The Debt Commission Proposal and Common Sense

This week the Debt Commission released its preliminary findings and suggestions and as many said, there’s something in it to offend just about everyone. I am one of those people.

As usual, this proposal hits a disproportionate population. The top earners in this country already pay close to 40 percent of the taxes. This hits them even harder. The Commission also calls to eliminate several tax deductions the middle class utilizes regularly, such as the mortgage interest deduction and the child deduction. They have also proposed a 15 cent increase on the gas tax. They are claiming that this is not their complete findings, but a way to start a conversation.

This hits the middle class hard. Unless you live in a major metro area like New York City, you have to drive to work. While the mortgage interest deduction isn’t huge, it is a nice incentive to those who purchase a home. The so-called rich already pay a ridiculous amount of taxes and they are more often than not the small business owners who work to grow their businesses and create jobs. Additionally, while they pay into social programs the most, the large majority will never utilize the programs they fund.

I still say people are overlooking some key points. First, we need to go back to some core principals. Should the federal government really be providing healthcare, a retirement fun (i.e, Social Security) and other social programs? I say no. For example, if Social Security is cut, that can put a substantial amount of money back in people’s pockets, which they will have the option to put back into the market through product purchases, save for a down payment on a home or save in their own retirement fund.

When it comes to healthcare, we should absolutely provide whatever care our vets need. Period. However, Medicare and Medicaid should be eliminated over the long-term so as to not jar our current elderly that rely on those programs. Instead, how about allowing individuals to purchase health insurance over state lines in order to find the most competitive price? This allows the free market to be more competitive so individuals can shop and compare to find what they need.

There needs to be a limit to what social assistance individuals receive. We have all  heard of families on Welfare for generations and the current idea being floated around Washington to have open-ended unemployment. I believe this nation should provide a hand-up, not a hand-out. Give people the tools to learn a skill, get a job and take pride in themselves by becoming a contributing member of society, and ultimately pay taxes to help sustain the nation.

I also believe illegal aliens are sucking up a huge amount of local, state and federal resources. From having to educate illegal children to  employers not checking identification to ensure they are hiring legal Americans. There should be stiff penalties for companies who hire illegal aliens and we need a tougher immigration policy. This directly affects the size of different programs and the costs associated with them.

I also think we should consider going back to the gold standard. Prior to the gold standard, we had no debt. It forced the government to live within their means and set a budget. Just like families all over America. There were times in the past it was suspended, such as during the Civil War, but it was reinstated.

Finally, I still say we should go to the Flat Tax (also called the Fair Tax by some). This makes sure everyone plays an active role in keeping our government moving forward. Currently, close to 50 percent of Americans do not pay income taxes of any kind. They have no personal stake in the federal government. I find this completely unacceptable. This would eliminate the IRS, saving millions upon millions while taking in more taxes from the population. According to individuals like Tim Geithner and Charles Wrangel who have claimed ignorance due to the complicated tax code. Why not simplify that code by using the Flat Tax? Problem solved.

Now I am hardly a financial scholar, but I think we as a nation are making a huge push to find common sense solutions to these seemingly complicated problems. Sometimes the answers are right in front of us if we have the intestinal fortitude to take the step and develop them into real solutions.

A Tax Reminder for Both State and Federal Governments

A recent study done by the Center on Wealth and Philanthropy at Boston College has found that between 2004 and 2008, wealthy households left the Garden State at an alarming rate. The study was reported on this week on NJ.com.

New Jersey lost $70 billion during the studied time period. Where did they go? States with more favorable tax laws like Florida and Pennsylvania. The bigger issue is that the wealth is not being replaced.

Between 1999 and 2004 there was a huge influx of wealth into New Jersey of $98 billion. So why the mass exodus? Economists concluded that the issue is directly related to the changes to the tax structure in the state, which included increases in property taxes, sales tax, income tax and the so-called “millionaire’s tax.”

Many will say this is just greedy rich people not wanting to pay their fair share. Well, I completely disagree. What was happening was a pure redistribution of wealth. What governments either fail to see or refuse to realize is that the wealthy people are generally the ones that own companies, create jobs and hire people for those jobs. By unfairly taxing the wealthy, the government has put the entire future of New Jersey in jeopardy.

These findings reinforce an earlier study conducted at Rutgers by Jim Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University and fellow Rutgers professor Joseph Seneca. According to Hughes, the top one percent of New Jersey’s residents pay more than 40 percent of the taxes.

So why should other states and the federal government care about this study? Well, they should consider this a shot across the bow that people are sick of being overtaxed. The government needs to stay out of people’s lives and eliminate the nanny state they have created. I think the IRS should be put out of business and everyone should move to a flat tax model (one the main reasons I supported Mike Huckabee for President and Steve Lonegan for Governor).

Why will people want to be successful and entrepreneurial if all that will happen is they get stuck paying a bigger and bigger tax bill? This is what my husband so aptly refers to as the “sea of mediocrity,” which is exactly what this country was not founded on and certainly doesn’t need now. We need people willing to strive for success. Instead of the government demonizing these people, they should be working to help them succeed.

So be warned state and federal governments. Don’t make the same mistakes the state I love has made.