Solving the Four Deficits

The book I.O.U.S.A. discusses America’s four deficits – the budget deficit, the savings deficit, the trade deficit, and the leadership deficit. There is a magic bullet that can solve three of the deficits. A national sales tax that would refund the American portion of the sales tax receipts to American manufacturing companies is such a magic bullet.

Advantages:
American manufacturing, especially American automobile manufacturing companies, would become profitable. They could hire more workers to build more cars. More people working means government has to pay out less unemployment compensation but collects more income tax revenue and more tax revenue from the national sales tax.

Disadvantages:
Foreign governments would get angry. There might be retaliation. Some of America’s industry might be effected. Also, our government could squander their newly collected revenue on poorly conceived and executed programs.

Solution:
The solution is to simply impose a five percent national sales tax and refund the revenue to the American manufacturer. This would allow the American manufacturer to hire more workers, pay more taxes and sell more products.

This action would produce rapid results, once implemented. People might even go on a Christmas buying splurge in anticipation of a 5% price hike due to this national sales tax. This tax increase MUST be accompanied refunds or rebates to American manufacturers that face stiff foreign competition.

To compensate for the extra national sales taxes paid by most Americans, they would need McCains’ promise of a $3000 per person increase in deductions. To compensate for this decrease in tax revenue, those earning over $250,000 would have to have their taxes increased slightly.

The USA is in an EXTREMELY dangerous economic situation. Read I.O.U.S.A. (ONE NATION. UNDER STRESS. IN DEBT) or Empire of Debt, if you need further convincing.

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