, since multiplying any number by zero gets you zero we had to start somewhere, and their vast numbers will skew any efforts to spread the pain among all Americans. Naturally, they will want to share in the sacrifice so I picked an arbitrary number that will help them feel the pain without causing too much pain.
- I further penalized the top tax bracket by assuming an income of $10 million per year. This takes some of the burden off of the middle and lower classes and it’s money that they don’t need anyway. This would need to be further bracketed so as not to cripple people who are just reaching the $1M mark, but this is a starting point.
- The columns to the right explain all of my calculations so that you can see exactly what your fair share is.
Now take a look at what you or your family needs to pay – painful, eh? A quick look at the bill that Sister Babe and I would be on the hook for is enough to make me squirm, but hey it’s time to join our fellow Americans and do our patriotic duty! In terms of implementing this, I have a few ideas:
- No, nobody will be expected to pay all at once. Any individual can set up a payment plan with the treasury
- Every person’s payment status will be shown publicly on the web in a national switchboard – no income or bracket info, but just the name and status – Paid in Full, On a Payment Plan (interest free, it is our money after all), Refused to Pay (which will lead to incarceration), Unable to Locate, or Exempt. This will be great for keeping people honest, as the blogosphere will have a field day monitoring the likes of politicians, bank executives, union leaders, oil company leadership, etc.
- Yes, I did just say exempt for that last category. Although there should be no exceptions, it is understood that some people will be unable to pay – the incarcerated, institutionalized, hospitalized, etc. Each exception will have to be reviewed on a case by case basis. No group waivers like Obamacare – this time privilege does not get you special treatment.
- How do we fund these waivers? Easy. The funds are deducted directly from the campaign funds of the individual’s Senator or Representative who approves the waiver. Any shortfalls will be taken from the national party’s campaign coffers. Yes, this punishes politicians disproportionately but they carry a disproportionate share of blame for the debt.
This is the last of my tax proposals that have no chance of seeing the light of day. If Sister Babe and I were to get handed a bill for our share, it would kill any discretionary spending by us. Vacations, dining out, going to the movies, even our most basic expenses will need to get scrutinized. And this will have the macro effect across the country crippling the industries that I just mentioned. And of course, as we further punish business owners beyond what this administration is already doing, we’ll see even less hiring as every dollar of disposable income gets assimilated by the Treasury. The effects on our economy would be absolutely ruinous. Basically it’s like the tax cuts that Dubya enacted in 2000 to get us past the internet bubble recession, only in reverse. Think of this as the ant-stimulus. But at least we’ll be doing our patriotic duty!
And this proposal is not a substitute for your already existing tax bills – we’re doing this exercise because this debt represents how much we’ve outspent what we’re already giving our government. This also won’t be the last time we see such bills. Any time the federal government runs a deficit the people will be hit with additional one time surcharges based on the schedule I’ve listed above. We would feel a lot of pain, but it would wake everybody up, and I’ll bet that once those bills come people will start paying attention to how their money is being spent. And at long last most of America will finally understand that calling for some sanity to government spending is not an extremist position.
Nice try. What about the unfunded future liabilities, current present value $114 trillion? You can’t pay it, no matter how you share out that burden, because total household net worth is no more than $60 trillion. Ooops! We’ll all be on the payment plan. Actually, we already are…
Interesting theory. Actually, I (we) would be for such a remedy “IF” two things would be ‘guaranteed’. Of course they wouldn’t and a ‘guarantee’ isn’t worth a tinkers-damn …we all know that. Firstly, there is no possible way to keep politicians from continuing to ‘piss-away’ money that is not theirs and making “Us” again liable for their innate stupidity. And, secondly, holding the 3rd-generation deadbeats clamped solidly onto the social teat responsible for anything is counterproductive to their way of life. Hell would freeze over before they paid their fair share.
The only thing that is certain is that “IF” we jack-up Air Force-1 and remove the engines until after 2012 the treasury could save a sh**-pot full of money!
Thanks for the post, Curt!
You’re correct, Doug. As I briefly mentioned in the last paragraph this pain would only be the beginning. We’re only starting to wake up to how our elected officials are mortgaging our future. I’ll be talking about the unfunded liabilities more in my “Economics for Politicians” series.
the debt belong to OBAMA and the DEMOCRATS, CEASE THEIR SALARY FOR ONE YEAR,
and come back to see how much is needed, then cut the entitelment by 2/3rd, come back to see how much left needed cut the aid to MIDDLE EAST COUNTRIES for their revolt to gain total power in order to wipe out ISRAEL,
and come back to see where we are .
but don’t you dare cut the money for MILITARY AND THEIR FAMILY, DON’T EVEN THREATEN THEM,TO DO IT, LEAVE THE POOR ALONE, GET THOSE ABLE TO WORK TO CLOSE THE BORDERS.FOR WHAT YOU ARE PAYING THEM. DONT YOU DARE CUT ON THE VETERANS INCREASE THEIR NEEDS INSTEAD,
AND FOR THOSE SAYING THEIR RELIGION FORBID THEM TO PAY TAX, GIVE THEM AN ULTIMATUM, PAY TAXES OR RETURN TO YOUR POINT OF ORIGINE AND BRING YOUR MOSQE WITH YOU,
AND WE WILL COUNT AGAIN AFTER ALL THIS IS DONE WITH,
IF YOU DEMOCRATS SHOW THIS IS DONE, THE PEOPLE MIGHT GIVE ONE DOLLAR EACH OUT OF GOODWILL TO FINISH YOUR TERM OF OFFICE.
THANK’S Brother BOB
I’m surprised the Republicans didn’t go for the three tier flat tax as part of the budget deal. The flat tax has been a Republican idea for the past 30 years if not longer. One study claimed that there was $1 trillion in federal deductions last year. The tax rate wouldn’t change so technically taxes wouldn’t be raised, the tax code would be greatly simplified and more people would be paying federal taxes as opposed to the 47% that haven’t.
Your big bump in what a person pays who is between $40,000-$49,999 is so high people would try their darndest to be either a bit richer or a bit poorer, don’t you think?
@ Gregory – the flat tax has too many people with interests fighting to keep their loopholes. Simplifying our tax code is gong to have to happen a few pieces at a time.
@Nan these are all pretty nasty tax bills that would hurt everyone. The purpose of this post is to show everyone how much pain we’d have to feel when we start taking the debt seriously.
CNN has an interesting interactive map of what (per person) their state owes in state debt.
http://money.cnn.com/news/storysupplement/economy/state_debt/index.html
Remember the old Red/Blue maps for the election?
Think about what color a state was and then mouse over each state to see how high those people’s taxes are.
See anything odd?
Red states like Wyoming, South Dakota, Texas, Nebraska ($15) have LOW state debt.
But
Blue states like Connecticut (your share: $4859), Massachusetts, New York, California, Oregon, Washington, Illinois, and Hawaii run quite high.
Back to national debt.
Can it be fixed with enough REVENUE?
No.
Why not?
Because our US debt crisis is a SPENDING problem, not a revenue problem as you can see graphically illustrated here.
http://politicalcalculations.blogspot.com/2011/07/spending-vs-revenue-us-debt-crisis-in.html
No amount of money in the coffers will solve the problem.
You are absolutely correct, Nan. Until we reign in spending no amount of “additional revenues” (the new weasel term for “higher taxes”) is going to make a difference. We’ve got to keep working to get more people to realize this.
Bob, useful and valuable exercise. The more ways the problem is presented, the more likelihood its reality will be understood.
Unfortunately, the average American is so deep into the debt basket and living hand to mouth, there is no chance he/she will borrow another dime to kick into the contribution box. The tithing is over.
Umm, Bob, the last two tax brackets have these people pay more than they take in annually whereas all the other ones are less than their annual income.
$500k paying over $1 million and change which is twice their annual income.
$10 million income paying over $35 million and change which is three times their annual income.
The other problem with this is, are these people paying in proportion to the debt they caused? How is it fair to burden others, clearly the lowest income bracket is the source of a significant cost outside their proportion.
What incentive do the two highest income brackets have to stay in the US and not just walk? Don’t think for one minute they won’t, every State that has tried a millionaire’s tax has resulted in a significant portion of millionaires moving across State lines with the result of collecting LESS tax from that group than before the tax hike. These people didn’t get rich letting the government loot their investments, they will simply move their assets offshore just like the Kennedy’s.
Finally, while it is indeed possible to pay off the national debt if structured reasonably, it is unreasonable to assume that those currently making the financial decisions in government would act responsibly. They would simply be handed the proverbial “reset button” meaning they are free to rack the debt up all over again. Unless and until the culture of spending is changed, it is pointless to subject the American people to an unending cycle of spending without restraint. You are making the classic mistake that Republicans did for decades before Reagan, the Democrats would run up the annual deficit, the voters would recoil, toss the Dems, install the Repubs who in turn use to raise taxes without cutting anything to get the fiscal house in order only to have the voters recoil at the tax hikes, toss the Repubs in their anger only to install the Dems again repeating the cycle. Reagan broke that cycle and Repubs generally fought to roll back the spending increases only to anger the voters who were stirred up the Dems making false claims that children and old people would starve. What Obama and Reid attempted to do with the business as usual (clean) debt ceiling increase was to get the Repubs back to the old cycle of raising taxes to fix the fiscal imbalance caused by Dems. So far, it’s only a half victory for Dems and mostly a loss for Repubs as they arent’ rolling back the baseline spending back to FY2007 or FY2008. There is only one way to break this cycle and that is to smash it with a blunt percent cut back to FY2007 spending levels.
There is a much less painful way to pay off the national debt and institutionalize frugality. Cap at FY2007 spending levels and cut 5% a year off that baseline until the budget is in balance, thereafter, amoritize the national debt as you would a 30 year mortgage cutting the appropriate percentage from the remaining budget to pay that monthly installment. Any excess collection of tax revenue from that point forward would be split 50/50 – a tax refund for overpaying and the other half making extra payments on the national debt. The result would be the economy would roar since the government would no longer be skimming the profits in such large percentages leaving more of it for investment in the economy instead of wasting it on programs that don’t work. You would have a full employment society with rising wages which would encourage those at the bottom to upgrade their skills to grab the brass ring as it were. In such an outcome, all government entitlement programs would wither and die, save Social Security and Medicare which would once again become solvent with more and higher paid workers paying into the system. But more importantly Social Security surpluses would be properly invested in the economy just like every other well run pension fund thus fueling an investment led economic boom. Medicare would do two things to get the future costs under control 1. privatize the system cutting the government out of their continual bad decision making and 2. Invest $5 billion a year to cure Alzheimers and Demenia, the twin scourges of the elderly. 50% of all nursing home residents are those aflicted with these two diseases, at $10k per month care per person it doesn’t take a genius to figure out Medicare/Medicaid (shifted there when the elderly become indigent) are buckling under the load of such a cost burden and that literally removing half of those elderly due to a cure would cause such massive savings that these two programs would become self sustaining. We have wasted billions on AGW research which solves nothing, we could have had a cure by now if it weren’t for the incompetent priorities of those in charge. Solve the problem and you change the outcome.
@Brother Bob
May I propose the following taxes:
(1) A 10% tax for each and every political campaign contribution by any PAC, Lobbyist or Licensed Special Interest organization.
(2) A 150% tax on all the full amount of all illegal transactions made while holding political office.
(3) a 200% tax for each and every illegal contribution discovered, (with an additional $10,000,000 fine if credit card origin verification was disabled).
Add to this the following revenue generating legislations:
(1) Federal law requiring Congress and the President to reimburse the nation for all spending over yearly tax revenues. (Waved for deficit spending on disasters zone and congressional declared wars).
(2) A $500 Fine for each and every lie transmitted to the American public by politicians or bureaucrats via press releases, interviews in official capacity, or during official address to the public.
(3) A $1000 tax for each campaign promise that was not kept.
(4) Any politician who changes their political party affiliation after election must return all campaign contributions at a percentage based equally on how much of their term in office is remaining. (Does not apply to contributions made by family members.)
I’m with Mizz Bees when she wrote:
I didn’t spend all that money, and I don’t intend to be forced to pay it back by being taxed…ever. I’m retired and can live quite comfortably below the bottom bracket.
Of course we’ll all have to suffer the inevitable destruction of the U.S. dollar.
John Cooper, hi, yes,
I wonder , when OBAMA GET HIS DEBT CEILING RAISED UP
IF WHAT HE SAID ABOUT THE MONEY HE ALREADY SPENT,
AND THE MONEY, HE ALREADY PROMISED, WILL TAKE
A QUITE BIG CHUNK OF IT , YES, I WONDER WHAT WILL BE LEFT OF THE AMOUNT AFTER THAT CHUNK IS CUT OF,
WOULD IT BE BETTER FOR HIM TO CUT THAT ALREADY SPENT MONEY BUT NOT DELIVER, AND THE ALREADY PROMISED MONEY,, TO BE CUT OF COMPLETELY
HE JUST HAVE TO TELL THEM , THEY MADE ME DO IT. SORRY FOR YOU ALL
THE BUCK STAY IN AMERICA FROM NOW ON
My plan is simply much simpler and far easier to implement. Of course, your plan assumes that people would pay half their gross income for a year into the tax system. And the amounts are completely unreal. $10,000 if you earn $199,999 but $100,000 if you make $200,000. You can bet I would earn $199,000 if I could shift my income to another year.
I have a far easier solution. Reduce spending (ok, pretty damn difficult with the current liberal philosophy that money grows on trees). The other issue is simply a matter of mathematics. If you took all the wealth of the richest US citizens, it still wouldn’t be enough.
So, why don’t we try something truly dramatic. I am more concerned about the unfunded liability (social security and medicare). I have a very, very simply solution. Make collecting SS and Medicare a capital offense. This would mean we could still collect the money (reduces the deficit and hopefully pays down the debt).
(This idea was tongue in cheek, for those of you who didn’t get it).
There are a lot of Democrats, Obama included, who lament that they need to pay more taxes.
I have an idea.
Go ahead and pay more taxes!
Details via the American Thinker….
1. According to the 2010 Obama personal tax filing, Barack and Michelle Obama claimed $373,289 in standard deductions. Instead of claiming all these deductions, the Obamas could have simply selected to utilize the standard deduction ($11,400 for married couples), thereby boosting their taxable income by $361,889.
By utilizing this strategy, they could have paid an additional $126,661 in 2010 income taxes (utilizing a 35% marginal tax rate).
2. In 2010, the Obamas contributed the maximum of $49,000 into a Self-Employed 401K. By utilizing this strategy, the Obamas successfully managed to avoid $17,150 in 2010 income taxes.
3. The Obamas managed to take the maximum capital tax loss deduction of $3,000 in 2010. If the Obamas had not recognized a long-term capital loss at some point in the past, they could have paid an additional $1,050 in 2010 federal taxes.
4. Obama utilized the Foreign Tax Credit on the individual Form 1040 to the tune of $22,215.
See how easy?
Obama could have paid an additional $167,076 in 2010 federal taxes.
Now, multiply that by every rich, guilty-bleeding heart Democrat in the land and we’re getting somewhere!
Great takes, everyone – thanks for taking the time to read and to comment! I don’t have time to respond to everyone but…
@dscott: Great point on the upper income brackets just walking. I talked about how my proposal would hurt consumption but didn’t talk about the negative impact on investment. I’ll be talking about that more in the coming postings of my “Economics for Politicians” series. Stay tuned for more.
@Ditto (and everyone else who is calling for higher taxes on politicians): Click on my “Grow the economy” link in the first paragraph to my first proposal for higher taxes from last year – I think you’ll like my ideas.
@Nan: Love the American Thinker take! I’m filing that one away for future reference!
@Brother Bob
The ideas you describe for taxation (on your web page) for the most part appear “reasonable’ to me (if we are going to follow the Far-left’s examples on ‘fair’ and ‘reasonable’ taxation and turn it back to gore their oxen, sacred cows, etc.).
The Fair Tax would be the fairest way for taxing people. No tax forms to fill out and no charts needed to decide who owes what. Each time you buy something NEW you pay your taxes. EVERYONE would pay the tax, not just 50% of the people. The rich would pay more because they buy higher priced stuff.
Read The Fair Tax book and find out how simple and fair it is. The bill is in congress now. If you like the bill, let your politician know.
@Ditto: #12
Before a politicians can be PUNISHED for a crime they have to be caught. This is why there should be what I call a “Political Crimes Tribunal” that goes after politicians who commit crimes while in office just like the War Crimes Tribunal goes after people who have committed war crimes. There would be no statute of limitations.
@Smorgasboard
I concur, yet the law and penalty statutes must exist prior to enforcement and penalty phases. A Political Crimes Tribunal will only work if it is an independent panel that is not beholden to those the would rule over. Of course the real trick is getting such laws passed.
So, when are all the aholes in Washington going to take a 10% cut in salary?
How many more flowers will Nancy Pelosi purchase for her office?
@Ditto: #21
Nothing is going to change in congress unless we get new politicians who have signed a contract of what they will and won’t do and have it legally binding so that if they don’t do them by a certain date, they will automaticly be out of office.
Fox News had a story about soldiers coming home and not being able to find a job. I would like to see a lot of them run for office. Being in the military doesn’t automaticly make a good politician. We have a lot of ex military on the liberal side. Another good reason for term limits
cml in maine, hi,
yes that’s what a good will government should have done before the debate on to rising the debt ceiling,
they wanted more without giving any, and that has been noticed by all the people from the beginning,
they where crumbled before the debate began, BUT NOW THEY COOKED THEMSELF
AND REMOVED ANY CHANCE OF THAT DEMOCRAT PARTY RECOVERING. IN 2012
BYE