Thursday, July 30, 2009

Tax Changes to Rescue Social Security, Reduce Income Taxes, Reverse the Deficit, and Enhance the Economy


The deficit is overwhelming, social security will run out of money someday, income taxes are too high, retirement plans are ruined, and the economy needs enhancing. Does the Stimulation Plan have adequate controls over its loans and expenditures? Will it even work? Pray to GOD that it will. The Stimulus Plan needs to be stronger, faster moving, and have such results that it will never be needed again. Following is a plan to supplement the Rescue Plan.


1. Abolish tax exemptions and breaks for every organization, no matter how much good they do, how noble their causes are, or how powerful they are. Absolutely, NO EXCEPTIONS. This includes:
A. Churches and religious organizations: Many of these seem like family enterprises where nepotism rules and the son assumes the top office when his father retires. Added to this is the fact that there have been many corrupt, greedy "preachers" on TV and in publications, bulletins, etc. Then, there is the group of professional religionists, seminar speakers, etc. who have their own gimmicks or themes.
B. Red Cross and other humanitarian organizations: The good, diligent, efficient organizations will survive but will have to make their operations more efficient.
C. Foundations, Museums, and Zoos
D. Non-profit hospitals: Many of these facilities are strongly territorial and use tax exemptions to defend their terrain.
E. Electric, Agriculture, and all Cooperatives: This plan should eliminate, or curtail their periodicals. The publications contain 2, perhaps 3, pep-talk columns, a few recipes, and seem to be trying to be folksy or homey, which really has no benefit. A complete waste of resources.
F. VFW, Jaycees, Rotary, and all Civic Clubs
G. Regional Councils of Government and official associations such as The State Councils of Municipalities, the State Association of County Commissioners, The Regional Council of Sheriffs (or Mayors, City Managers, etc.: These organizations are not elected by the people, however, they siphon off taxpayers dollars by collecting dues, causing money t be spent on travel expenses, etc.
H. Political parties, professional organizations, and unions.
I. Universities and all schools at all levels, to include:

1. Enrollment fee profits

2. Endowments

3. Parking Permit fees

4. Football and sporting event proceeds

5. Concession receipts

6. Vending machine profits

7. Fund raising results
J. Military and Government sales such as commissary, post exchange, officer/NCO clubs, recreational facilities, vending machines, etc. on all government (and postal) facilities. The Military deserves their tax breaks on these, however, a service charge is added to the cost of their groceries and post exchange items. This service charge is applies to morale, recreational, and welfare purchases made by the military installation. This money should go to the U.S. treasury. ALL military needs should be obtained through military appropriations. This might encourage the exchanges and commissaries to reduce prices since the service charge receipts will not be controlled locally.

Before we to to Recommendations 2, a discussion is needed.

As stated above, good, efficient organizations should survive, but they will need to be very diligent. Many inefficient, wasteful, greedy, and hostile organizations will go out of business or shrink in size. Many organizational personnel will be become unemployed, however, the enhanced economy should provide jobs that are more meaningful and truly productive. One benefit may be fewer lobbyists representing special interests.

2. Delete the following tax deductions:
A. Fees paid to companies that prepare tax returns (and also encourage anticipating loans at a high interest rate-usually to those who can least afford it)
B. Tithes, donations, gifts, endowments to all organizations
C. Professional memberships and union dues
D. Memberships in Costco, Sam's, etc.
E. Professional journals and reference books
F. Magazines in lobbies and waiting rooms
G. Interest on home loans. Remember, part of the economic crisis was due to loans that exceeded house values- not the interest.

3. Impose a countrywide tax on mail order and Internet purchases that is comparable with state sales tax rates with the federal treasury receiving 1 or 2% of the proceeds. This enactment will improve local sales throughout the United States because it will take away mail orders and Internet advantage.

4. Clamp down on companies that us America as a market, but have their headquarters elsewhere, such as the Cayman Islands.

5. Permanently abolish the Estate Death Tax on inheritances passed on to family members, but impose a much higher rate for non-relatives, pets, and organizations. Churches and non-profits are in competition against family members for the estates of the deceased. Present tax code provisions place the government on the side of organizations and in an anti-family position.

6. Change income tax rates for individuals and corporations to 10%. Eventually decrease this amount when the deficit, Social Security, and other expenses have stabilized.

7. Impose a 70-80% tax on all punitive lawsuit awards with a portion to be returned to the state and local governments if they are entitled to such. Actual damages would be paid to the victim. This should help discourage frivolous lawsuits and re-affirms a principle: That Government is the punisher of evil doers.

8. As the additional revenue is remitted to the government, they will be allocated to:
A. Reduce individual income taxes
B. Heal Social Security
C. Decrease the deficit
D. Heal Medicare

9. After a few years adjust the taxes and receipts to cover the above and eliminate most corporate taxes and attempt to abolish them completely.

10. After a few more years impose a national sales tax and reduce individual income tax rates by the amount brought in by the sales tax.

COMMENT: The above recommendations are not a complete list of suggested tax changes. In addition to tax code changes there are other areas that need to be addressed. These include a need to reorganize government, eliminate wasteful government practices, enact legislation to protect the consumer, impose stricter rules on corporate governance, and some big problems that could someday dwarf the present situation.