February 6, 2011

• America's Major Problem - at least for now

  Why Do we think we can continue to allow our government to out-spend its income? Americans are pretty much agreed on what basic government services we want: A comfortable environment (good roads, drainage, protection from bad guys, - both foreign and domestic, etc), basic assurance of "the pursuit of happiness" which includes security in our old age, education, economic stability, and a strong place in the world.
  All these things cost us and we tax ourselves in order to make it possible for the government [local, state, and national] to provide these basic needs. So why are we so reluctant fully fund our government budgets? These budgets are decided by our elected representatives and failure to support them while at the same time demanding the services means that we must borrow and that's never as economical as balancing our budgets and paying as we go. Currently over 26% of our tax income is spent in just paying interest on our growing debt - and growing.
  Here's my proposal: Figure out how much we need to fund our budgets after careful review and calculate how to allocate taxes among us so as to cause the least harm to individuals and our economy. This is most painlessly done with a graduated income tax where all those employed pay something and those able to pay a higher percentage of their income without material damage to their standard of living pay substantially more. Historically, the most prosperous era of our nation's economy occurred when the highest income tax rate [ on those making over $100K} ranged from 90% to 60% [1945-75]. Obama's idea of raising the rate on those making over $250K from 32% to 39% would be a small start - might encourage those making that much to work a little harder to revive the economy - maybe hire a few more people - what they spend there is not part of their income and so is not taxed.

  • 2:57 pm
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