Everyone seems to be talking about the fiscal cliff. It is in the air we breathe these days. So I thought I will also put my two cents into the mix, for whatever it is worth....
Here are my solutions to US' economic woes ---
Tax Carbon. I am very happy to see that there are not as many Hummers on the roads these days as they were a decade ago. May be it is the price at the pump or maybe it is something political? I do not know. But I believe that carbon tax is a kind of consumption tax and need to be levied on every item of consumption. As I said before, Americans are the most wasteful society on this planet and it is time we pay the price for it. If we use it, we should pay for it. Period. This tax will be an incentive for us not to pollute the environment due to our consumption addiction. Why should the whole world pay the price for wasteful consumption? Tax carbon and give the proceeds to the EPA!
Legalize Marijuana. I am so happy to see that Washington and Colorado has legalized marijuana. Shame on you, California! A lot of money is spent by the government prosecuting criminals of marijuana while it does not have any major effect on the planet's well being. This legalizing of marijuana can reduce spending by the government, and if it is taxed (like cigarettes and alcohol), it will bring in revenue too. That is the economic side of things. Legalizing marijuana will not make every person a drug addict - if that was the case Netherlands would have been wiped off the map by now. If only the Federal government could see some sense on this issue. Legalizing marijuana may deliver the death blow to the Mexican/South American drug trade and 'save the planet'! Oh! Wishful thinking on my part....
Decouple Employment from Health Insurance. Last but not the least, I feel that we should not have employers offer health insurance to employees and their families. Yes, I do depend on my husband's employer to cover my health insurance. But that is because I do not have any other choice! Employers should focus on developing the employee as the best person capable of delivering the work product that the company provides in the marketplace. Just as the employer does not provide housing or transportation to its employees, they need not provide health insurance. The way to do that is to eliminate the health-insurance tax write-offs. I heard on the radio that this deduction costs the government about $200 billion per year. It just does not make sense to me. Just as we shop for car insurance in the wide marketplace, why can't we shop for the best health insurance? The employer's 'entitled' health care plans, in my opinion, makes people get better coverage than they need and then use it more often, and as a result drive up the cost of health care for everyone. And yes, I agree that everyone, yes everyone, should have a healthcare insurance policy, no exceptions.
Well, I am no economist. Over the last year, through the presidential run and beyond, the air waves have been incessantly buzzing about the economy. I have listened and formed my own opinions. They are a bit controversial, but I believe that it will help the US (and the world) if followed. I also know that no one cares about what I think. Ha!
Here are my solutions to US' economic woes ---
Tax Consumption not Income. I think making money/ having an income is a good thing. Why would you want to tax that? As a small business, I need to pay payroll taxes when I hire an employee and then that employee also pays taxes on the money he/she makes. What is my incentive to hire if I have to pay a tax to hire? When when you tax something, you tend to reduce the 'sale' of that commodity. We should not tax payroll/ income. Instead, we should tax consumption. Americans are the most wasteful consumers in the world. Here, it is all about buy, consume, and dispose. ("Amrika mein kehte hein - thoda khao, thoda pheko.") That habit needs to be changed if we want to have a sustainable planet. Let's tax the consumption and rein the uncontrolled spending on consumer items. They do this in Canada and Australia, and people still survive there! I will gladly pay 15% extra on a gas guzzling car or a fancy Louis Vuitton suitcase. I vote for the luxury tax, if I want something fancy which is not a basic need, I should pay the premium for it.
Delete / Reduce Corporate Tax. US has the highest corporate tax rate. Every tax season we hear that all the big multinational corporations take their earnings outside of the country. But we, the small businesses, cannot do so. We are stuck in the US with the exorbitant corporate tax. I am not sure how the government thinks that if they tax us more we will help build the economy. If they are thinking that by taxing corporations they are taxing rich people, they are totally wrong. Please tax the rich people directly, not the corporations!
Eliminate the Mortgage Deduction. We own a nice little home in San Diego. And I will admit that it is a stretch for us to pay the mortgage every month. In spite of that, I am for eliminating the homeowners interest deduction on our taxes. I feel that this deduction messes up the calculations of home ownership and subsidizes the acquisition of grander and fancier homes, which in turn leads Americans to lead a life they cannot afford. This deduction supports the consumer culture too. I have grown up in India and also spent couple years in Australia. Both these countries do not have these deductions and the 'dream' of home ownership still stays strong. By the way, why should the 'American Dream' have to be linked with purchase of a home? Why can't it be just a good happy life? When I came to the US, I believed that 'pursuit of happiness' was the key to American success. It is very sad to see that the people and government here believes 'pursuit of home-ownership' is an American right and that you can be a happy American only if you have a home to your name.
Tax Carbon. I am very happy to see that there are not as many Hummers on the roads these days as they were a decade ago. May be it is the price at the pump or maybe it is something political? I do not know. But I believe that carbon tax is a kind of consumption tax and need to be levied on every item of consumption. As I said before, Americans are the most wasteful society on this planet and it is time we pay the price for it. If we use it, we should pay for it. Period. This tax will be an incentive for us not to pollute the environment due to our consumption addiction. Why should the whole world pay the price for wasteful consumption? Tax carbon and give the proceeds to the EPA!
Legalize Marijuana. I am so happy to see that Washington and Colorado has legalized marijuana. Shame on you, California! A lot of money is spent by the government prosecuting criminals of marijuana while it does not have any major effect on the planet's well being. This legalizing of marijuana can reduce spending by the government, and if it is taxed (like cigarettes and alcohol), it will bring in revenue too. That is the economic side of things. Legalizing marijuana will not make every person a drug addict - if that was the case Netherlands would have been wiped off the map by now. If only the Federal government could see some sense on this issue. Legalizing marijuana may deliver the death blow to the Mexican/South American drug trade and 'save the planet'! Oh! Wishful thinking on my part....
Decouple Employment from Health Insurance. Last but not the least, I feel that we should not have employers offer health insurance to employees and their families. Yes, I do depend on my husband's employer to cover my health insurance. But that is because I do not have any other choice! Employers should focus on developing the employee as the best person capable of delivering the work product that the company provides in the marketplace. Just as the employer does not provide housing or transportation to its employees, they need not provide health insurance. The way to do that is to eliminate the health-insurance tax write-offs. I heard on the radio that this deduction costs the government about $200 billion per year. It just does not make sense to me. Just as we shop for car insurance in the wide marketplace, why can't we shop for the best health insurance? The employer's 'entitled' health care plans, in my opinion, makes people get better coverage than they need and then use it more often, and as a result drive up the cost of health care for everyone. And yes, I agree that everyone, yes everyone, should have a healthcare insurance policy, no exceptions.
Well, I am no economist. Over the last year, through the presidential run and beyond, the air waves have been incessantly buzzing about the economy. I have listened and formed my own opinions. They are a bit controversial, but I believe that it will help the US (and the world) if followed. I also know that no one cares about what I think. Ha!
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