FlanaganReport
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The national debt currently sits in excess of 10 trillion dollars, and most people will tell you that at least a portion of it should be paid down.
Here is a possible solution:
Offer every person the ability to pay any amount up front in return for tax credits totaling a 25% (or a varying percent) return on the initial investment.
(Example: I pay $1000 up front and I receive a tax credit valued at $1250)
To ensure that the government does not end up with a year of collecting $0 in tax revenue and be forced to increase the debt, the offer will be staggered to certain groups over a period of a few years organized by social security numbers.
2009: Numbers ending in 0 or 9
2010: Numbers ending in 1 or 8
2011: Numbers ending in 2 or 7
2012: Numbers ending in 3 or 6
2013: Numbers ending in 4 or 5
In order to ensure that all people are able to participate in this plan and reap the benefits, a private market will be established to buy and sell the tax credits obtained through this offer. This market will cater to companies who will buy the tax credits from the individuals for a discounted price.
(Example: I pay $10,000 to receive a tax credit valued at $12,500. A company, for example General Electric, comes to me and offers me $11,500 for the tax credit. I accept. I have just turned at 11.5% profit overnight, and GE has effectively eliminated $1,000 from their next tax bill)
In this way, the government does not fund trillion dollar stimulus packages. The government simply issues tax credits that are then bought and sold on the open market. People who only pay a small amount up front can bundle their tax credits together to get better leverage when selling them.
What this will cause:
Business from all around the world will be attracted to locate in the United States due to ability to pay very low business tax rates. This will create more job opportunities to put people back to work in the private sector, free of government intervention.
It will also mean that businesses, and not the government, are the ones funding a stimulus package. The only government burden from this would be accounting for the increased tax write-offs that would come from this.
Let us consider however that more businesses locating in the United States will create a higher demand for labor, thus driving wages up. These increased wages will result in more tax revenue from individual payers to come back into the system to cover the initial tax credits.
In addition to this, capital gains taxes need to be cut as well. Historically, revenue has increased when these taxes are cut, and this will help to offset more of the cost associated with the tax credit program as well.
According to IRS receipts, corporate income taxes accounted for just over $300,000,000,000. In essence this plan allows for business to eliminate their corporate income tax by paying for a stimulus. As noted, the increased amount of businesses locating in the United States due to this option will create more private sector jobs, grow the economy, and increase the total amount collected in income tax to offset the tax credit burden.
Over the 5-year course of this plan, it would amount to a $1,500,000,000,000 minimum debt reduction. At this pace the debt could cut in half in a mere 18 years. In order to ensure that the debt does not continue to skyrocket while this is being enacted there must be some effort put in place to control spending, and limit government bailouts. The economic growth that could result from this plan would most likely generate additional income to maintain current levels of funding.
This is obviously a work in progress, so feel free to add thoughts, opinions, and changes.
Here is a possible solution:
Offer every person the ability to pay any amount up front in return for tax credits totaling a 25% (or a varying percent) return on the initial investment.
(Example: I pay $1000 up front and I receive a tax credit valued at $1250)
To ensure that the government does not end up with a year of collecting $0 in tax revenue and be forced to increase the debt, the offer will be staggered to certain groups over a period of a few years organized by social security numbers.
2009: Numbers ending in 0 or 9
2010: Numbers ending in 1 or 8
2011: Numbers ending in 2 or 7
2012: Numbers ending in 3 or 6
2013: Numbers ending in 4 or 5
In order to ensure that all people are able to participate in this plan and reap the benefits, a private market will be established to buy and sell the tax credits obtained through this offer. This market will cater to companies who will buy the tax credits from the individuals for a discounted price.
(Example: I pay $10,000 to receive a tax credit valued at $12,500. A company, for example General Electric, comes to me and offers me $11,500 for the tax credit. I accept. I have just turned at 11.5% profit overnight, and GE has effectively eliminated $1,000 from their next tax bill)
In this way, the government does not fund trillion dollar stimulus packages. The government simply issues tax credits that are then bought and sold on the open market. People who only pay a small amount up front can bundle their tax credits together to get better leverage when selling them.
What this will cause:
Business from all around the world will be attracted to locate in the United States due to ability to pay very low business tax rates. This will create more job opportunities to put people back to work in the private sector, free of government intervention.
It will also mean that businesses, and not the government, are the ones funding a stimulus package. The only government burden from this would be accounting for the increased tax write-offs that would come from this.
Let us consider however that more businesses locating in the United States will create a higher demand for labor, thus driving wages up. These increased wages will result in more tax revenue from individual payers to come back into the system to cover the initial tax credits.
In addition to this, capital gains taxes need to be cut as well. Historically, revenue has increased when these taxes are cut, and this will help to offset more of the cost associated with the tax credit program as well.
According to IRS receipts, corporate income taxes accounted for just over $300,000,000,000. In essence this plan allows for business to eliminate their corporate income tax by paying for a stimulus. As noted, the increased amount of businesses locating in the United States due to this option will create more private sector jobs, grow the economy, and increase the total amount collected in income tax to offset the tax credit burden.
Over the 5-year course of this plan, it would amount to a $1,500,000,000,000 minimum debt reduction. At this pace the debt could cut in half in a mere 18 years. In order to ensure that the debt does not continue to skyrocket while this is being enacted there must be some effort put in place to control spending, and limit government bailouts. The economic growth that could result from this plan would most likely generate additional income to maintain current levels of funding.
This is obviously a work in progress, so feel free to add thoughts, opinions, and changes.
