Obama's Economic Plan Fails Where Reagan's Succeeded

Despite the massive fiscal stimulus our economy remains on the brink of yet another recession with unemployment being the major culprit, a rising deficit, pending federal tax increases, and of course, the Eurozone’s uncertainty lingering in the backdrop. Fundamentally, our economic issues are intertwined with our federal tax system. As 2011 draws to an end, we now realize that 67 tax breaks (Social Security payroll tax, Alternative Minimum tax, etc) may expire on Dec 31st. What we may not realize is that those tax breaks represent just a miniscule section of the 68,000 pages in the IRS’ tax code. As a result, your first paycheck of 2012 will be noticeably smaller, and if the tax code is not corrected, that paycheck will continue to dwindle in the years to come. America’s tax code is an outdated archaic mess, needlessly complex due to deductions, credits, exceptions, and loopholes. It’s no wonder that folks are up in arms. President Reagan recognized the need to reform the Tax code back in 1981 when he proposed the Economic Recovery Tax Act (ERTA), the Reagan tax cuts, a 25% across the board decrease in personal marginal tax rates. Even with the then massive cold war military expense buildup and the subsequent dilution of the Act as enacted, the Reagan tax cuts showed that reducing excessive tax rates stimulates economic growth, reduces tax evasion and tax avoidance schemes, and can actually increase tax revenues from the rich. As to the misguided notion that 99% of Americans support 1% of the rich in tax payments, the truth can be found by Googling "Who pays federal income tax?" a link (below) to the National Taxpayers Union displays the actual stats: The top 1% of the wealthiest income earners pay 38% of US tax revenues, the top 5% pay 59%, the top 10% pay 70%, the top 25% pay 86%, the top 50% pay 97.3% and the bottom 50% pay 2.7% of all federal tax revenues. If you take a further investigative look it becomes clear that once federal spending is taken into consideration, those “1% of wealthiest Americans” are paying vastly more into government and consuming virtually nothing, while the bottom 50% receive the largest amounts of that spending while paying virtually no federal tax. We need tax reform that is fair, simplified, flat, easy to understand and collected from all US citizens above the poverty line, while eliminating income taxes for those below the poverty line. We need to drastically reduce entitlements, lower the corporate tax rate so that the US can regain its competitiveness in the global markets thus reducing our unemployment. We can continue to invest heavily in our country’s security, our educational system, shoring up our borders, deporting illegal aliens involved in criminal activities, drastically cutting entitlements, while withdrawing our military occupation of other countries. We can then begin enjoying a more prosperous era of economic growth and a simplified tax system we can all live with, as Ronald Reagan intended.

Igor Sill of CA 3:36PM December 06, 2011