Can Tax Reform moderate impact of approaching Wiedemer AfterShock Economy?
Pro private economy growth tax reform can strengthen our economy and generate additional Treasury revenues. It can also change the US mindset from seeking more entitlements to greater entrepreneurial and personal initiatives to seek economic success. In the process this leads to more long term jobs growth. At a minimum it will position the US in a much needed mindset shift as the Aftershock Economy approaches. Yes – current (as of Dec 22) fiscal cliff alternatives will result in a $ collapse and soon after that a debt restructuring imposed by our foreign creditors.
Once this occurs (by early 2015?), the US will be able to recover quicker if our mindset is much more entrepreneurial minded than Nanny State minded.
On December 17, The Times of Trenton published my letter calling for tax reform via the Fair Tax now in Congress as HR 25. The link and content are below. For more about the AfterShock Economy please reference several articles about and book reviews of Robert Wiedemer’s three NY Times best seller books about the pending AfterShock Economy in https://economics501.wordpress.com/category/aftershock-economy/
Times of Trenton Letter
FairTax rewards, encourages success
I agree with the conclusion of the letter “Entitlements cometh before a fall” (Dec. 12) that the entitlement culture election victory last Nov. 6 will be short-lived. Our national debt is exploding as a result of entitlement growth. A day of reckoning is rapidly approaching, when foreign creditors will likely balk at financing our debt. If present trends persist, results will be a dollar collapse and an economic debacle worse than the 2008-2009 Great Recession.
What, then, can we do right now to avert economic catastrophe? Means-testing entitlements is one answer. However, what about growing the economy to significantly generate long-term Treasury revenue growth to reduce the debt?
Tax reform is a significant measure. At present, our tax code requires $30 of compliance and administrative costs for every $100 collected in revenue from individual taxpayers. Also, almost $1 trillion of dubious-at-best tax breaks are now rendered that likely detract from the GDP. Finally, the current tax code punishes success (income). This depresses true GDP potential.
The FairTax (in Congress as HR25) eliminates these wasteful $1 trillion tax breaks. It can be set up to fully fund all core entitlements and more. Eliminating $430 billion in annual compliance costs further helps in this regard. The FairTax rewards success and encourages more of this, thus generating stronger economic growth. It replaces all personal and corporate federal income and payroll taxes with a consumption tax. It is progressive via “prebates” to anyone who earns up to the poverty level. I encourage everyone to research the FairTax further at FairTax.org.
Fantastic site regarding the Fair Tax – www.returntoexcellence.net. Click on Fair Tax.
Follow me Twitter @Economics501