Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: John McCarthy who wrote (78991)	5/11/2008 10:27:59 AM
From: Dan3	Read Replies (1) of 116555

There is only one thing that can save the economy - increase incomes to where they can afford current prices. How to do that without Weimar Republic levels of inflation? Compensating taxes on energy and the super wealthy. So - eliminate payroll taxes, take maximum marginal rates on income taxes up to ~60% (at, say, $250k per year). Tax oil imports at 100% (and do the same for the btu equivalents for Natural Gas, etc.). Tax domestically produced energy at 65%. Index capital gains to inflation, then tax it as ordinary income. None of this will ever happen, but it's the one thing that would save the economy. Hiring labor would become far less expensive. Between the employer's share and the employee's share of payroll taxes, (SS, FICA, and SUTA) employment costs would drop by 20%. Someone who buys something, holds if for 20 years, then sells it for less (inflation adjusted) than he paid for it would not face crippling capital gains taxes). Someone who flips high priced assets for a living would pay his fair share of taxes, instead of "capital gains" rates. Balance would be restored to the economy and price signals wold encourage production and work, instead of swindling.

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