The McCain Tax Reform Plan For Long Term Economic Growth?
Politics / US Politics Jul 14, 2008 - 10:04 AM GMTBy: Steve_Selengut
The writing is on the wall (street, that is), and it is telling us that we need to reaffirm the United States as the dominant force in the global economy, and that we have to do more to protect our citizens' retirement and investment programs.
Most economic research suggests that tax code replacement surgery is essential for long-term economic progress. The goal of my plan is to make sure that you are not grumbling ten years from now about the same things that trouble you today. Here's a fifteen-point plan to end the cycles of economic frustration and global disrespect during this administration:
One. Take Social Security out of the public sector and replace it with a mandatory, deferred, fixed benefit, single-life-annuity program managed by existing annuity providers. Employee contributions would be reduced nearly 50% and employer contributions eliminated over a five-year implementation period--- immediately for the self-employed. Participants would have no investment discretion or access to funds until retirement.
Two. Mandate that no less than 50% of all self-directed benefit plan Working Capital be invested in government securities, and not qualified for withdrawal until retirement. Bring all alternative investments (options commodities, futures, hedge funds, etc.) under the purview of the SEC, and subject to the same suitability standards as RIA's recommendations.
Three. Institute a 3% Federal sales tax on all goods and services purchased by end consumers, but not a VAT. Subsidize a universal basic health care insurance system and public education expenses from sales tax proceeds plus a 5% tax on personal annual income, of any kind, in excess of $5 million dollars. Cap State and Local Sales Taxes at 3%. Eliminate all nuisance taxes in utility bills, hotel room charges, gas prices, etc.
Four. Reform Tort Law at every level, and protect both businesses and individuals from frivolous lawsuits. Adopt a rule of personal responsibility for one's own stupidity and clumsiness. Submit all product liability, medical malpractice claims, and personal liability lawsuits to qualified arbitration panels instead of juries. Ban class action suits of all kinds and cap jury awards and lawyer compensation at 50% lower average levels.
Five. Eliminate all Estate and Gift Taxes.
Six. Mandate a ten-year term limitation on all members of congress, retroactively, and impose a mandatory retirement age on Supreme Court Justices. Reduce taxpayer compensated congressional staff by 50%.
Seven. Simplify the Internal Revenue Code by adopting a Fair Tax of 10% for all persons with annual employment income above $40,000. Eliminate all forms of tax deferral and stock option programs that are not available proportionately to every company employee. State and local income taxes would be capped at a flat 4% for family incomes above $80,000. Individual tax avoidance schemes would also be banned--- 10 years retroactively.
Eight. Abolish all taxation on any form of retirement income.
Nine. Abolish all taxation on any form of investment income, including rents, royalties, interest, dividends, and capital gains. Increase the federal sales tax by 2% once numbers 8 and 9 have been implemented.
Ten. Eliminate the Corporate Income Tax and create auditing entities to assure that the savings translate into new jobs, higher salaries for non minimum wage employees, lower product prices, and higher shareholder dividends.
Eleven. Appoint federal supervisors to the Board of Directors of public corporations paying annual salaries in excess of $3 million. Board members, corporate attorneys, and financial officers would be required to allocate any performance incentive compensation on a dollar-for-dollar basis to all employees, including part timers but excluding minimum wage recipients.
Twelve. Examine the economic impact of Government Regulation and oversight in many industries, particularly small business practitioners in personal services fields. Provide an arbitration and review system to identify and control abuses of regulatory power and a separate department within each agency to deal with small businesses.
Thirteen. Reduce government staff in all departments and at all levels by at least 10% per year for the next three to five years. Reduce by 50% the number of Government jobs filled by presidential appointment.
Fourteen. Reduce all import tariffs to zero for countries that reciprocate and who insure the quality of their exports.
Fifteen. Establish a catastrophic relief fund for victims of all forms of natural disaster throughout the USA.
In all instances, regulatory services will be needed to assure implementation consistent with the intent of the new code. Any person or entity that takes advantage of loopholes in the new rules, or manipulates normal operations to match new definitions will be fined. Their legal and tax advisors, if involved, will be responsible for 60% of the fine.
The plan outlined here is investor and economy friendly. Where jobs are lost, new entities will be needed, based on the premise that regulated capitalism can work well. As shoppers and homeowners, as retirees and employees, as business owners and investors, this is the reform plan we need.
Is for real? It could be. Investors represent the biggest voting block in the country. We could elect the next president, change the tax code, fix Social Security, and strengthen the economy. If only we weren't the most apathetic group of people on the planet. As investors, we want less government, lower taxes, and purposeful regulation. We want laws that aid economic freedoms, and lawmakers and judges who facilitate it.
Survey Question: Would you vote for the person with the guts to propose this plan?
By Steve Selengut
800-245-0494
http://www.sancoservices.com
http://www.investmentmanagemen tbooks.com
Professional Portfolio Management since 1979
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"
Disclaimer : Anything presented here is simply the opinion of Steve Selengut and should not be construed as anything else. One of the fascinating things about investing is that there are so many differing approaches, theories, and strategies. We encourage you to do your homework.
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