We're all great at listing things that we think contribute to the down economy; how about we have a thread dedicated to various ideas on what could improve it? My thought--for any "idea" post, list a significant issue that affects the economy and your idea for some solution that might help address that issue. Let's try to keep it to a single idea per post, for simplicity's sake. Then for any subsequent posts discussing the merits of a particular idea, try to also suggest what you think would be better, rather than just critiquing the initial post. Let's try (as much as possible) to leave partisan bickering at the door. Anyone care to give it a shot?
My first "idea"--I think consumer debt is a huge problem. I think financial institutions have too much incentive to promote consumer debt, and consumers perhaps need some more assistance in addressing the problem. What if we had a "reduction deduction"--so that reduction in a consumer's overall debt load could be deducted from taxable income? Obviously, it would have to be a multi-year measurement to prevent someone from running up a ton of debt at the end of one year to then pay it off at the beginning of the next. And it would have to not apply to corporations, because it's often good for the economy for them to carry debt. I'd also suggest legislation to significantly reduce the fees that lenders can charge on debt, since those seem to exacerbate the problem. Thoughts?
That's a good idea. Some sort of tax relief for those reducing their leveraged investment. Maybe some sort of tax incentive for being in the certain debt to income ratio. Seems like a complicated process though.
Another idea--and please pardon me if my admittedly rudimentary understanding of economics is completely bass-ackwards on this. If the economy benefits from money moving around, then does that mean that corporations who hoard liquid assets are hurting the economy (as well as themselves by not using their assets to earn a return)? Would it be possible to have an additional corporate tax on year-over-year increases in cash on hand? What would be the negative repercussions of something like that?
[video=youtube;3iGm4dl0Ys4]http://www.youtube.com/watch?v=3iGm4dl0Ys4[/video] Bill Burr has a great idea. Probably half way through this, but do yourself a favor and listen to the whole thing
My idea is to find a program that can earn or have benefit for all income levels. My proposed program would be a tax deduction schedule that gives an updated grouping of write offs; used for purposes of investing (be it housing, stocks or small businesses). I would target personal item write offs that every income level can take advantage of. It would have to be items that can't be easily "fudged" or "abused" like loan principle % write off. This % can reflect income scale; which would go towards the left wing philosophy of more incentives for the poor and less for the upper income bracket. Maybe a sliding scale of 10-30%. Insted of just being able to write off the mortage cost of a loan; maybe a certain portion of the principle can give credit to the individual. Example 1: Let's say Joe Smith, who earns 80k per year, buys a house. He has 100,000k saved for a down payment. If he puts all 100k into the down payment; 10% of that principle payment can be written off his income tax (10,000). If he makes 80k per year; that's a tax savings of $2,000. It would be an incentive for Joe Smith to add more of his savings towards the principle; which can boost the deduction of perpetual debt. Also, if more people are more invested into a house or business; they are more unlikely to default on their loans. This could create a chain reaction of housing cost inprovements. Example 2: Let's say Jane Doe, who makes 25k per year, doesn't have 100,000k to put down on the house; but is able to afford $200 extra per month payments (towards principle). She would be able to put in $2,400 towards the principle tax credit of 30%. That would be a tax savings of $720. Win win for both the rich and lower class.
Well corporations are taxed on left over equity; like inventory. Liquid money is needed for a fiscal company. There are dark days that the corporation I work for was so happy they had liquid reserve; because our sales dropped 30% for 6 solid months. Our budget had a 12% net income; and losing 30% in sales actually had us in the red for those 6 months. Without our cash reserve; we would have had to make drastic cuts to stay in business. That means many people would have lost their jobs or we couldn't take advantage of inventory purchases for the entire year for a discount.
Oh, I'm not saying that companies should not have any cash reserves, but there's a point at which they're no longer truly beneficial. Maybe if there were a % of assets line over which liquid reserves would be taxed, or something like that.
I think I missed it. What were you talking about? Auditioning to keep your job? Reinstating bullying? Telling people what to invent and locking them in a room until it's done? Help me out here...
1) Balanced budget. No exceptions, period, except for times of war. 2) Replace the individual income tax with a flat tax. No deductions of any kind. Whatever money from work comes to a person, gets taxed at the same rate. 3) A 5% national sales tax with every penny going against the national debt until it’s paid off. Then the tax is eliminated. 4) Defense- cut 60% via attrition. 5) Medicare- Aggressively go after fraud and make the punishment so severe, no one will want to try. 6) Social Security- eliminate all forms of SSI for what people do to themselves (booze, drugs, over eating…), review all other reasons why people can get this and make it be better proven. Make penalties for all involved very severe. Then, increase retirement benefits a bit. 7) Obamacare Tax Plan- repeal. Keep better parts and then have a more realistic heal plan. 8) Legalize and tax marijuana. 9) A careful review of every social program for 35+% cuts and increased fraud investigation. 10) Reduce taxes on American investments to 10% if held for 2 years, 5% if held for 4 years and 0% if held for 6 years+. Offer this for a buy in period of 4 years to bolster investments in US companies. 11) Allow startup companies to be free of union take over for a period of 15 years so they can build a solid base and eliminate unions in companies of less than 50 employees unless ownership approves. HOWEVER, those companies must pay a minimum of 90% to union scale.
Companies accrue cash for good reasons. Like to fund expansion, to acquire complimentary businesses, or to smooth out cash flow between good and slow times. I cannot think if a good reason to take their capital. Nobody else, period, will put it to better use.
Numbers 2 and 3 would be the biggest turn around for this country. I've alway been a supporter of the nationwide "flat-tax" plan. That program would eliminate the multi-trillion dollar yearly expense of the IRS. You could cut back about 70-80% of that department for regulation of the flat tax. The federal sales tax is another great idea trimming the national debt down quickly!
Tax long-term capital gains and dividends at the same rate as regular income and eliminate the corporate-income tax.
I didn't like his sense of humor at all. But maybe because I'm a nerd, and he comes across as a bitter jock.
