Yesterday President Obama met with many congressional leaders, including speaker Boehner and minority leader Pelosi. The President deemed the conversation constructive and said both sides were frank about expectations. That's great but that has been the story for the past 6 months, everyone is frank and nothing gets done.
This matter of extending the deficit should have been taken care of months ago. There is no consensus among politicians to where they want the country to go, even among the parties. All this back and forth has lead to unhappy constituents and companies who do not want to spend their money. Everything as of now is up in the air and I am starting to think that the President and the Speaker like roller coaster rides.
Here is my 2 cents on the matter for what its worth. First, you cannot stop the funding to programs that the majority of people depend on. Not all of us are sitting on loads of cash and can pay for heart surgery out of pocket. Second, the last thing the country needs is to cut funding to education, as we have seen in the last couple months education scores are at all time lows and some 2nd and 3rd grade students can not identify Abraham Lincoln, enough said. Third, for the deficit reduction to work you will need two things, A, more revenue and B, cuts on inflated programs. Inflated programs such as Defense and Discretionary spending, the way to tackle medicare and social security is not in cutting it, it will be taking some peoples hands out of it and revising current legislation that again favors the wealthy.
Tax revenue is easy and this will please both parties and make accountants life a piece of cake. First lets start with the business tax which is currently at a skewed 35 percent. I say skewed because I do not think any business actually pays 35 percent and the ones that might are typically the smaller less profitable businesses that struggle to pay their bills. My suggestion is take the business tax and reduce it to 19.8 percent, yes, you heard me right. Cut the business tax by 15.2 percent, but wait here's the kicker, NO LOOPHOLES. Make it a flat tax, by making it a flat tax the government would increase its revenue, I do not know exactly by how much but just think, General Electric did not pay a dime last year in taxes and made record profits. Whats wrong with that picture, companies are striving and people are starving.
For the people by the people is what the constitution states and if the people still want to own it, then they have to pay for it. Lets think back to 1950's and 60's when America was striving as whole, we had natural employment and home ownership was at an all time high. Guess, what the income tax rate was for those who made more than $250,000, whatever you said was probably wrong it was 70 percent. Guess what it is today, I am sure more of you know this answer, 35 percent. Now I am not saying we should go back to the 50's and 60's but it just shows that people can be taxed heavily and still be happy. There needs to be a tax hike on the wealthy, the Bush tax cut were the worst thing to ever be created, not to mention it was counter intuitive, we start a war and we tax our people less, how do we fund the war? Of course that's going to put us into debt. Now the wealthy will see a marginal 6.5 percent tax increase over the next four years and the rest of the people will see a 2.5 percent tax increase.
All in all we need to be able to fund our fundamentals, which are education and health care. And its not because some grew up poor that it means that they can not attend college. The fastest way to a better life for most is through education. Sure you will have outliers in the mix but for the majority, education is the answer. The world is changing and laughing at the United States. As we bicker amongst ourselves over policy that should have ingrained long ago countries are outperforming us. And that is the change that needs to take place now.
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