From The Real State of the Union

[maxx]

Edited by Ted Halstead of the New America Foundation

The $6,000 solution

The federal gov. gives every child an account of $6,000 invested in some fund to be used for collegem to set up a business, or to buy a first home when the child comes of age. It would be the GI bill for this age and would be called the American Stakeholder Act. In 2004 when this essay was written, the author determined that this would cost $24 B which is about 1/6 what the gov. gives in tax breaks to corporations every year.

[maxx]

Maya MacGuineas [2004] on our tax system

http://www.theatlantic.com/past/docs...macguineas.htm
"...the corporate income tax—whose effects are felt more directly by shareholders than workers—has contributed less and less to overall federal revenues, as changes in the tax code have allowed corporations to shield more and more of their income. At the beginning of World War II the corporate income tax provided almost 50 percent of federal revenues; today it accounts for only 10 percent.

Decreasing the progressivity of certain taxes, and relying more on regressive taxes, shifts the tax burden down the income scale from the rich to the middle class and the working poor. This is exactly what has happened over the past several decades. Since the end of World War II state and local taxes—which are far less progressive than federal taxes—have more than doubled as a share of the American economy, while total federal tax revenues have slightly decreased as a percentage of GDP..."

[maxx]

Spendthrift Nation by M. Calabrese and Maya MacGuineas

"...our private pension system is perverse: it provides the strongest saving incentives to the affluent...

The solution is to give every individual ...a tax-subsidized savings account, regardless of whether his employer sponsors a pension plan.Think of it as gov. facilitated 401[[k); just as employers match contributions by elegible employees, the gov. would match voluntary saving by providing a refundable tax credit that would be deposited directly into workers' accounts. As a tax cut targeted to encourage and reward saving, this fundamental reform of our private pension system has the twin virtue of adding directly to nat. saving [[ since low earners save next to nothing now) and giving strong incentives to those who find it most difficult to save. ...To create an even stronger incentive for saving among those who currently save least, the gov. should provide proportionately larger matches for saving by the bottom half of wage earners. ...even the employers' contributions would be elegivle for fed. matching. ... [it] is analogous to the EITC: rather than make low-wge job creation more expensive for employers, more of the burden of ensuring basic benefits to all should instead by paid for on a progressive basisby society as a whole.

[maxx]

One D Growth by David Friedman

"...When inported products are available at very low prices, as they were from cash-strapped Asian manufacturers in the late 1990s, U.S. productivity can aartificially appear high....The decline in Am. Manu. jobs is not necessarily the result of a surge in productivity...there is reason to believe that is more the product of a policy environment that has been strongly skewed against factories and blue-collar employment...when manu. took a dive beginning inthe late 19990s, the bus./service growth that powered the healthiest phases of the decade's boom slowed too. ...Personal services, such as cutting hair, grow more rapidly ...It's hard to imagine how service-sector expansion can play a role in welath creation if growth in, say, manicurists, exceeds that of engineers [as it did between 1999 and 2003]...As early as 1969, for example, NYC adopted a plan that explicitly called for the systemmatic displacement of the city's "low wage" industrial base by a subsidized "modern" office economy. Over the next 3 decades. this policy stripped 600,000 well-paying manu. jobs from what was once America's largest and most diverse porduction center, replacing them with a small number of professional positions at one extreme and many more low-paying service jobs at the other...manufacturing remains crucial for prosperity. The av. productionn-secotr job creates three times as many additional employment opps as the av. service job. ...The [Bush admin. steel] tariffs were sellectively imposed to benefit firms in elecctoral swing states...Other econ. secotrs deserving of protection---aircraft, plastics, film production---were ignored. ..[this] self-interested approach to trade made it impossible to build widespread support for the tariffs...it was not surprising that the admin. reversed course in the face of an unfavorable ruling by the WTO...we need to ...protect... U.S. companies and workers ....against persistent price competition from countries that are unwilling to assure their citizens a reasonable wage.......abolish the discriminatory state and local bus. incentives , including land-use rules, that have over the past decade incrreasingly favored info age jobs over working- and middle class jobs. The growing pol. influence of New Eonomy corporations transformed tas, land-use, and dev. policies throught much of the country. ..it became virtually impossible for ...a factory ...to secure permits in a timely manner in many communities. Meanwhile, broadband and fiber-optic companies received billions of dollars in tax and other subsidies, leading to the misallocation of some $3 to $4 million in investment capital....maximize the diversity of our economy...

[maxx]

Radical Tax Reform by Maya MacGuineas

We need a tax system that encourages savings and discourages "harmful consumption." Example: Humvee owners should pay an environmental tax. Tax the cost of shipping oil from the Middle East.

Suggestion: A progressive consumption tax. No tax on the first $25,000spent, a 10% tax on spending from $25k-100k and a 15% tax on spending above 100k. No tax on basic necessities.

Eliminate payroll taxes. Slash corporate welfare. Tax estates like income.

Levy taxes on pollution and nonrenewable resource use. Impose spectrum user fees.