The Ballard Economic Plan

We are in an economic crisis. That is easy to see. As individuals we have overspent our incomes and as a country we have overspent our tax revenue. How are we going to fix this monumental problem? I have a few ideas on how we can solve our mounting economic problems. I am going to call this plan the Ballard Economic Plan. This plan is simple and designed to pay off debt and save money.

The Ballard Economic Plan

A.

The first thing that we need to do is fix our "broken" tax system (our tax system is not really broken, but we are told it is). Many complain that corporations and the wealthy do not pay their "fair" share of the tax burden. Politicians (Democrats mostly) tell us this. Politicians have their opinions and they lie. They like to blur the lines between fact and fiction. You have to realize that their biggest concern is getting your vote, not helping your income. Like I said Politicians lie, numbers don't. Take a look at some of these numbers:

The top 1% of the wage earning population pays 37% of federal tax revenue.

The top 5% pays 57%

The top 10% pays 68%

The top 25% pays a whopping 85% of all federal tax revenue!

Now look at this, the bottom 50% pays a measly 3% of federal tax revenue!

For more information on who pays the taxes go here.

Everyone assumes, falsely, that under the Pres. Bush tax cuts the rich were paying less than everyone else. This could not be further from the truth. The fact is the wealthy pay a higher dollar amount with the Bush tax cuts, than without them. This can happen because the tax cuts allow them to make more money through investments and new business ventures (which creates jobs and more wealth for everyone). This theory comes from the Laffer Curve.

I have two suggestions to help solve our tax issues. Both of these will generate revenue and silence those who don't understand how our current tax system works.

1. Flat Tax. This has been proposed before, but it is not getting the attention that it deserves. Our current tax system is progressive, this means the more you make the more you pay. In a flat tax system everyone pays the same percentage, say 17%. If we went to a flat tax we could get ride of all of the IRS rules and most of the IRS all together. Corporations and the wealthy wouldn't have large tax deductions available that us poor folk don't have access to currently. Everyone pays the same percentage, everything is fair. If you make $30,000 a year you will pay $5,100 in taxes. If you make $200,000 a year you will pay $34,000 in taxes. In this system the wealthy still pay more.


2. Sales Tax. The second option is paying a higher federal sales tax. The state of Texas does not have to rely on an income tax to earn it's tax revenue. Instead there is a higher sales tax. With a higher sales tax and no income tax you only pay tax when you spend money. This means more money in your pocket to begin with. The Sales tax in Texas is 6.25%, this is actually lower than California's which is 7.25% along with an income tax.
   

B.

The second part of my plan would allow large companies to go bankrupt. It is not in the country's best interest to bail out companies that do not have good accounting practices. Companies that are not able to keep their doors open based on their merits should go out of business.

A few things can happen if large companies go out of business. First, a once crowded market is now open for new start-ups. Second, it promotes the idea of accountability, which is slowly going by the wayside. Third, it will actually shorten the recession, which is moving towards a depression. The Great Depression could have been avoided had the government not become so involved with the economy. Growth in government slows the economy.

C.

Allow the president to have Line-Item Veto (view my previous post). This is will allow the president to trim pork barrel spending.

D.

Term limits for Congressmen. Currently congressmen and women are able to serve unlimited terms. There should be a limit here, just like there is for the president. We should not allow these people to make careers in Washington. This creates stagnate waters, which is unfit to drink. Right now too many people are drinking the Kool-Aid that is being sold by our current politicians.


This concludes the Ballard Economic Plan. Additions and Revisions are possible, stay tuned.