I got a projected surplus for 2030 without any military cuts or tax changes.
Then I went back and checked "Cancel or delay some weapons programs" (I don't agree with the exact mix they want to cancel, for example I wouldn't cancel the F-35, but I think I would agree to enough other cuts to make up the difference), and "Eliminate loopholes, reduce rates (Bowles-Simpson plan)", which made the deficit fairly small for 2015, and showed a projected $250bil surplus for 2030.
I didn't check "Reduce mortgage deduction and others for high-income households". But I would reduce the mortgage deduction (maybe eventually phase it out completely, but so slowly that I wouldn't even include that part in this budget estimate). Instead I would reduce the percentage of interest that would be deductible for everyone, and maybe make the percent past a certain value for the house even lower, perhaps eventually zero. Normally I would index such things to inflation, to avoid bracket creep, but instead I might use bracket as the way to phase out the mortgage deduction. Say you allow an 80% deduction for houses up to two million, and no deduction for the additional value past that amount. That won't ever cause the deduction to go away completely, but it will become a smaller factor over time, and also the 80% can be very gradually reduced.
The problem with such gradual reduction is that it takes a long time to get all the benefit, and that it can be canceled too easily later on. But the problem with not doing it gradually is that you slam current homeowners who bought their houses under the old rules. If the hit was modest, I'd say just go ahead and do it, you can't make everything equal, someone comes out behind, but the reduction in housing prices would probably be rather large.
I also might agree to "Reduce noncombat military compensation and overhead", or at least a smaller version of it, but I'd have to look in to the issue more.
And even though I didn't select the option to reduce force levels in Iraq and Afghanistan quicker than the current plan (to the extent there is a plan), I would expect by 2030, the levels will be well below the level talked about in the article, and might be zero (or more likely an insignificant number, marine guards in the embassy, military attachés, perhaps a very modest number of people in exchange and training programs.
With possible further cuts, or income from reducing the mortgage deduction, I'd cut rates even more than Bowles-Simpson. Perhaps simply by reducing rates for all sorts of taxes by a bit, or perhaps by eliminating the inheritance tax, or perhaps even the corporate income tax, or perhaps index capital gains to inflation (By for $1mil, sell for $2mil after 100 percent inflation, pay no tax on the sale.) |
