"Peter E. Pflaum, Ph.D. Institute for Human Resources (904) 428-9609
[EMAIL PROTECTED] [EMAIL PROTECTED]"
[EMAIL PROTECTED]
[EMAIL PROTECTED]
RE: Simple plan to Means test benefits:
Median Income (Percentile)
100% of income (no benefit)
75 % of income \50% benefit level
\
50 % of income \
Benefit level 100%
BL=B - ((P-M) * 2)
Benefit Level (%) = Benefit -((Percentile - 50%) * 2)
0=benefit * -((100-50) *2) [benefit - 100%]
2%= benefit * -((99-50) * 2) [benefit - 98%]
50% benefit level = Benefit - *((75 percentile - 50) *2
50% = benefit - *((75 -50) * 2
100% = benefit - *((50- 50) * 2
Percentile = ratio of household income to national
average (50%) or median income about $35,000 gets 100%,
$75,000 gets 50%, $250,000 get none. Benefits to be
included Social Security, Medicare, Veterans and all
public retirement benefits, farm support payments,
interest benefits, (college loans etc).
This is not a tax proposal but a cost reduction scheme.
It could reduce the fixed (entitlement costs) by 20% or
110 billion - (half the deficit) the other $110 billion
coming from reductions in discretionary programs.
We can not affort welfare for the rich: payed for by
future generations.
On taxes the V.A.T. (Value Added Tax) is clearly better
than the income tax:
TAXing consumption not income, saving, investment,
capital gains; makes a lot of economic sense -
increases the pie and benefits almost everyone.
By making the normal exception for exported goods -
reduces our relative prices by up to 10% - and is in
balance with most other countries that do not charge
VAT on exports - their social costs are not reflected
in their prices - our social overhead is.
Get the IRS out of our way -
A income tax using the system above for 15% means that
the top income pays 15%, the 75% percentile pays 7 1/2
%, and the median income pays nothing.
The VAT then could be about 3% (and local sales taxes
could be collected by the same agency to make an 8%
average - the VAT in Europe is going toward 13% - with
a national VAT of 7% we could replace almost all income
taxes and still keep the total around the international
average.
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Peter E. Pflaum Ph.D. *INSTITUTE FOR HUMAN RESOURCES*
225 Robinson Road, New Smyrna Beach * IN THE WORLD -
FL 32169-2176 (904) 428-9609 * BUT NOT OF THE WORLD
[EMAIL PROTECTED] [EMAIL PROTECTED]
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