Fair Tax Compromise
Cross posted from Facebook:
In the past two elections, the Democrats have picked up 75 seats. It will take some really bad government to reverse this and movement by the Republican Party to the left on both economic and social issues. While oppossing gay marriage may appeal to the older demographic, it won't do well with younger voters, who are growing older and becoming more and more of a majority. What does this all mean? It means compromise is necessary on the Fair Tax should the nation like Mike and elect him President. One of the reasons I voted for Huck is that a compromise between the Fair Tax and what the Democrats would propose looks remarkably like the tax plan I favor, which is similar to the Competitive Tax Plan of Michael Graetz of Yale. Michael of was George H.W. Bush's Director of Tax Policy, so he is hardly a flaming liberal.
Professor Graetz proposes a Value Added Tax combined with a Simplified Income Tax with a $50K individual/$100K family standard deduction. He would also provide the prebate for paying VAT taxes to poor families, the Child Credit and the EITC as an offset to payroll or through a Smart Card.
I suggest going beyond the Graetz prebate to a full up $500 per month per dependent child and spouse tax credit on an expanded Business Income Tax (Graetz would cut the tax rate to 15%) payable by all employers, not just corporations, with labor costs no longer deductible. I would also have this tax cover Unemployment, Survivors Insurance payable to non-retired widows, Disability Insurance and Medicare Taxes. I would also roll any Obama health insurance reform taxes into the Business Income Tax rate and allow any deductions or credits to be made against Business Income Taxes, whether insurance is paid by employers or employees. There would also be education credits for vo-tech, college and remedial adult education arranged by the employer and students or welfare recipients would have to get an employer or religious organization to sponsor them as employees and would be paid to go to school, with some part-time work requirement as well and the full range of tax benefits available to them. This would be in concert with state and local government. There would be no other public assistance.
Old Age and Senior Survivor's Insurance would be privatized, with some of the employer paid portion going to voting stock in the employer, if applicable, as well as a trust fund of similar employee-owned firms. Part of the employee contribution would also be invested in the same way, however the employer contribution would be credited equally, regardless of base wage. Additionally, the base minimum wage would be set to at least $12 per hour so that no one pays their employees solely with tax credits. Because some workers salaries will go down due to the tax credit, the income cap on Social Security contributions will be raised to capture 95% of wage income, thus raising the average. Workers under 35 would be under the new plan, while workers over 35 would stay under the old unless they and their firms opt to convert to the new plan by fully capitalizing all past and current older workers with stock as if they had been in the plan from day one. Firms and employees that take this option would no longer pay FICA retirement taxes.
This plan would reduce the need for government employees while still meeting all of the public purposes set out in current programs. The education and dependent benefit provisions would also take away most incentives to abortion. The benefits should be good enough so that young people in a family way can get married and husbands won't care whether the child who would have been aborted to cover an affair was really their's.