This solution is in the "What if..." category.
I propose that we eliminate the current unfathomable tax code and...
1 - institute a flat 10% federal tax on all income over $20,000 with absolutely no other deductions or exemptions allowed, income under $20,000 would not be taxed.
2 - institute an additional 10% flat tax on income over $50,000 a year, no other deductions or exemptions, to pay the interest on our national debt and to begin paying down our national debt, income under $50,000 would not be taxed.
3 - increase FICA tax to 10% each for employee and matching employer contribution to cover Social Security and Medicare and eliminate the contribution ceiling of $106,000 plus. A ceiling for collecting SS upon retirement would need to be determined (means testing, so that truly needy receive support). The gradual increase of age eligibility for retirement would also need to be reevaluated.
The federal budget would need to be cut to match the revenue collected by tax #1 and tax #2. Would this hurt existing programs and current appropriations? It absolutely would, but Social Security and Medicare would be out of the equation entirely. Currently the interest paid on our national debt constitutes over 18% of our federal budget and will increase annually unless we start paying down the principle and borrow no more. Tax #2 would be used to pay the interest each year and to begin paying off what we owe to domestic and foreign lenders.
I realize this is simplistic, but some modification of this plan or something like it is necessary for our nation not to face economic collapse by mid-century.
