Posted by
Andrews on Tuesday, December 18, 2007 11:59:20 AM
I forgot one important part of my proposal: The tax rate.
This part is simple: The congress submits a budget of B dollars and there may have been a shortfall of S dollars last year. We also plan to retire 5% of the national debt of D dollars every year.
So we take the estimated national income of I and calculate:
R=(B+S+(0.05*D))/I
That gives us the rate of taxation. We may want to add 1% or so in case we estimated wrong. Any overpayment can be applied to the next year's budget. Any underpayment will be calculated in the next year's budget.
Assuming that we actually live within the budget, and manage to figure the rate properly (which is why I suggest adding 1% to the calculated rate) we could have the national debt paid off in 20 years.
But better than that, by making the citizens pay for everything as the costs are incurred, and making every citizen pay a percentage based on their income, with no one exempt, we make everyone aware of exactly how much our bloated government is costing them every year.
ADDENDUM ON SOCIAL SECURITY
Until we find a way to do away with social security (or at least reform it somehow), we have two options under my proposal:
1. Social security can continue to be a separate payment, though I would eliminate the withholding of social security as well, and make it a second check, paid quarterly at the same time as other income taxes. (Any shortfalls would have to be included in the national budget.)
2. Social security can be lumped into the rest of the budget and treated as any other entitlement. This is more honest, as, despite the claims otherwise, social security is not "insurance", but is simply a form of welfare based on past earnings. (The courts have agreed with this, saying citizens have no ownership rights in their social security accounts, meaning that, unlike insurance, you have no ownership over the money you have paid in.)
The second scheme has one benefit: By making social security just another budget item, we stop treating it as "something special" and can discuss it as we do any other government expenditure, rather than having to treat it as somehow different from all other expenditures.
TO CLARIFY
Some will doubtless take issue with my statement above that you have ownership interest in other insurance. So let me correct:
Either social security is "insurance" like whole life insurance, or is like term life insurance. In the first case, you have an ownership interest, in the second the insurer has a contractual obligation to you.
Neither is akin to social security. Courts have ruled both that citizens have no ownership in their social security benefits, nor do they have any contractual claims on the government.
So., I should have said," you have neither ownership interest nor contractual rights as you would with other insurance".
Sorry if that confused anyone.