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Responsibility #69
(written June 1993)
To the People of the United States of America:
We continue the fourth postscript to the initial set of 63 RESPONSIBILITY papers.
Taxes/Appropriations/Organization Reform. As promised in the last essay, specific recommendations will be set forward to supersede the President's proposals and the machinations of the Congress for a Deficit Reduction Plan.
1. Adopt the inviolable principles developed in Responsibility # 50 through #52.
2. Transfigure the individual income tax into a flat tax with a "high", uniform, individual exemption. Gross income from all sources be taxable, with no reduction other than the exemption. Implementation effective calendar year 1994. All families or individuals be required to submit a tax return each year, regardless of whether they pay taxes.
A. Flat tax rate to be that projected to preclude a deficit, and to pay an annual share of the total national debt.
B. The amount of the exemption to be somewhat above the national poverty level. For a tax return for a family of four this might be $14,000.
C. Gross income to include all constructively received payments, beyond that previously taxed, without differentiation (wages, salaries, employer benefits of all kinds, executive compensations, interest, dividends, disability income, unemployment compensation, capital gains, social security income, retirement plans distributions, food stamps and other low income transfer payments, etc.).
3. The total national debt be programmed to be paid off, in equal annual amounts over 50 years. New national debts as a consequence of recessions, depressions, major wars, etc., be programmed to be paid off as an additional burden over an appropriate number of years.
4. Tax deferments on all retirement plans, trusts, annuities, etc., cease as of January 1, 1994. In the fiscal year beginning on or after that date, all these entities be required to pay taxes on all previous tax deferred transactions. See Responsibility #54 through #56.
5. Beginning January 1, 1994, distributions from life insurance policies, above cumulative premium payments, be treated as part of gross taxable income. See Responsibility #55.
6. The same flat tax rate be imposed on business, trust, etc., tax returns. Dividends be treated as a business expense, thereby removing the inequitable double taxation on this portion of business income. Direct levies on industries and businesses (resulting from 7. below) be treated as a business expense thereby reducing the profit subject to income tax. See Responsibility #62.
7. The administration and the Congress examine each and every appropriation: first, as candidates for elimination, postponement, or stretching out; second, as to the degree that they qualify as "general welfare". Only to the degree that they qualify as "general welfare", should the appropriations be paid for from federal general revenues.
The remainder of the appropriations should be funded proportionately by levies on the industries, regions, states, cities, etc., according to their share in the benefits. In like manner the costs of government regulatory functions, etc., should be covered by levies on the entities causing the costs. See Responsibility #53. Funds from various revenue sources should be segregated, to be expended only for the purpose for which they were exacted.
To assist the President and Congress in 7. above, it is recommended that short term (unbiased) project teams be brought in to accomplish the mission within a year or two. Unlike the ignored Grace Commission Report, the manner of handling the results of the projects would be such as to insure that they are acted upon, without political party or special interest caused gridlock.
Projects would submit individual reports as soon as their task was complete. Each report would be promptly acted upon by the Congress, with advice from the administration. Concurrently copies of each report would go to each state legislature. Each state legislature would be requested to consider the reports, and pass resolutions concerning the results of each. Each member of Congress would be on the spot to vote in accordance with the closer direction of the people in his state or district, or to answer why at the ballot box.
This would be a good time to cure another federal government deficiency which contributes to deficits, debts, and gridlock. The complaint is frequently made that once Congress passes a law that calls for a government function, there is no end to the resulting organization, or the necessity for continuing appropriations. Federal government departments and agencies should be organized in two categories: permanent (indefinite life) and projects. The latter should have a defined mission and life, subject to change for good cause by Congress. This should be part of the above called for review.
The Chairwoman of the Health Care task force indicated in one of her speeches, that each American would be issued a health care identification card. Regardless of the other aspects of the final health care system that is proposed, it is recommended that instead a "modern", citizen or legal resident, multi-purpose, identification card be employed. Not withstanding the expense arguments, it should encompass the best feasible means of unmistakable identification (e.g., computer chip, computer distinguishable finger print).
Health care is just another justification for this implement. It is needed for many reasons: social security or the Pubius IV recommended replacement mandatory retirement plan, anti-crime, anti-illegal-immigration, anti-underground economy, location of family support deserters, nation-wide awareness of problem drivers, mandatory automobile insurance, Publius IV recommended end-of-poverty program, voter registration, etc.
We will complete the fourth postscript in the next paper with the discussion of International Peace/Welfare Keeping.
Publius IV
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