James Hamilton will always give one almost everything they need to know, and again does an effective Job. First, We are not at any major tipping point by my measure; the business is out there and steady in Demand. It remains that steadiness which holds the problem, as there stands almost no outlook for a return to full employment. The economy could chug along for years at its current rate, but will not get Us the long-term growth desired; especially as We will need a trained labor force in ten years, when We will have a major displacement of trained labor due to Retirement. Here is where our new trouble will appear, and We must get the Young established with Work experience before it happens.
Paul O’Neill and Robert Rubin agree basically with my evaluation, if not my conclusion. I agree with them in their Call for revision of the Tax system in this country. Where We disagree lies in their desire to amend the old system, while I value a replacement system. I am currently contemplating a Percentage Down tax system which I will try to explain in the next paragraph. I will state that revision of the tax code is utterly necessary, from the standpoint of generating the necessary tax revenues if nothing else.
The Percentage Down tax system is relatively simple. It starts with the Tax rate being absolutely fixed in very real terms: The tax is $35,000 on every $100,000 earned in any manner, even Inheritance; Capital Gains at this time eliminated forever. The Tax is reduced 10% for every $10,000 not earned in the first $100,000. The rest of the deductions are structural in nature, and cannot exceed a percentage greater than 20% reduction of the tax rate. Any Dependent will get the Taxpayer a 1% deduction from the declared Tax rate. There will be a Housing allowance granted of 10% if Earnings are less than $100,000 per year. There will be a 5% reduction in the amount paid for Energy Assistance, if Earnings are less than $100,000 per year. All business expenses have been handled by the compilation of final Income, but there is a final Business and labor Deduction of 5%, if final Income has been less than $50,000 per year. This system both simplifies the reportage necessary for Tax filings, but targets specific areas necessary for tax relief. It also brings into range a satisfactory system to provide Stimulus, say with a singular reduction in the total amount paid per $100,000. lgl