Like you, I am a proud American and also want what is good for our country. As you are aware, both the Republican and Democratic parties have let us down over the last 20 years; to the tune of $14 trillion of debt and a greater class division. Tough times like today require out of the box (or political party) thinking. That is what makes a great leader! Quite frankly, no-one has come forward with a solution because the two parties are at the two extremes. I would like to propose a solution where the country is the winner.
For our government to keep spending our children's future, I will not play a part. For the super-rich to continue to get richer at the poor man's expense will only bring the end of America sooner. Therefore, my solution is to focus all our efforts on the small to mid-size business. Let's focus all of our attention on the true economic engine that made our country great to begin with.
My proposal is similar to jump starting a small engine. A small business tax break can be the fuel that gets the engine started. I propose we allow small businesses to skip the employer side of the social security taxes for all the individuals they hire in a 12 month period and receive the tax break for one year as well. As an accountant, I can tell you there are ways to keep it simple in order to avoid fraud.
Simply classify businesses based on their prior year tax returns and allow them that status for one full year. The tax break can be given as a percentage of the increased payroll taxes when compared to the prior year. Such a simple approach can be easily audited and easily calculated in order keep the high priced tax accountants and attorneys out of the picture.
Allow the full payroll tax calculation to continue in order to not penalize the employee's social security benefits. Simply add a line item for a 50% discount of the incremental increase in payroll taxes. True up the final figures at year-end and the process is complete. Use a sliding scale beginning with a 50% discount for small business and down to a 25% discount for mid-size business. Large corporations should be excluded (very important).
Such an approach does not require our government to pump more money into the economy. The lost income will be partially offset by the decrease in the cost of unemployment. In the mean-time, our government should continue to reign in out of control spending but that's for another day. The end goal should be the jump start of our economic engine and the incremental income tax will begin to flow a year later.
Winners include the very businesses we help as spending begins to increase almost immediately. Unemployment should either stabilize or begin to drop. This is dependent on how bad things really are today. I'll take a stable unemployment rate over and increasing one. Being a realist, I understand it won't be an overnight success. The hopes are that the Democrats and Republicans begin to understand we can't live in either extremes and begin to work together for a better long-term solution.
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