Wednesday, April 12, 2006

Paying back the debt will not be easy

Paying back the debt will be a lot harder that it was to incur it. Here are a few ideas on how we can start and how much revenue the suggestion will generate annually.

Roll back the Bush Tax Cuts. ($200 billion)

Raise postage rated by three cents ($6 billion)

Cut all pork from the budget ($200 billion)

End the Prescription Drug Plan. ($100 billion)

Impose a 5% national sales tax (Variable but, at least several hundred billion)

Roll back the tax cut on stock dividends (difficult to estimate but, at least several billion)

Increase minimum wage by 15 cents an hour (variable but significant)

Impose a 1o cents a gallon national tax on gasoline. ($13 billion)

Impose a $2 a pack national tax on cigarettes. ($2 billion every year from the tax but, the end goal here is to discourage smoking and cut medical costs later on)

Revenue from these new taxes would cause negative economic impact in the short run but, once the economy adjusts it will not hamper the it at all. Obviously these measures will never pass because in addition to raising taxes on individuals they poke at some powerful lobbying groups including oil. tobacco, and retail. Theses new taxes would give us about a $100 billion surplus. Reducing the deficit is more important than reducing the debt so this would offer a long term solution to our budget problems.

2 comments:

Anonymous said...

Your points are correct. If we had the political will it would be easy to get rid of the deficit. Firstly, we should tax gasoline much more than you suggest. I am talking about doubling the price. Such an increase would be political suicide in the USA but if we did, our gasoline would still be cheaper than in Europe. We would also start driving fuel efficient cars, cease to be energy hogs(the USA consumes 30% of the energy in the world)and remove our dependance on oil imports.
We should also tax heavily all our dependancies - cigarettes, alcohol, gambling (after taking them out of the hands of Indian tribes) and drugs (after legalising them).
Let's leave the tax cuts alone. Those who support the rest of the population are paying a disproportionate amount of taxes as it is. Better let's stop all the legalized tax fiddling and go to a flat tax as a percentage of income for everyone.
At least you can see why I am not in politics. The majority of voters have no interest in removing the deficit, they just want to soak the rich, defined as people having income at least twice their own.

Progressive Pinhead said...

I'd agree that legalizing marijuana-not other drugs, is a good idea for a multitude of reasons but, it is also to politically sensitive to be adopted and I'm not sure I'd agree with your $500 billion figure in increased revenue. Just look at what happend during prohibition, if we would legalize marijauna tax revenue would go up, the cost for fighting trafficers would go down, and I believe that the usage of drugs would also go down. Part of the alure toward illegal drugs is the fact that they are illegal.