A SIMPLE Tax Plan to REPLACE Bush's tax cuts. Or is this too simple???

[AnArmyVeteran]

My tax cut plan:

Before the end of the year keep the current tax cuts for the bottom 90%, but raise taxes for the top 10% by five percent, except for the following conditions:

For every 1% drop in unemployment the top 10% get a .5% tax cut. 

If the unemployment drops 2% the top 10% gets a 1% tax cut. 

This would continue until unemployment was lowered to 2%. At that point they would be receiving almost the same tax cuts they had under the Bush tax cuts.

Republicans say they believe tax cuts create jobs, so this is an incentive method to force those with capital to USE their capital. Make the wealthy work for their tax cuts. It is also a direct way for democrats to attack the republican claim that tax cuts create jobs. It also gives republicans the option of wanting tax cuts or not based on the conditions above. In other words, it puts all of the burden back on republicans.  

And leave this tax system in place so if unemployment goes back up in the future the richest 10% get taxed at the same rate structure that I proposed above, only in reverse. If unemployment goes up 1% their tax rate also goes up an additional .5%. This would help eliminate the tax shortfalls that always follow huge increases in unemployment. The increased taxes from the rich would help sustain (in part) everything from social programs to teacher's salaries.

This plan should be agreeable to moderate members of both political parties and all American citizens. It's a win-win plan. And it would position democrats to be in total control of the national dialogue and republicans on the defensive. It would also remain an incentive to the rich and to businesses, because if they dared to fire large numbers of Americans their taxes would go up. It would also help to slow down the outsourcing of jobs to overseas countries.

What do you think?

Now, if they only do something simple and rational like the plan above...

[Sherman A1]

1. Certainly worth discussing and a long hard look

I would return to the tax brackets of the Eisenhower years, but I bet we would hear some screaming from the upper crust.

[AnArmyVeteran]

5. The middle class grew & the economy was great under 90% tax rates.

I agree with you. Republicans believe all entrepeneurs wake up every morning and look at the tax tables before getting put of bed, and if the tax rate us too high they completely give up. History shows us that we have had the greatest increases in the middle class during periods of higher taxation.

Oh yeah, and the interstate highway system still being used by businesses today would never have been built if not for socialistic programs. And businesses in the 50s and 60s wouldn't have had the skilled workforce needed to create new inventions and products without that socialistic GI Bill which allowed veterans to get college educations.

I wish democratic leaders would mention these programs. If today's republicans ran the country back then the United States would be several decades behind the rest of the world by now. And that is where they want to take the country now.

[Sherman A1]

10. Precisely

I think we need to raise taxes, get the debt under control with significant cuts to the MIC, improve Social Security by lowering the early retirement age and including Medicare (I would include a program of required community service for early retirees that can do so) to open up jobs for the younger unemployed workforce. We also need universal health care which would cut expenses for all businesses and raise our standard of living by creating both a level playing field and I would think a healthier society.

I think you & I could cook up a couple of good ideas together!!!!!! :toast: Maybe we should run for Congress??????

[taught_me_patience]

2. Good out of the box thinking. Recommended!

[AnArmyVeteran]

7. Thanks, it could use tweaking, but something has to be done, and now.

[GSLevel9]

3. Many experts believe that "true zero unemployment" is around 4% nt

[LiberalArkie]

4. Sounds great, I would let it go until unemployment was -10%

in other words everytime someone got out of high school, there were 2 or 3 good paying jobs waiting for them.

[AnArmyVeteran]

8. I like your plan better!

I'd like to amend my OP to include an automatic additional 20% income tax on everyone in the top 10% if unemployment reached 10%. The rich would be running scared if the unemployment started to rise and they would immediately do something to keep people employed or hire new people. Even though the rich isn't one cohesive group each if them would get engaged with the country to help prevent unemployment from going as high as ten percent. It's about damned time they began contributing to the country where they received their wealth. I'm sick of the deadbeat rich.

[ProgressiveEconomist]

6. IMO it makes more sense to reward people individually for doing things they conrtol personally

The wealthy have no direct control over unemployment rates. However, some of them own small businesses and DO have personal control over hiring new workers and raising some of their workers' wages.

I'd recommend giving tax cuts ONLY to small business owners who have hired net new workers or given raises to entry-level and lower-middle-class workers, and NOTHING to wealthy people in general. See http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9518706&mesg_id=9522261 .

[AnArmyVeteran]

9. I agree with what you said, but an incentive based on higher taxes might work.

I understand the 'wealthy' aren't all employers and small business employs the largest number of people, but if the wealthiest 10% stand to lose4-5% in taxes they would faced with a choice to do nothing with their money and keep it hidden in interest bearing accounts or they could use their money to invest in businesses that do hire people. At the very least it would force them to do something with their money or lose 5%. There are trillions of dollars 'on the sidelines' doing nothing to help our economy or Americans. The only way to motivate the extremely rich is to motivate them with fear that they would take a big tax hit if they continued to do nothing.

Although I know it's not realistic politically, but when tax rates were 90% and then 70% the middle class grew at it's best. And the government was able to use that added tax revenue to build an interstate highway system that allowed businesses to thrive. Without those high tax rates there wouldn't have been enough government money to build the roads, and businesses could not and would not build them with their funds. Because of high taxes and the infrastructure that was built it led to one of the biggest growths in business in our history.

I'd like to see a much higher tax rate for the top 10%. They are getting their wealth because they operate in this country and they should do their part in helping get our economy back on it's feet. I'm frankly tired of the deadbeat rich.

[quaker bill]

11. The problem

is that one must believe that tax rates actually have a role in employment / unemployment for this to be meaningful. Unfortunately the real data does not support this notion. Taxes, at current rates or even a bit higher, are decidedly not a drag on the economy. Income maldistribution on the other hand is a drag on the economy.

Getting money into the hands of the middle and working classes would resolve unemployment problems and bring balance back to the economy. Raising the minimum wage would be a good start. Providing an enhanced business write off for employment, salary, and benefit increases would be another. Of course the incentive provided by enhanced business write offs would be improved massively if the taxes being avoided by the write off were assessed at a vastly higher rate. Both the carrot and the stick need to be bigger.

[sweetapogee]

12. interesting plan

can you put your worksheet up for us to see your 10 year projected revenue stream? How would revenue under your plan compare to current tax receipts? Can you spell out your ideas on what is and is not an allowable write-off/depreciation? How, with respect to your tax plan do you define taxable income? How would you penalize tax cheats and what are your federal expenditure estimates over the decade? If a low or middle class workers files bankruptcy, would bank write-offs be taxed as income as they are now? How about real estate mortgage short sells? Would you tax the top 5% overseas holdings?

I really love the fact that you keep lower federal tax on low-middle income workers. I assume that you define full employment at 2%. Why? we have been told that full employment is 5%. Would 2% even possible? Would you exclude those on temp disability or otherwise unable to work? How would you classify part time workers or students? Would you impose a cap on the length of time a person could be a student? How would you keep the government from intentionally keeping employment high to enhance revenue?

Well thought out plan, thanks!

on edit: I forgot, would you treat capitol gains for low/middle income tax payer the same as for the upper 5%?