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Tax Plan Proposal For an “Innovation Economy”


After reviewing the tax plans of each of the GOP Presidential Candidates, I decided to try to craft a plan which I think will accomplish five major objectives:

  1. Create an “Innovation Economy”
    1. Economy which rewards Entrepreneurs, Landowners & Businesses who invest in the U.S.
  2. Maximize U.S. economic growth
    1. GDP Growth, Capital Investment Growth, Wage Growth, & New Job Creation
  3. Cut taxes for every single income class
    1. Focusing the largest cuts on those who are most likely to pump it back into the economy
  4. Reduce the size of the Internal Revenue Service
    1. Make it so that every single individual can do taxes on just one form
  5. Incentives for Top Earners to drive extra money into the economy in the most productive way
    1. Make it more profitable to start small businesses, and invest in real estate

I, of course, also have the advantage of not needing to craft a plan that can get me elected, so I am simply trying to build a tax plan that will accomplish those five goals, regardless of how the ideas would play on the campaign trail.

Highlights of the Innovation Economy Tax Plan

Eliminates Corporate Income Tax

Creates a two-tier “Business Transfer Tax” or Value-Added Tax (VAT):  16% and 25%

Enacts a one-time deemed Repatriation tax of 5% on all foreign profits currently deferred

Rental Property, and commercial property, Income would no longer be taxable

Reduces seven Individual Income Tax Brackets down to two:  10% and 25% (Progressive Tax)

Increases Standard Deduction to $25,000

Eliminates all Itemized Deductions and Tax Credits

Eliminates payroll tax

Eliminates Alternative Minimum Tax

Eliminates 3.8% Net Investment Income Tax

Eliminates 0.9% Medicare Surtax

Eliminates Estate Tax

 

 

Replace Corporate Income Tax with Two-Tiered Business Transfer Tax (VAT)

In order to boost GDP, Increase wage growth, and drive new incremental job growth, the United States must lower the tax burden on our nation’s businesses.  At the same time, we must discourage businesses from moving operations overseas, and try to drive as much of the enhanced economic benefit back to people within our borders.  For this reason, I am proposing a two-tier tax Business Transfer Tax.  Businesses who adhere to two simple rules, outlined below, will qualify for the 16% Tax Bracket, those who don’t will qualify for the 25% Tax Bracket:

  1. 90% of employees must be based in the United States
  2. 90% of Capital Investment must be spent inside of the United States

Companies would put in an application every three years, which would examine the past three years.  If they have met the requirements for the past three years, they would be pre-approved for the next three years.  If they are determined to have not met the requirements for the past three years, their pre-approval application would be declined.  If they had been pre-approved in the past, and it is determined that they did not meet the requirements over that 3-year span, they would be given a tax bill for the three years worth of tax breaks which they did not earn.

This is a unique proposal, which will drive specific behaviors among businesses in the United States.  This proposal would do a number of things to jumpstart the Innovation Economy inside the USA:

  1. Heavy Capital Investment Industries would benefit
    1. Tooling Companies, and even U.S. Based Software Outsourcing companies
  2. Less Outsourcing across every industry
    1. Companies near the 90% mark will pull back employees, or outsource less in the future
  3. This will create thousands of small businesses
    1. Lower tax rates for entrepreneurs will lead to more new small business start-ups
  4. Top-Earners will turn towards creating businesses to shield taxes
    1. Higher Capital Gains rates for top earners, so they will invest in business start-ups
  5. This move will boost GDP and create a maximum number of Net Incremental Jobs
    1. Important metric increases by incenting companies, & top earners, to invest in America

Enacts a one-time deemed Repatriation tax of 5% on all foreign profits currently deferred

There are $2.1 Trillion dollars of profits currently being held offshore.  If all of those profits came back to the U.S. today, it would result in several hundreds of billions of dollars in tax revenue, and make investment in the U.S. much easier to accomplish for many companies.  Since it is so expensive to repatriate these profits, that will never happen.  This plan is simple, earning $50 – $100 Billion now, and causing a massive influx of dollars into the American Economy, is better than continuing to incent companies to keep their profits overseas by making it cost-prohibitive to bring the dollars back to America.

This plan advocates a one-time 5% Repatriation fee, that will be good for a period of two years, so that companies can repatriate their profits in an orderly fashion.  Most companies will take advantage of this, because it is such a steal of a deal from a tax perspective.  The two-year timeframe will allow companies to plan out the additional tax expense, and the plan will result in a huge influx of dollars into the U.S. economy. This influx, in conjunction with the tax incentives for investing in U.S. CapEx, will cause unprecedented GDP and Job Growth at the very beginning of this plan, which will make it easy to surpass current Presidential Plans in the traditional 10-year view that the Tax Foundation takes when analyzing the plans.

Rental Property, and commercial property, Income would no longer be taxable

This is one of the most controversial portions of the plan.  The idea here is that by taking away the Mortgage Interest exemption (explained later), the housing market could suffer.  This part of the plan will eliminate that concern, along with making it easier for ordinary Americans to prosper in Real Estate, while also making taxes simpler (and therefore, be able to shrink the IRS), all while giving the top earners a place to invest their money which will benefit everyone in the American Economy.

Here is how it would work.  There would be no taxes on any income made through rental property, or commercial property ownership.  This, of course, will increase the ownership of rental property across America.  It will also likely lower the average rent paid (through more competition, and less need for higher profits to offset the tax burden).  This, in conjunction with the removal of the Mortgage Interest Tax Deduction, will drive a disparity between the cost of renting a home, and the cost of owning a home.  Some will say that this is just another way to drive a wedge between the lower class, and the upper class, but the actual effect would be that both classes prosper (along with the middle class).  The lower class benefits from lower rents through increased competition, and less need to offset the tax burden.  The middle class benefits because entry-level housing will need to become cheaper to compete with the new lower top tier of rental prices (along with less need to offset the tax burden.  The upper class benefits because they can participate in the rental market by making a tax-free profit, while helping the lower class live cheaper than they do today.  It is literally a win-win-win.

How will this affect the overall economy?  The lower class will have more money to spend (due to lower rent).  They tend to spend their excess dollars, so this will instantly pump back into GDP, which will be good for businesses.  The middle class will benefit the most from the Net Incremental Jobs which will be created through the higher GDP.  The upper class will try to avoid the higher tax rate on Capital Gains, and will dump lots of excess money into real estate, which will cause a real estate boom throughout the country.  This will directly help the middle class, as studies have shown that in suburbs over 100,000 people (where most of the middle class resides), cities still have between 19% and 25% of the land sits vacant.  This is land that the top earners can purchase to expand the city’s population, or invest in commercial real estate to bring new jobs to the city, but will likely result in very strong momentum on both fronts.

Individual Income Tax Brackets

Consolidate the 7 current individual tax brackets into two brackets:  10% and 25%.  Everyone making under $200,000/year would fall into the 10%.  Once you have exceeded the $200,000 income level, you would be taxed at 25% thereafter (so, this would be a progressive tax bracket).  All income will be taxed the same, whether it is payroll income, short term capital gains, or long term capital gains.  This plan will result in an overall tax rate drop for every single one of the 7 current tax brackets, which we will discuss later.

Standard Deduction

Increase the current standard deduction from $6,300/person to $25,000/person.  This increase will affect all taxpayers, but will the largest positive affect in the lowest tax bracket.  This is important, as we have discussed, because these folks are the most likely to pump the money directly back into the economy the quickest.

Itemized Deductions & Tax Credits

All Itemized Deductions and Tax Credits would be eliminated.  It is important to note that this includes the Child Tax Credit, and the Earned Income Tax Credit, the Mortgage Interest Tax Deduction, and the Charitable Giving Tax Deduction, all of which most candidates keep in their tax plans.  These Tax Credits and Deductions, which the candidates have kept in their plans, cost taxpayers nearly $250B/year in lost tax revenue.

Earned Income Tax Credit

With the proposed increase in the standard deduction, the lowest income brackets are already receiving drastic tax decreases, and the EITC would only reduce tax liability for couples earning $50,000 or more (right around where the EITC phases out today anyway).  For this reason, there is no real reason to keep the EITC in place, as we have already brought their Federal Tax Burden down to 0%.

Child Tax Credit

Again, after the Standard Deduction increase, this tax break would affect mostly the middle and upper income tiers, and the argument for this Tax Credit is typically the lower-income individuals/families.  Since we are lowering the tax burden for every income bracket, we should take advantage of that to eliminate all tax credits, so that we may move to a much more simple tax process, and thereby shrink the size of the IRS significantly.  The folks who are losing this benefit would be paying dramatically less taxes than they are today, and will not miss its effects.

Mortgage Interest Tax Deduction

This is probably the most controversial Tax Deduction omission.  Many Americans would balk at the thought of eliminating this Tax Break.  However, most people think they get a lot more benefit than they do.  Take a family of four, who is in the 15% tax bracket with a $200,000 home, and a 5% loan.  This family only pays $10,000 in Mortgage Interest per year, and their 15% tax bracket means that the entire benefit from this deduction is only $1,500.  Meanwhile, the drastic increase in the Standard Deduction more than offsets any benefit this family will get from the Mortgage Interest Tax Deduction.  In fact, in this plan, the folks at the highest tax brackets would benefit the most from this deduction, and therefore, it is deemed unnecessary.  Some people will argue that removing this deduction will have a negative effect on the housing market.  I would argue that it will bring the housing market to equilibrium, especially in conjunction with the new tax treatment of rental properties, proposed earlier in the plan.

Folks who probably should not be purchasing a house, but do so because they are told the tax credit is worth it, will now make smarter decisions.  Folks who don’t need a mortgage, but take one out to utilize the tax deduction, will now be less leveraged.  Folks who buy a house just a little beyond their means, using the tax deduction as their reason, will now make better budgetary decisions.  In addition, the new tax treatment of rentals will make renting much more affordable, and will shift people from the fence between buying and renting, making it a much easier decision for the majority of families.

After a few years, the market will completely stabilize, and people will be smarter when it comes to home purchases.  The removal of this deduction will likely stabilize the market, making huge ebbs and flows in prices less likely to occur, as Congress will be less likely to use this deduction as a tool in order to drive artificial dollars into the economy.  Also, with the rental property tax exemption, mentioned earlier, the housing market is more likely to surge, than it is to dip.  The balance between renters and homeowners will just shift accordingly, and appropriately.

Charitable Giving Tax Deduction

This is another tax break that people think is bigger than it really is.  Take the same family, except that they are earning more income (making $100,000/year), and tithing 10% of their income.  This family is giving away $10,000/year, and is now in the 25% tax bracket.  They would get a tax benefit of $2,500.  Again, the lofty standard deduction increase would more than make up for any lost income from this tax credit.  Once again, this tax credit primarily benefits the rich.  The argument can be made that charitable giving will go down if this deduction is removed, but I would argue that the economic benefits from this plan will put more money in people’s pockets, and charitable giving will go up as a result.  After all, giving away $10,000 to save $2,500 in taxes is not a fantastic financial move, it is clear that the motivation for giving stretches beyond the tax break.

Eliminate The Estate Tax

This plan is designed to pump as much money into the economy as possible, resulting in more jobs, higher GDP, more corporate investment, and higher wage growth.  All of that should result in people passing away with larger nest eggs than we have seen in previous generations.  The Estate Tax has been a hot button issue for politicians for years, and one which they like to manipulate (or demonize) in order to get votes during election years.  The idea here is simple:  Your debt has already been paid.  This plan already has the wealthy folks paying a lot more than the everyday folks, and has eliminated every way that the rich folks can get out of paying their fair share.  Waiving the Estate Tax gives people a reason to continue to try to build wealth, which is a key component of the Innovation Economy.  Removing this tax keeps incentives in place for people to work harder, and longer, and will ultimately pay for itself in the form of the economy creating more jobs due to the American Spirit of Innovation.  Also, it is just dirty to have someone work hard to save money all their life, and have their kids watch as the government steals their parent’s hard-earned money before the body is even cold.  That should not be the role of Government in the greatest country in the world.

Summary

In the end, it is clear that this would be a drastic change from today’s tax code, but it would accomplish the five goals we set out to at the beginning of the argument:

  1. Create an “Innovation Economy”
    1. Economy which rewards Entrepreneurs, Landowners & Businesses who invest in the U.S.
  2. Maximize U.S. economic growth
    1. GDP Growth, Capital Investment Growth, Wage Growth, & New Job Creation
  3. Cut taxes for every single income class
    1. Focusing the largest cuts on those who are most likely to pump it back into the economy
  4. Reduce the size of the Internal Revenue Service
    1. Make it so that every single individual can do taxes on just one form
  5. Incentives for Top Earners to drive extra money into the economy in the most productive way
    1. Make it more profitable to start small businesses, and invest in real estate

Reason To Believe

While the Tax Foundation would have to run this plan through one of its massive analysis tools to determine the economic effects over the next 10 years, I decided to include some reasons to believe.

The plan was based off of Ted Cruz’s Flat Tax proposal, then altered from there.  I am going to try to value some puts/takes to see how the final financials would play out.

  1. Eliminating all Tax Credits and Tax Deductions: +$250B/year positive vs. Ted Cruz’s Plan
    1. Adding up the approx. costs of EITC, Mortgage, Child Tax Credit, Charitable Deductions
  2. 2ndIncome Tax Bracket of 25% (5,000 HH in the U.S.): +$175B/year positive vs. Ted Cruz’s Plan
    1. + $125B/year for higher income earners (top 3% of HH in the country)
    2. + $50B/year for higher Capital Gains Tax Rates for higher earners
  3. Higher 25% Business Transfer Tax Income Tier: + $300B/year positive vs. Ted Cruz’s Plan
  4. Lower 16% Business Transfer Tax Income Tier: $0B/year equal vs. Ted Cruz’s Plan
  5. Repeal Estate Tax: $0B/year equal vs. Ted Cruz’s Plan
  6. No Rental Income Taxes: – $25B/year negative vs. Ted Cruz’s Plan
  7. 5% Repatriation Tax: 1-time + $50B Was not factored into the Tax Foundation’s analysis
  8. Increase the Standard Deduction: – $700B/year negative vs. Ted Cruz’s Plan

In total, using these rough calculations, this plan would cost approximately the same as Ted Cruz’s plan, which was estimated to create 4.2M jobs, but still costs around $700B over the next ten years.  However, the enhanced Repatriation benefit (which was not even valued in the Tax Foundation’s analysis of the Cruz plan), the US-Investment based lower Business Transfer Tax incentive, the Rental Income Tax Repeal, and the higher Standard Deduction will all drive economic growth at the very beginning of this plan, and should make up more than the $700B deficit over the next ten years.  As with any tax plan, this would need to be implemented in conjunction with spending cuts to offset any potential cost of the plan, if it were found not to be overall neutral.

This is the type of innovative tax plan that will allow us to boost Innovation, drive U.S. Economic Growth, reduce the size of the IRS, and lower taxes across the board for every citizen.  It would be hard to implement, but the benefits would be felt for years to come.

 

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Calling all Conservatives: Would you rather vote for the GOP, or this new Political Party?


Ever since the Tea Party emerged onto the Political Scene, True Conservatives have been looking for a home to call their own.  The traditional Republican Party has not welcomed us, as the Tea Party has had mixed reviews in the Main Stream Media.  Joining the existing third parties have not been effective, because it is hard to gain meaningful election wins without a major party.  In addition, no one has been able to properly define what a typical “Tea Party Voter” is, so the part has been unable to mobilize nationally.

What if we could change all of that?  What if we could define the ideals of the Tea Party in an easy-to-understand manner, which allowed a very conservative party to cast a wide net of support?

What if we were able to draw supporters of the right-wing Republicans, Fiscally-Conservative Democrats, along with the support of 3rd parties like the Constitution Party, the Natural Law Party, and the Libertarian Party?

What if we had 3 simple rules.  As long as you could follow those rules, you could be a member of the party, and the national party would support your candidacy?

What if the new party’s only three rules were:

1)  Protect the Bill of Rights, and the Constitution of the United States of America

2)  Reduce Tax liability, drastically reduce spending, and work to reduce the National Debt

3)  Social issues should be decided by the 10th Amendment, and all views are welcome within the Party

Can anyone reading this blog post think of a reason why such a party would not garner significant support?  You have a party who protects the Constitution, a party which lowers federal spending, lowers overall taxation, and lowers the National Debt.  And, finally, you have a party who allows you to believe what you want on Social issues, as long as you believe that the individual state legislatures, or that state’s population, should get to decide on the legality of those issues.

This party would allow for a far-right-conservative to vote for a candidate, while at the same time allowing for a Moderate Democrat to vote for the same candidate.  This party could theoretically attract folks from the Constitution Party, while also attracting folks from the Green Party.  In short, a Constitution-protecting candidate, with the latitude to support what social views they want, so long as they support the 10th Amendment, could garner a wide-range of political support.  This party could provide the true third party that the country has been looking for since the days of the Whigs in the mid-1800’s…

For argument’s sake, let’s give this Political Party a name:  The Founder’s Party

If “The Founder’s Party” existed today, could you see yourself voting for them?

Would you be okay with a person who agreed with you on 90% of the issues, but believed the other 10% of the issues should be settled by the representatives of that state, or the people of that state?

How do we go about consolidating the third parties in this great nation?  How do we garner support in the traditional deep-pocketed political machine?  Once a third party has gained credibility, how do we convince them to abandon their specific cause and join our movement to create a true third option in U.S. Politics?

Please share this article if you would like to see such a party enacted in this country!  Thanks!

 

English: William Blount. Signer of the Constit...

English: William Blount. Signer of the Constitution of the United States of America. Deutsch: William Blount. Unterzeichner der Unabhängigkeitserklärung der USA. (Photo credit: Wikipedia)

 

 

ObamaCare – 5 Biggest Lies Told To Pass This Law, and to Reelect The President


Official photographic portrait of US President...

Official photographic portrait of US President Barack Obama (born 4 August 1961; assumed office 20 January 2009) (Photo credit: Wikipedia)

The Affordable Care Act, or ObamaCare, will turn out to be one of the most controversial laws in the history of the United States.  President Obama managed to win a second term based on all of the promises made surrounding ObamaCare, and those promises are rapidly being broken before the law is even fully-implemented.

Here are the five biggest lies that the President told in order to get this law passed, and in order to get reelected:

“If you like your insurance, you can keep it.”

15 million people have lost their insurance.  But, that is not even the biggest part of this lie.  It is estimated that over 100 million people will have their current policies altered by their employers due to ObamaCare changes, which means almost no one gets to keep the insurance that they liked just fine before.

“Let’s be clear, we’re not going to delay the Affordable Care Act”

This was a quote from hours before the government shutdown, for which the Republicans were widely blamed.  A few weeks later, the ObamaCare rollout had gone so badly that Obama reversed course.  It turns out that the Republicans were right, and it was Obama who could have avoided the Government Shutdown, not the other way around.

“Anyone making under $45,960 will qualify for an upfront tax subsidy.”

Anyone making under 4 times the poverty level was supposed to get an upfront tax subsidy.  CNN reports that in the largest cities in nearly every state, many people will not qualify for the subsidy.  For example, a person living in Chicago making $27,400 will not qualify for a subsidy.  A person in Nashville making $25,500 will also not qualify for a subsidy.  Some lies are small, this one is a pretty big one.

“I will not sign a plan that adds a dime to our deficits.”

Obama’s original promise was that the plan would cost $900M over ten years, and the savings would just barely cover those costs, so the plan was breakeven.  Since then, the estimated cost of the plan has ballooned to $2.6 Trillion.  Unfortunately, the revenue has not gone up, so there is no way that this law does not significantly add to the national debt.

“Under my plan, no family making less than $250,000 per year will see any form of tax increase.”

The only reason that the Democrats avoided a filibuster was by using a process called reconciliation, which is specifically only used for budget bills.  There are tons of taxes, and fees, built into ObamaCare.  Examples include the medical device tax, the mandate tax, and harsher penalties on Health Savings Account withdrawals, among others.

$50,000 of income and $315,000 in Credit Card debt – What are you thinking???


Government spending

Government spending (Photo credit: 401(K) 2013)

I think that we can all agree that if we had a friend who only made $50,000 each year, but had $315,000 in credit card debt, we would be worried about that person’s mental health…

If they asked you for help, would you recommend that they work 6 jobs so that they can continue spending the same amount of money and never get out of debt?  Or would you recommend that they take on one extra job while drastically reducing their spending while trying to pay off their credit cards?

Of course, you would likely do the latter.  When you have a spending problem, it is okay to want more income, but controlling your spending is an absolute must in order to get your house back in order.

If the United States Government was a person, they would be this person!

Unfortunately, our government has chosen neither of the options outlined above.  They have basically taken on a few extra hours at work (in the form of more taxes) while deciding to spend even more than ever before (in the form of ObamaCare).

The Democrats have decided that they do not want to cut spending, because they think they can raise enough taxes to get out of this mess.  Here is the truth, they could raise everyone’s taxes by 25% right this second, and use that money solely to pay off the debt, and it would still take 15 years to get back to even.  That doesn’t even count the Trillions of dollars they are adding to the debt each year.

Conclusion:  The debt is too big to tackle by raising revenue without cutting spending.

The Republicans believe that we can stop cut spending, without raising taxes, and get this mess under control.  Here is the truth, in order to make this work, the government would have to cut 90% of its spending for the next 20 years in order to achieve this goal.

Conclusion:  The debt is too big to tackle by cutting spending without raising revenue.

The sooner we can all agree to these simple facts, the sooner we can help our dysfunctional friend get back on their feet.

We do not need conservatives, we do not need liberals, we just need people who know how to do math.  Anyone out there fit that description?

If so…Please, Please, Please run for congress!

This is not about political parties, this is about a person who is riddled in debt looking themselves in the mirror and deciding that today is the day to stop living a lie.  Today is the day when they cut back on what they can live without.  Today is the day when they decide to spend more of their time working hard to make some more money so they can pay off some of their debt.  Today is the day to make a plan, execute a plan, and endure some tough years on their way to achieving the American Dream.

If they don’t, the American dream as we know it will not be available to any one of us in the future…

Socratic Method & The US Federal Income Tax


Cropped image of a Socrates bust for use in ph...

Cropped image of a Socrates bust for use in philosophy-related templates etc. Bust carved by by Victor Wager from a model by Paul Montford, University of Western Australia, Crawley, Western Australia. (Photo credit: Wikipedia)

John:  “Rich people should pay more in taxes and poor people should pay less.”

Socrates:  “How much more should the rich people pay?”

John:  “They should pay their fair share, since they are making so much more than us.”

Socrates:  “Define their fair share for me.”

John:  “Well, if someone makes ten times as much as me, they should pay ten times as much in taxes.”

Socrates:  “How much money do you make John?”

John:  “My wife and I make $45,000 a year.”

Socrates:  “So, if you two paid $10,000 in taxes, someone who makes $450,000 a year should pay $100,000 in taxes?”

John:  “Yes, that sounds about right.”

Socrates:  “Okay, so what I am hearing you say is that people should pay their fair share?”

John:  “Exactly!  I honestly don’t know how anyone could really argue against that point!”

Socrates:  “So, someone who makes $45,000 should not be allowed to pay zero in taxes?”

John:  “Of course not!  Following our logic, they would be paying way less than their fair share.”

Socrates:  “So, if a group of people make 45% of the total income, they should not have to pay over 70% of the taxes?”

John:  “Obviously not.  Following our logic, they would be paying way more than their fair share.

Socrates:  “So, if there was a tax code that forced people who make up 45% of the total income pay over 70% of the taxes AND allows 47% of income-earners to pay zero taxes, that would not be a fair system?”

John:  “Of course not!  That would be way too far in the other direction, you are trying to make me look like a Radical Communist!”

Socrates:  “So, in that system, you would actually want the rich to pay less and the poor to pay more?”

John:  “I guess, if that system was actually in place, I would be arguing for the rich to pay less and the poor to pay more.”

Socrates:  “But John, the system I just described is the current system in the United States.  I thought you said the rich don’t pay enough today?”

John:  “Well…uh…I…hmmm…”

Socrates:  “True wisdom comes to each of us as we realize how little we understand about life, ourselves, and the world around us.”

Michigan Politics: Triple Zero Plan


budget

budget (Photo credit: 401(K) 2013)

In order for Michigan to turn itself around, we need an aggressive strategy to drive more money into the economy on a daily basis.  The first step should be to outline a series of tax reductions that will help every single person in the state, regardless of their situation.  The Triple Zero plan outlines how eliminating the Gas Tax, the Business Income Tax, and the State Property Tax would drastically help boost the economy from day 1.

1)      Eliminate the Gas Tax

  1. Gasoline prices are one of the main drivers of the economy.  Typically, when the economy slows down, gas prices fall. Unfortunately, during the Great Recession, this has not been the case.  By eliminating the Gas Tax, people would instantly pay almost 40 cents less for every gallon that they purchase. This money is small enough on a weekly basis that it would get recycled right back into the economy, providing boosts to local businesses.  The elimination of this tax would help every single person who owns a car, as well as all municipalities who run public transportation programs.

2)      Eliminate the Business Tax

  1. Businesses do not invest during recessions.  Consumer Confidence is down, they don’t know when the economy will turn around, and they typically are having trouble keeping up with their bills.  They don’t invest in jobs, they don’t invest in innovation, and they raise prices of their products/services.  By eliminating the Business Tax entirely, you will give businesses the additional money they need to keep prices steady, hire more people, and invest in the innovation that will help bring about the next economic boom.  Eliminating this tax would help every single business in the state, as well as help drive new businesses to want to leave other states and settle in Michigan.

3)      Eliminate the State Property Tax

  1. Michigan has been one of the hardest hit states in Foreclosures and underwater mortgages.  Yet, the state still charges a hidden property tax (above and beyond what your local municipality charges).  This state will never recover without at least a partial recovery of the housing sector.  By eliminating this tax, you would be putting money back into the homeowner’s hands, lowering the foreclosure rate, and driving Michigan Home Prices upward.

Due to the fact that states have to balance their budgets, we need to decrease spending in order to decrease taxes.  The good news is that the three taxes I have outlined for elimination only make up 14% of the states revenue.  This means that the state will have to cut their budget by 14%, something that almost every single business has had to do during the Great Recession.  By eliminating programs, wasteful spending, and over-regulation, Michigan can eliminate over 14% of its expenditures and make room for these three tax cuts which will drive money back into the economy, increase job openings, raise home prices, and help Michigan emerge from this recession as a stronger, leaner state.

Please share this article with your friends and family in Michigan to help spread awareness on how the Triple Zero plan can help lead us back to prosperity.

Follow me @ToddHagopian for more creative ideas on how we can help turn Michigan around, and share this blog post with your friends and family.  Thanks!

We Need A Balanced Budget Amendment Today!


With the National Debt skyrocketing up over $15 Trillion, with Obama’s 2011 proposed budget threatening to balloon that number to over $25 Trillion by 2025.  My newborn child’s fair share of today’s National Debt is already $45,000.  The average family of four in this country has a $180,000 share of the National Debt.  China is our #1 Debt Holder, and is growing increasingly powerful in dealings between the two countries.  If China were to stop buying our debt and funding our untapped thirst for new spending, the United States economy would be sent into a tailspin.  Do we really want China to have that much power over our economy, our jobs, and our country?

There are three possible solutions to our rising National Debt:

1)       Demand that every American pay $45,000 to the Federal Government today, or raise taxes dramatically in order to accomplish this over the next few years.

2)      Reduce spending to zero for each of the next 6 years.  The Federal Government takes in approx. $2.5 Trillion each year in taxes, so if it spent nothing over the next 6 years, it could come close to eliminating the debt.

3)      Pass a Balanced Budget Amendment and get spending under control immediately.

Obviously, only one of these three “options” is really something that can be implemented.  All 50 states and thousands of cities across the country are forced to balance their budgets every single year.  People and businesses must consistently balance their budgets or face bankruptcy.  Yet, the government routinely spends $1 Trillion more than they take in from taxes each year.

Today, Congress has no incentive to passing any real, meaningful spending reform.  Anything that they vote against is going to be used against them during the next election cycle, and their unlimited checkbook is routinely used to try to drive as much benefit to their district regardless of whether it is good for the country or not.

Passing a Balanced Budget Amendment would force the Federal Government to either increase taxes, or reduce spending – Which are the only two options for balancing the budget.  Your congressperson would have to more than double your income taxes in order to balance the budget without reducing spending…Do you really think they would do that?  Of course not, which is why the Balanced Budget Amendment would force Congress to finally tackle spending reform in a real, meaningful way.

The only good argument against the Balanced Budget Amendment is the perceived need for a blank check in times of emergencies, such as war or a terrorist attack.  Because this argument is valid, I am in favor of a Balanced Budget Amendment with emergency measures that can be implemented in a completely transparent way, so that the American people can determine whether the Congress used the emergency measures properly.

Other than that, there are no good arguments for why the Federal Government should not balance their budget just like every state and city in the country.

If you know of some good arguments against this amendment, I would love to hear from you.  If not, please forward and share this article with your family and friends, and work hard to convince your congressperson that they need to pass the Balanced Budget Amendment today!

Two Things Congress Must Get Done In Order To Get This Economy Going Again!


Over-Regulation is costing the American Public an enormous amount of money.  The costs of these regulations are coming out of the pockets of our small business owners, limiting new business investments, stalling innovation, and keeping this economy buried in the Great Recession.

The total cost of regulations cost the American Economy over $1.75 Trillion dollars each year.  To put that into perspective, ObamaCare is supposed to cost the taxpayers $2.6 Trillion over the next decade, which pales in comparison to the almost $20 Trillion that regulations will cost the American Economy over the exact same period of time.  Conclusion:  Costly over-regulation is set to cost over 500% more than ObamaCare.  What is worse than that?  Most, if not all, of these regulations are never voted on, and are put in place by bureaucrats who have never been elected.

How can we fix this problem?

Who can step in and save the day, eliminate needless regulations, and stop the government from continuing to expand at an alarming rate?

The answer is Congress…Now that you have all let out a groan, since we know that Congress is the last group of people we would ever want to depend on for a task this important, let’s look at the simple steps they could take to take on this issue today.

1)       Use the power they already have:  The 1996 Congressional Review Act allows Congress to review and veto any regulation put in place by the Executive Branch.  This Act is almost never enforced, yet Republicans could block every new regulation that Obama and Co. try to put in place if they wanted.  Republicans need to read this Act (I know…unlikely….but a guy can dream, can’t he?) and enforce this act over and over until the Executive Branch stops trying to force new regulations down our throats.

2)      Vote the REINS Act into place.  Senator Rand Paul has tried to push this legislation, which would make it a law that Congress would have to vote on, and pass, any new regulation that would have over a $100 million impact on the economy.  This would stop bureaucrats who have never been elected from having hundreds of millions of dollars worth of negative impacts on our economy every single year.

Why is this issue so important?  As departments of the government get larger and larger, so do their proposals and regulations.  For example, the most strict ozone regulations, which are currently being considered by the Obama Administration, would cost the American Economy over 7 million jobs and over $1 Trillion dollars a year between 2020 and 2030…

There is another $10 Trillion reasons that this issue is so important…and that is JUST ONE regulation.

Forward and share this with your friends, spread the word on how much over-regulation is costing the taxpayers, and fight to hold your congress accountable to do their jobs and reverse this problem today!

 

Need Wasteful Spending Examples? Use These Examples In Your Political Arguments!


Here is a (short) list of some of the projects that you should quote when making your arguments that government spending has gotten out of control. The next time you are arguing with a big-government individual, drop some of these tidbits at them, then come back and post their response for us here at toddhagopian.com.  This should be fun!  Enjoy!

Wasteful Spending Examples

$600K to study what makes chimps want to throw their feces at each other (I am NOT joking)

$600K study on online dating habits

$200K study on whether tweeting and friending makes you happy

$440K to have attendants push buttons in elevators on capitol hill

$1.3 Billion in farm subsidies checks were sent to Urban addresses…including “farmers” in Beverly Hills, Los Angeles, Miami, Washington DC, and New York City

Over $380 million every year is spent sending politicians and bureaucrats around on non-commercial planes, even though commercial routes exist.

10 years ago, the government owned 430,000 vehicles, and the Grace Commission proposed cutting that number to 215,000 vehicles….the Government now owns 560,000 cars, trucks, and LIMOUSINES!

113K for a video game preservation center in New York

$10 million for a remake of “Sesame Street: (yes…the tv show) for Pakistan

550K for a documentary on how rock music contributed to the fall of the Soviet Union

$600 million has been accidentally paid out to dead federal employees over the last 5 years

China is our biggest debt holder, but we gave them $18 million in foreign aid in 2011

$500K for a study to see if you should trust random people’s tweets on twitter

$1.35 million to train new entrepreneurs sounds good….but it might have been cheaper if it was not in BARBADOS!

$200K for a government version of Farmville (supposedly to teach kids about nutrition)

Other projects include:

A study on whether playing Farmville on facebook helps people have more solid relationships in real life

A study on why the same teams constantly dominate March Madness

A study on whether online dating site users are racist in their dating habits

 

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