Proposed Economic Plan

Overview

Reduce Spending and Reduce Taxes - The most effective way of improving the standard of living, for all citizens, is to have minimal taxation and minimal government involvement.

Simple Flat Tax - We must simplify the tax code by instituting a flat tax of 17½% of every dollar earned.

No more Loopholes! - There will be no deductions and no loopholes… anything given to an employee, executive, or owner as a form of compensation will be included in the compensation total…the rich will pay their fair share because we will eliminate avoidance.

No more Hidden Taxes - We will eliminate Corporate taxes…corporations don’t pay taxes they just pass them on so why should you pay twice.

Transparency Allows No Chance to Cheat – Although corporations will no longer pay a Federal Tax, they will be forced to provide a greater level of financial transparency. This will prevent cheating and also limit the opportunity of replicating the financial crisis we are experiencing today.
No More Death Tax - Inheritance is not earned money and should not be taxed.

Details

Problems:

Our federal economic strategy has been about a redistribution of wealth when it should have been about providing infrastructure and defense. People will provide for their own wealth given the chance. There is not enough transparency. Currently, there is too much spending on entitlement programs and not enough on programs to give people the opportunity to raise their own standard of living.

What can we do to shift away from entitlement and move towards raising the overall standard of living?

The first thing to keep in mind is, over the past 40 years, we have substantially raised the bar, on the standard of living, in America. Yes, people still go to bed hungry, but as a percentage of the overall legal population, there are far fewer people living below the survival level than ever before. We arrived at this point through hard work, technology innovation, and productivity gains; not handouts and freebies. Based on our research the quickest way to get back on track and move forward would be to lower the cost of living and leave more dollars in the pockets of the American worker.

Isn’t that what tax rebates and stimulus checks are all about?

The problem with a rebate is the government is only giving us back money we have already paid in. The reality is the rebates end up being significantly less than advertised. This is a crazy process which in the long run reduces the GDP by almost 2%. Economists estimate compliance with the Federal Income Tax System increases the cost of goods and services by as much as 20%. That’s right, our tax system literally makes everything 20% more expensive. One of the quickest ways to reduce our cost of living would be to simplify the tax system. Also, by simplifying the tax system there would be no need for rebates or tax returns.

How do we go about simplifying the tax process?

The first thing we must do is rewrite the tax code. The simplest form of taxation is a flat tax. After the first $30,000, 17½% of every dollar you earn will be collected from your employer on your behalf.

Why don’t we pay on the first $15,000?

There is no sense in taxing people below the poverty level. On average it takes a person $15,000 to survive. It makes no sense to tax this money only to provide services or give it back in assistance.

What about deductions?

There will be no deductions. The key will be that everyone will pay their fare share this way. There will be no loopholes…no way to cheat the system.

What about my mortgage deduction?

The mortgage deduction was part of the fallacy that caused the housing bubble. All you are getting is a small refund on the mortgage interest you have already paid. We would rather not take the money out of your pocket in the first place. This is all about transparency and the ability to know how much you are being taxed…no more hidden taxes or false promises.

Does that mean the Death Tax stays in place?

On the contrary, inheritance is not earned income so it will not be taxed.

What about Investment Income and Capital Gains?

Those are considered earned income and will be taxed at the 17½% rate. We consider the activity of investing to be no different than any other work effort. Instead of using your sweat you are using your resources. The one exception will be money taken out of a Mandatory Retirement Account. This money was taxed going in so there is no tax when it is withdrawn after the age of 67.

But without deductions won’t my tax bill be higher?

In most cases no, the middle class tax payer will see a reduction in taxes. All of the people who have been playing by the rules will be rewarded by this change. The people who will see an increase are those who have been taking advantage of loopholes to cheat and an inefficient system.

What is going to stop companies from giving Executives lots of fringe benefits to avoid taxes?

It’s not going to happen under this system. Everything you are paid is taxed including healthcare payments, stock/options, bonuses, and gifts. Anything given to an employee, executive, or owner needs to be included in the compensation total.

How are you going to catch offenders?

Because the tax code will be simplified, and there are no checks to send back, there will be a lot of extra IRS employees. These people will have the opportunity to retrain for the purpose of making certain everyone pays their fair share and to insure corporate accounting transparency.

What is the penalty if a company or a person gets caught cheating?

People won’t be able to cheat any longer. The 17½% is cast in stone. If a company is found not accounting for some form of compensation they will be fined the equivalent of 34% of the amount and the employee will still owe 17½%. If you fail to pay these fines then assets will be confiscated and sold to pay the debt.

Can we really afford to run the country on this amount of money?

This level of taxation will provide us with enough revenue to maintain Discretionary budget items, like Defense and Homeland Security, at their current levels. The goal is to get spending under control so, in the future, we can reduce the rate. That’s why we are proposing that we reorganize the structure of the DoD. We also could find significant savings from eliminating resources and benefits to illegal aliens. Finally, this system is so efficient it allows us to reduce the corporate tax rate to 0%.

Why would we eliminate corporate tax?

Corporate taxes are just another way of taxing you. Corporations don’t really pay taxes they just pass it on to their customers. The dirty little secret about corporate tax is that businesses pay up to $3.00 in compliance costs for every $1.00 of taxes they pay. This again is pushed out to the consumer who ends up paying a higher premium on goods and services.

Can we reduce the deficit so we aren’t passing on debt to our children?

In 2008, over $243 Billion was spent on interest payments. Much of this went to other countries. How crazy is that? Instead, our proposal on Mandatory Retirement Accounts, and their use of Treasury’s, would drive the majority of any debt to be financed by American’s citizens who will now be investing in their own future.

How will all of this insure everyone has a chance to get ahead?

Anytime you create transparency for businesses, and consumers, it provides confidence in the economy. This confidence will allow for greater innovation and in turn greater opportunity. Every great innovation/productivity burst has created jobs that never existed before. There will be a significant increase in blue and white collar jobs and these jobs will be at a higher wage, with lower personal cost since employers and parents no longer have to fund child healthcare directly due to our proposal for a National Child Healthcare plan. More people than ever will have an opportunity to work and care for their families at a fair and honest wage.