Economics 101 for the Current Congress

For those who subscribe to small business and independent entrepreneurs (the “fishing rod” idea) and not big government (the “fish” idea) as the catalyst for economic recovery and job creation, I have a few game changing suggestions that will also save America hundreds of billions in tax collections, in accounting costs, reduction of fraud, and in legal and government costs.

a) Convert all state sales taxes to a standard 9.75% countrywide, the fairest and broadest way every consumer can contribute, without exception (in Europe, sales taxes are almost double). All internet and interstate purchases to accrue this national sales tax, leveling the playing field for all, finally (remember, almost 50% of workers in America pay no income tax)!

b) Institute an across the board, no exceptions flat tax for all earners (including capital gains and dividends for all companies), no matter how modest the earnings, of 9.75%, starting at 1.95% in the first year and incrementally rising 1.95% a year for 5 years to allow for comfortable integration. This will more than compensate existing tax payers for the higher sales taxes and encompass as well those who never paid taxes before, ensuring all are part of the solution, not only part of the problem. More and better jobs will result. Businesses will likely be able to thus adjust salaries over the 5 years.

c) For over $100,000 and also $1 million per annum in income, capital gains and dividends combined, for all tax payers and companies, a 15% and 25% tax should apply respectively. Thus three simple tiers. All taxes are now much lower, egalitarian, flat and democratic. No exceptions, no loop holes.

d) Estate taxes the same – 9.75% to start, then 15% to 1 million, and 25% thereafter, irrespective.

e) Imported gasoline to be taxed at an additional 9.75% per year for 5 years reaching a total of 48.75% to bring us closer to Europe and much of the world (where gas costs twice that of the USA). This new realistic level will finally cover the correct real costs of gas including those of security, pollution, carbon emissions, alternatives, and likely wean us off foreign oil. Local oil and alternatives to be exempt from these additional taxes but to have a mandated tax of 1.95% cumulative per year increasing for 5 years (to a 9.75% total) to be spent on pollution reduction and alternative energy research.

f) Government to thus be able to provide an affordable, basic, no frills, cost-effective medical insurance and workers compensation for all citizens, irrespective of preconditions, age, circumstance; funded also by a very modest combined tax of say 6% split equally between all workers and companies, across the board, levied up to a maximum of $200,000 in salary. Anyone can choose to opt out and allocate that 6% privately. Private insurers to be able to offer, across state lines, any and all deluxe and other insurances with rebates given for that 6%. Coverage simply will be available for all according to everyone's preferences, no exceptions.

Thus we can have a simplified 1 page tax policy versus the 2000 plus pages of the Obamacare bill as well as tens of thousands of pages in our income tax code. Easy, cheap to implement and with enormous cost savings. Add to that the huge revenue from the gas tax, the substantial revenue from a larger tax base in a vibrantly growing economy, and most likely our cancerous deficit of some 14 trillion will become a historical footnote, thereby guaranteeing the financial future of our country. Fewer accountants and bookkeepers, less lawyers, less lawsuits, less wasteful loopholes and tax-free machinations where money is spent unproductively to save taxes. A level playing field for rich and poor, equally.

And of course, stop the addictive pork, stop the unbelievable waste, the irresponsible spending and handouts, and give the extra savings back to the people so they can wisely, creatively and individually contribute to our growing future, our expanding jobs base and our economic vitality and competitiveness. Balancing the budget thereby and starting to pay off our national debt while ramping up the economy – this may not be such a bad idea after all.

Leslie J. Sacks