phc october 2011
www.phcnews.com
MECHANICAL CONTRACTING
As the U.S. settles into a long, low-growth economic malaise, the need to evolve a meaningful, long-term tax policy moves to the forefront of governmental decision-making sooner rather than later.
assumptions project an improvement back to the 2007 level of a 2% deficit of gross domestic product by 2018. However, this depends on the restoration of taxes to before the 2003 Bush tax cuts, which not only increase revenues on the highest bracket but also on all the other levels, making up the Clinton-era tax code. The CBO also presupposes that the November
“trigger mechanism,” if Congressional agreement can’t be reached, will become national policy. This would then automatically cut back entitlements and the Defense establishment by a large percentage. This conclusion is dubious at best, as far as actually becoming operational. A dramatic change in budget deficit reduction would
entail a massive overhaul encompassing a total review of over-extended government spending, especially the redevelopment of the out-dated tax code.
Relevant tax structure must become central to America’s economic revision
As the U.S. settles into a long, low-
growth economic malaise, the need to evolve a meaningful, long-term tax policy moves to the forefront of governmental decision-making sooner rather than later. As the tides of partisan politics are
making such a monumental change impossible prior to a potential “game- changing” 2012 general election, it should at least focus discussion on a 21st century universal tax approach. This, in effect, should become the centerpiece of the nation’s long-term economic debate. As the situation now stands, the
current U.S. tax policy has never been more convoluted and unfair. President Obama’s dwelling on taxing the highest bracket at the pre-Bush tax-cut level, while keeping all other brackets intact, does nothing more than exacerbate the antagonism of independent businesses in the name of “wealth redistribution.” The large majority of such enterprises
file Sub-chapter S income statements, which integrate their taxable business income with their personal IRS forms. This would impinge on those companies generating $250,000 or more in revenues, a demarcation that the current administration has chosen as the dividing line between the wealthy and those needing greater government protection. It has also created a higher percentage of those paying no federal
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income taxes and a growing number of those receiving unearned income rebates. What should start to enter into the national dialogue
is an overall tax structure that encompasses the huge amount of sub-rosa income that has continually gone untaxed. This oversight has existed ever since the current federal tax system first saw the light of day in 1913. It also inevitably calls for the closing of loopholes that manipulate government fiscal policy. It should also be supplemented by a consumer-based federal sales tax that would catch those affluent elements forming the underground tax avoiders. A necessity for a fair tax, be it a flat tax or one
continuing to be bracket-based, is being demanded by the productive sector of the American economy. They are now more convinced than ever that the government’s current fiscal approach is a rank failure and needs revision, if not replacement, to get the once globally predominant U.S. economic structure to again become viable. l
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