A 4 point plan for the first 100 days of the Democratic Party Controlled Congress

[papau]

Everyone is offering up to the Democratic Party a multi-point plan in the manner of the GOP’s 1994 Contract with America – just in case the Democrats win both House and Senate in 2006. Well, below is my little “Progressive” 4 point plan for the first 100 days.

1. TAX, BUDGET, AND SOCIAL SECURITY FINANCING

Pass a tax overhaul that rejects consumption tax because a progressive consumption tax is impossible. While folks can find economic literature suggesting a progressive consumption tax would add 5 percent to 10 percent to gross domestic product, that appears to be a one variable analysis in a muti-variable world. The rich have already shown that a luxury item sales tax (which is the way one makes a sales tax progressive) can be easily avoided by the rich - they avoided the 1993 luxury sales tax/excise tax quite nicely, and the tax was repealed because their was minimal revenue being generated by it.

The Democrats must Reject the Tax Code's unlimited preference for income that is earned via investment returns on the money you inherited, and treat capital gains the same as wage income, for the purpose of both of our two income taxes - both the tax based on the Internal Revenue Code, and the other income tax that currently is on wages only - the Social Security payroll tax (which in 1997 will have no tax on the income the rich earn after the first $97.500). This would allow a tax cut for the working man via a reduction in the payroll tax rate (part of the tax cut to be invested in Universal 401ks - see point 3 below). The investment portion of the payroll tax would be picked up via an additional line in the special section already on the tax return that is devoted to giving a credit for paying too much payroll tax.

Congress should promise to balance the federal budget via reduced spending on military toys -cancelingg programs outright, and by returning Government work to Government workers - ending the outsourcing to GOP buddy companies, and by ending "earmarks" (pork for the home district that avoids hearings on the need). The law we had under Clinton on funding new spending by cutting old spending or passing a tax increase is again needed, so a new Gramm-Rudman-Hollings formula like law, which recognizes the failure of the Bush Tax cuts by including a prohibition on Dynamic Scoring of Tax Law Changes, should be passed again.

The Democrats should offer to the GOP, as compensation for the above, a drastic cut-back in Sarbanes-Oxley, where much is now a waste of paper and time. That would bring the Corporations on board - and that is half the base of the GOP (the rich of course being the other half - the fundamentalist religious are just foot soldiers used every 2 years). The Democrats should also offer to the GOP, in compensation for removing the wage cap on the payroll tax and for now including investment income in that tax, a benefit cut in the future via an increase in the Retirement age to 70 beginning when the Regan age change to age 67 is completed. This is logical as people are living longer and it is needed as most folks are treated poorly by their corporation's pension policy so that all that is happening on their pension date is that they are being moved from their current job to a much lower paying job working for someone new.

2. HEALTH CARE SECURITY

Either pass a SINGLE PAYER NATIONAL HEALTH INSURANCE PLAN paid for by a payroll tax on all income, both investment and wage income, of 8%, or instead Expand Medicare by making it available to all legal U.S. residents not covered by an employer-sponsored health plan (albeit total Government payment for the benefit would be as it is now only starting at age 65) paid for via a payroll tax of 8% , with employer plans needing to have a minimum level of benefits equal to Medicare with automatic coverage for all employees if those companies want a credit against the "employer’s share" of the payroll tax. For those that like complicated financing, there is also the possibility of designing financing with a slightly lower rate paid by everyone, but with additional funding coming from the collection of a flat dollar amount, collected via the payroll system, where the flat dollar amount is income related, depending on marital status and family size - a bit more progressive - eh?

3. REPLACE FORMER FAVORED TREATMENT FOR INVESTMENT INCOME UNDER THE INCOME TAX CODE WITH UNIVERSAL 401K'S

All workers would be covered by this 401k like savings plan, whether or not their employer offered a retirement plan, at a mandatory 1% contribution rate plus an additional voluntary rate no higher than an additional 14%, with the money held by the current 401k funding companies in trust for the Federal Government and the employee, with rules for withdrawals following current 401k rules, and tax breaks given to corporations that matched the mandatory rate, with addition credit against the corporate income tax for the monies spent matching all or part of the voluntary rate. The workers 1% would less than the reduction in the current payroll tax that arose from covering all wages and including investment income in the payroll tax.

The sugar on this deal for the clients of the GOP is the fact that there is no dollar limit here - and 15% of a million dollar salary is $150,000 tax free accumulating after giving that rich person a $150,000 tax deduction.

4. EXPAND UNEMPLOYMENT INSURANCE TO MITIGATE GLOBALIZATION

Work with the unions to design an expansion of the wage loss benefits now given under the 2002 Trade Adjustment Assistance so that the program includes workers of all ages hit by outsourcing, and includes in the current workers age 50 and older benefit package benefits for those hit by structural changes in the economy such as the move to automate jobs previously done by humans. The current program benefit is a subsidy of 50% of the difference in wage between old job and new job for the age 50 and older worker for up to 2 years when he takes a job that pays less than the old one (covering old wages only up to $50,000).

[bluerum]

1. Good idea - start the PR campaign now while pubs are slingin mud.

[papau]

2. If I had any power to move it along I would - but the Dem party doesn't seem

to want a party wide set of goals

and if it already has such, they are having a very hard time getting them discussed in the media.

[papau]

3. Of course the above comes after the easy stuff of raising the minimum

wage and the hard stuff of ending the war.

[Jason101]

4. What about Illegal Immigration?

Should it not be a federal criminal offense to employ illegals? No need to deport...they will go home on their own if they can't work.

How about killing all social benefits except immediate life threatening conditions?

We are getting overrun in this country but we will not see the full implications for another 10 years. This is exactly what collapsed the Roman empire.

J

[Quantess]

6. You just said you were living high on the hog on welfare

in another thread.

Try being sincere. People tend to appreciate honesty and consistency. Try it sometime, you might be pleasantly surprised when people take you seriously.

[Jason101]

5. Tax Reform

I agree that tax reform is critical to cleaning up government. While I am a liberal democrat, I have read the opponents liturature and am fully supportive of their "Fair Tax" proposal. I do not think that the ideas are new...they have been around for years. While tax revenue would increase and there would be no effect on the poor, our politicians are fiercely against the fair tax because it basically makes them administrators of government (where they should be) rather than slime bags that buy favors and votes. When confronted on the fair tax, dems and neocons alike just tell you about the 23% federal sales tax. They fail to tell you the full story...that most withholding taxes would be eliminated, corporate taxes eliminated, etc etc. I find that MOST people that I talk to have a very poor understanding of the concepts and that is where our politicians want us to be. I suggest stopping by a book store, grabbing a cup of joe and reading the "Fair Tax Book". It took me just over an hour to read it and that way I didn't have to buy a copy to support that otherwise idiot authors.

[nodular]

7. Good points; but one major contention

Although I have not gotten through your entire post yet, I
find it very interesting and definitely will read the whole
thing.

As will no doubt immediately become clear, I am not a
progressive myself but a centrist.  Though I was born and
raised a Liberal Democrat, I've had my period of doubt about
the Democratic Party and spent some time as a Republican. 
While I am back with the Democrats again, I have learned a lot
 about the Republicans and also am still conservative in some
ways (of course, when I was a Republican, I was still Liberal
in some ways.) 

As far as treating investment income exactly like wage income,
this would be one way to reduce the taxes on wages.  However,
make sure you are aware of a major difference between wage
income and investment income.  Investments are very easily
shifted from one form to another---wages are not.  

Believe it or not, a reduction in taxes on income from stocks
results in greater revenue on taxes from capital gains! This
sounds like right wing nonsense, but there is plenty of data
to prove it, and it has been demonstrated numerous times in
the US.  In fact, people with money have numerous ways to
avoid taxes on capital gains when they become high---and they
use them.  This reduces investment in stocks and reduces
employment.

I know like to sound like a standard Republican here, not
caring about workers just caring about business and
rationalizing it but this is not the case.  due to my
stupidity in dealing with computers, my own ideas are not yet
posted in my own personal idea area, whatever it is called. 
however, they will be posted soon and if you are interested,
you can see how I deviate from a standard conservative view in
favor of workers. 

[nodular]

8. I agree with what appears to be your analysis of Fair Tax

In the early part of your post, you talk about a consumption
tax and the claims being made for it.  I resent I presume you
refer to the Fair Tax people here.  I got to know them fairly
well, and in my opinion, it is a bunch of nonsense.

The Europeans have shifted to a consumption tax system, called
Value Added Tax (VAT).  There is apparently some significant
difference between the VAT
 and the Fair Tax, but I can't remember it.  I happenned to be
present in the audience at the first of President Bush's
debates on reforming the tax system, which occurred in
Washington, DC in the winter of 2005.  One of the interesting
things was that the Fair Tax people say that their code will
be simple and free of "politics".  One of the panel
participants in the debate pointed out that the European VAT
system has just as many weird exceptions and political special
interest and additions at our income tax system does.  The
difference comes not from the difference between Fair Tax and
income tax but the difference between theory and reality.