When I wrote my book “Trumpocalypse? The Liberal’s Guide to Saving the World,” I wasn’t comfortable with the fact that I didn’t have a tax vision yet and so I went to work on it. What I came up with has me super excited, and I think regardless of how tenable you think it is, it will have you excited too. It’s the dream to replace the current nightmare– Finally. And it is key to the next 15 years of across-the-board American prosperity!
My tax vision starts with raising the personal exemption to $160,000 – – meaning that if I get Congress on my side (and I have a plan for that) nobody will pay federal income tax on the first $160,000 they make for the year. That will exempt 90% of individuals from paying taxes. We will make up the trillion dollars lost in that segment of the population by passing it on to the remaining 10% (those who will pay taxes) in the form of higher taxes (Which they will be happy to pay because we’re giving them something they desperately want for it and cannot have any other way. For real. Keep reading)
The fact is that the government only needs so much money to run– no matter where it gets the money. So from a purely fiscally smart government standpoint, it actually makes more sense to pull all operating expenses from the top of the economy rather than from the bottom or middle. Main reason being: Every dime the government taxes individuals in the lower and middle income brackets is a dime they won’t be spending on goods and services. The kicker is that no matter how much people tell you they would save more if they had more, the reason they (the bottom 90 percent of earners) are the bottom 90 percent and tend to stay there for their whole lives is that they (we) don’t save. We spend – and we like doing it!
So, since we know the bottom 90 percent spends instead of saving, we know that eliminating taxes for them will dramatically increase the demand for goods and services which creates jobs and an economy with more jobs than workers. This is good, because it will force businesses to compete for good workers and that means higher pay: Employers end up having to pay more to keep good workers. Remember where I said that rich people will be happy to pay more in taxes to have this tax plan? Here’s why: By Keeping $1 Trillion in the hands of poor and middle class people, we are actually dumping $1 Trillion dollars per year into demand for goods and services. That means companies get larger– more employees, more assets, and more sales. Everyone’s bottom line goes up. The actual cost to rich folks will be the cost of overhead, because overall the dollars being pulled from the government to run the government will be no more than it is now – unless we later decide to pull enough to balance the budget and run at zero deficit.
We in the lower classes tend to project our own values onto others and assume that rich people horde money because they’re greedy. The reality is that rich people horde money because they are good stewards and they have no place to spend it. They’ll spend the money when it means they are getting what they really crave – and that’s bigger empires– more employees, more buildings, more equipment, more sales! This is the only tax vision that gives them that.
Poor and Middle Class people aren’t, by and large, likely to have any more money at the end of the year than they do now, but they’ll have more stuff, more services, and more satisfaction with their lives.
Now, for every action there is an equal and opposite reaction, so we have to be careful not to create inflation as a result of demand for product – an economic reality known as “demand pull.” The only way to combat that effectively will be an increase in interest rates so that people use their newfound cash-flow increase on commodities rather than large purchases.
My recommendation to the Fed would be to raise interest rates by 2% over 4 years upon the implementation of my tax vision. This would force more people to live within their means, meaning that the increase in expendable income is more likely to be spent on commodities than on large purchases such as homes or vehicles. This is good for our society which has become largely transient– people upgrading houses and cars every three to five years in a mad rush to make it to “the top” only to learn the top’s been moved.
It will mean more people stay put and learn to enjoy life where they are creating a stability base rather than the upwardly mobile, dog eating itself tail – first form of capitalism that we have seen since the Reagan years.
When the small percentage of older people who were fortunate enough to live “the good ol’ days” speak of those times, they are speaking of a time when people lived in their homes for 30-40 years and fixed them up and got to know their neighbors and made a good life in the places they nested rather than using their homes like casino chips to bet on the next big jackpot. The result of all of that upward mobilization is an affordable housing problem we’re going to have to solve in the coming years, but that starts by stopping the hemorrhage of sensible-spending and living within our means as a society. My tax vision won’t guarantee a return to housing sensibility, but it’s certainly a step in the right direction.
Look at your tax forms from last year. How much did you spend in taxes? There’s a 90 percent chance you’re going to personally love my tax vision. Sending me to Washington with a strong mandate will go a long way to making this dream a reality!