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The Rush To "The Cliff," The Deception vs Unspoken Alternatives

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-        I will advocate as well for the prompt repeal of The Commodity Futures Modernization Act of 2000, which opened the door to the world of Credit Default Swaps and Credit Default Obligations that gave us the 2008 Wall Street collapse.   To date, there has been essentially no regulation of the banking industry in the wake of the 2008 debacle, as witnessed by the recent (multi-billion dollar) losses at J.P Morgan Chase.

-        I will advocate for equal tax treatment of capital gains and earned income, thus restoring a modicum of equity to our federal tax policy.   I will advocate for elimination of the "carried interest" tax loophole that allows private equity fund and hedge fund partners to claim their earnings as capital gains, thus paying an extremely low tax rate.   This loophole will be eliminated automatically if we restore the current preferred tax treatment of capital gains to that of appropriate marginal income tax rates associated with that of earned income as suggested above.

-        I will advocate for legislation to repeal the tax loophole that allows foreign subsidiaries of U.S. Corporations to avoid paying federal taxes on income generated by foreign operations.

-        I will advocate STRONGLY AGAINST ANY legislation that allows for U.S. corporations and/or their subsidiaries to be granted a "Tax Holiday" in order to return earnings/profits to the U.S. either tax free, or subject only to an outrageously minimal tax. 

 In Order to Secure Social Security

I would recommend:

  • Support legislation that strengthens Social Securities basic tenets as a federally administered retirement, disability and premature death benefit insurance program.
  • Broaden the mandatory participation to include state and local governmental employees not currently participating, at an agreed upon age cutoff.
  • Support legislation making the FICA tax more income progressive by making the first $12,000 of "earned income" (Wages, Salary) exempt from the FICA tax with annual cost of living adjustments.
  • Increase immediately the cap on earnings subject to FICA taxation from the current level of $106,000 to $10,000,000 to be followed by annual adjustments over the next 8 years to a level of $50,000,000.
  • Earnings subject to the FICA tax shall be defined to include both "earned income" as well as "unearned income" among those who are below retirement age.
  • Earned as well as unearned income of Social Security beneficaries over the current retirement age will be exempt from FICA tax up to $80,000 annually for those citizens who are above age 67 with an annual cost of living adjustment for both income and benefits.
  • Those citizens who upon reaching the age of retirement decide against taking Social Security Benefits will be accorded an exemption of FICA tax on the first $120,000 of both earned and unearned income annually.
  • Support legislation instituting some "Means Testing" of benefits at higher "retirement" income levels to include (earned and unearned income).
  • Raise or remove limits on retiree earnings "earned income" based on current definition of the federal retirement age of benefit eligibility.
  • Decrease or eliminate FICA taxation on retiree "earned" income.
  • Support investment of a maximum of 10% of surplus receipts by The Social Security Administration in conservative market investments in an attempt to increase overall earnings on Trust Fund investments.
  • Increase cap on IRA's to $100,000 to encourage savings.
  • Develop a program of federally sponsored defined contribution plans outside of and in addition to Social Security.
  • Act to re-institute federal pay as you go budget rules as a means of controlling federal spending.
  • Act to legislate a timeframe for gradual elimination of the practice of financing federal government deficit spending by "dipping" into The Social Security Trust Fund.

 

Details/Rationale

Twenty years ago give or take,I sat in Delaware Park in the City of Buffalo discussing the way things were headed in America with my good friend Dave Curry.    I postulated that the next great battle would be the "Haves" vs "The Have Nots."   I was not so far off in my points made that day.  The graphs that describe the trends in real income/purchasing power tell the tale. 

In the time since I had that conversation with my friend, the middle class has shrunk dramatically while the fortunes at the very top of the income pyramid have swelled.   I won't bore you with the details...They are self-evident! 

Most Americans are acutely aware that their prospects for income growth have either stagnated or shrunk over the past twenty years.   Unless for example you are engaged in a particular area of the economy where your employment has remained more or less secure such as in my case, health care.  Then you are feeling the crunch.  Although, even those who are physicians are not doing so well financially as they once were due to a number of factors.

If you are a student at any level, you realize that opportunity has become increasingly limited in all sorts of fields that once promised prosperity and security.    Though some who have no reason for concern with their employment and career prospects may cry "The Politics of Envy," more rational consideration depicts our shared dilemma as a system that is completely out of balance.   

The Problem Is: Lack of Demand

Nobel prize winning economists describe a lack of demand as being behind our lagging economy.  Businesses need customers and if those who would aspire to be their customers have not the wherewithal to purchase goods and services produced by a given business, then all concerned suffer the consequences.   

So called "Trickle Down" or "Supply Side" tax policy has been tried for now better than three decades... IT HAS NOT WORKED!   If ONLY we lower the taxes on the top, then and ONLY then will business "create" more jobs.... Simply LUDICROUS!  

The immature thought that someday I just might win the lottery and I don't want to have to pay taxes on my winnings just does NOT hold water and should NOT fly.  But interestingly, a certain relatively significant proportion of our fellow citizens do amazingly believe such propaganda.  I hope that the suggestions that I have made and the rationale upon which they are based and upon which I based my candidacy for congress offer those who have read what I offer, at minimum some food for thought.  Your feedback is invited.  

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I am a Nationally Certified Acute Care Nurse Practitioner/ARNP with an MBA in Health Systems Management and a former financial advisor Series 7 and 63. I was the Democratic Nominee in both 2006 and 2008 for Florida's 5th District U.S House seat in (more...)
 

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It is just the fact that the people in charge are ... by John Russell on Monday, Dec 31, 2012 at 1:36:06 PM
Great article!... by Anita Stewart on Monday, Dec 31, 2012 at 7:35:26 PM
Please be sure to read my New Diary article discus... by John Russell on Tuesday, Jan 1, 2013 at 6:37:31 PM