The Bush Tax Cuts and the Alternative Minimum Tax has plagued Us for years, basically because they were all designed poorly, and were set neither to Inflation or the percentage increase in federal debt. The cherished Private Sector of the Republicans would never set their own budget performance in concrete; as they insist that the federal government do. I personally prefer that all the Bush Tax Cuts and the Alternative Minimum Tax structure be abandoned as bad Tax policy, but readjusted with an alternate system granting Tax relief where needed, and relatively nowhere else. I also believe in the need for further Stimulus, but only if it is directed to Those in need of Tax Relief.
The Taxes which functionally everyone pays are Property and Sales Taxes. I previously stated I would allow both the Bush Tax Cuts and the Alternative Minimum Tax to expire, the later taking a proper legislative action. I would allow the Estates Tax to go into effect once more. This is the downside which will make Republican and Business scream. I would placate them with a Tax law reciprocating all tax revenue to States and Localities if they reduced their Sales Tax rates by 2%, and their Property Tax rates by 25%. I do not know exactly what the final price tag would be on this action, but it would basically return the Tax relief to All making less than $200k per year; all the while inciting Consumer Demand and higher tax revenues from Personal Income and Business taxes. I do know the federal government is spending about $1 trillion over tax revenues currently, and will continue this practice ad infinitum into the future under the current residue of Tax policy.
The Property Tax and Sales Tax relief will affect all equally, if not in real amounts. The Tax relief will be granted on a monthly or quarterly basis for the first, and daily for the second; this heightens the willingness to Spend rather than pay off debt as in the arena of some Reverse Income benefit. There is no doubt that the Rich will pay a lot more in Taxation, but there is no indication that the Rich truly increase their Investment portfolios under the current Tax policy. There is actually every indication that the Rich would advance their Investment capacity under the pressures of the higher taxation. There is the argument gaining ground out in the blogosphere that it is time for fiscal frugality, though it holds little Water with a federal government expanding the national debt as rapidly as it has set.
The one thing we Americans cannot afford is maintaining the current structure, which is just as dangerous as the Chinese not expanding their economy. We will go broke, while the Chinese will face Revolution and Starvation. We need Change, and We need it Now, if We expect to counter the troubles ahead. It is not the Time to play Politics. lgl