How I would balance the budget.

[flamin lib]

The current deficit is $400 billion. 83% of revenues come from individual income taxes and payroll withholding taxes. 11% comes from Corporate taxes.

First thing to do is repeal the tax cuts and subsidies to Corporations making record profits. That's good close to $50 billion a year from the oil industry alone. Then I’d equalize the tax rates for small businesses. The highest tax bracket for Corporations is 39% on profits from $100-335k then it drops back to 35% for everything over $18 million. If a business making $100k in profits can afford 39%, why not one making $40 billion? That would give us $1.6 billion from Exxon alone. That’s probably good for another $50 billion overall, don’t ya’ think?

Second, tax the profits of corporations for executive compensation at a 1:1 ratio for everything over 30 times the average employee wage. If the average employee makes $50k, the bottom line profit takes a $1 hit for every dollar over $1.5 million to anyone in management. That would include all compensation including the maximum value of stock options whether they are exercised or not. Wall street handed out $100 billion in bonuses this year, so I figure that’s good for at least $90 billion.

While I’m working on stocks and such I’d tax unearned income at the same rate as earned income. Why should stock portfolio income be taxed at 15% when personal wages are taxed at 25-35%? Paris Hilton alone would net a few billion. Total on that number could be as much as $95 billion.

Next I’d eliminate the cap on social security withholding. Let Bill Gates kick in another 7% on every dollar like us peons making less than $90k. I really don’t think he’d notice. Current income from SS and withholding is $880 billion, so a 10% increase is another $80 billion in income.

Okay so now the budget is balanced.

For the finishing touch I’d bop on over to the Pentagon and tell them that next year’s budget will be trimmed to only what they can account for spending this year. Seems they lose 25% of their $450 billion budget every year. The way I figure it, if they can’t find what they spent it on they must not need it, right? Worst case is that they’d learn to balance a friggin’ check book. Then I’d get the frak out of Iraq and save another $100 billion a year.

That should put us back in the black and we could start paying down the National Debt. Interest on the debt is the sixth largest line item in the budget at $247 billion. If we could achieve Bill Clinton’s surplus the debt could be gone in 20 years assuming we wanted to pay it all off.

http://en.wikipedia.org/wiki/United_States_federal_budget%2C_2007

[Warpy]

1. The only way to get this country back to fiscal health

without killing 95% of Americans is to bring back the progressive income tax.

Yes, the rich and the corporate will scream like they're being boiled in oil. However, they continue to scream NOW, while they're basking in an economic system geared to making them richer and putting the working people who create all that wealth farther and farther into debt.

The only question is what it will take to get Congress off its collective fat ass and do this very difficult and politically dangerous thing.

[ThomCat]

2. Your problem is

that you aren't a corporate finance person, and you aren't lobbied, beholden, or coerced daily by corporate finance people. So what do you know? :P

I agree. Your ideas make a lot of sense and should be on the table. But I doubt they will be.

[On the Road]

3. If Donald Trump Had Run on the Reform Party Ticket in 2000

part of his platform would have been a one-time 14% tax on all personal assets of over $10 million. That money would have been used to wipe out the national debt. Although the percentage would be a little higher now, I really liked that plan. Never underestimate the Donald's ability to come up with a bold plan.

I would personally prefer that corporate tax rates stay where they are while finding ways to close loopholes and concentrate on making personal income taxes more progressive, especially at the upper end (which is the group that benefits most from corporate profits). The old 93% bracket is too high, but the current tax brackets are way too low for upper-income people.

[flamin lib]

5. But why should a small business earning $150,000 a year be

taxed at 39% and one earning $40 billion at only 35%? Make the tax progressive from bottom to top.

[Selatius]

6. I don't understand the 39 and 35 gap either.

You would think it would be reversed and lower for the small business, not higher for small businesses, but I don't think small business has the buying power of a Wall Street banker or industrialist.

[On the Road]

8. I Agree

Part of making the tax code more progressive is having more brackets at the upper end. I think it's obscene for a middle-class family with two paychecks to be in the same bracket (or a higher bracket) than the wealthiest people in the country.

[ThomCat]

4. There are military options too.

First, an executive order no security clearance shall ever prohibit the President, Vice President, Members of certain committees, top judges and certain designated staff positions, from seeing any information, ever. That opens up the black box.

Then, start digging for crony connections and corruption between the Pentagon and Defense Contractors. Audit the hell out of them.

We could clear the deficit there alone.

[twilight_sailing]

7. "if they can’t find what they spent it on they must not need it"

Brilliant.