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Fixing the economy

Fixing the economy Key Concepts

If we want to fix the economy, let's start with the following:

  1. Begin adjusting a national sales tax rate as a means of fighting inflation
  2. Tax all personal income at the same progressive rates
  3. Remove all exemptions from Personal Income Tax
  4. Reduce the Business Tax rate
  5. Remove all exemptions from Business Income Tax
  6. Cut the standard work week to 35 hours over the next two years
  7. Increase the minimum wage to offset the reduced hours for low income workers
  8. Use income tax to subsidize low income families to a Living Wage level.

Supporting Material

The highest priority task for fixing the economy is to change the way we fight inflation. We need a national sales tax where the rate for any given product class can be changed rapidly without Congressional action. The Federal Reserve should have the authority to modify national sales tax rates within a range (0 to 10%) at will. Objective: manage inflation to tame the business cycle.

In a global economy, taxing business is harmful to local employment. We need to greatly reduce the business tax rate and replace the lost revenue with a national sales tax. That will level the playing field by taxing both foreign and domestic businesses at the same rate. Health care should not be a local only business expense. Health care should be funded by the individual, with lower income workers subsidized by the national sales tax which puts the burden on foreign made as well as domestic products. The price of the domestic products will not increase because both the business tax and the health care costs are already included in domestic products but not the foreign products.

Next, we need to restore a market economy by not trying to micromanage the economy with the personal income tax.

There is a fairness issue: the personal income tax code. It is wrong to tax income earned by capital at a lower rate than income earned by labor.

All personal income should be treated the same. Tax at progressive rates with no exemptions. Simplify the tax code. Replace the entire personal income tax law with a new tax law of 1,000 words or less.

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