The US is now 13 trillion dollars in debt and if this downhill roll is not curtailed soon we will soon become the biggest debtor nation on the face of the earth. Even now the US COngress has failed to pass a budget and the spending that is now in effect adds another 1.5-2 trillion to the national debt.
Shown below is the source of the US income that goes to the treasury and the current obligations:
Source Billions %
Personal Income tax 915.3 43.5
Social Sec , Medicare, etc 890.9 42.3
Corporate 138 6.6
Customs, duties 74.2 3.5
Excise 62.5 3
Estate and gift 23.5 1.1
Total Revenue 2104.4 100
2011 Budget 3690
Deficit -1585.6
As can be seen above the 2011 budget will add 1.5 trillion dollars to the national debt, mostly finaced by personal income tax. The sources that the US receives income exclude the underground economy, drugs, illegal aliens, gambling, prostitution and many other activities. The soultion here is to increase the amount the treasury collects while decreasing the budget and ensuring that everyone has some skin in the game. The solution is to get rid of the present income tax and replace it with a retail tax. If we fail to do this then the Fed will still collect income taxes and add a VAT Value added Tax to items we purchase. We cannot have both a personal income tax and a retail tax as this would be detrimental to business in the US. The solution is a retail tax only while abolishing the personal and corporate income taxes; Shown below is a sample 2011 budget based on a retail tax:
GDP Gross Domestic Product = 14000 billions
Source Billions
Retail Tax 20% 2800
Customs, duties 74.2
China Import Tax 30%
of 296 Billion 88.8
Total Revenue 2963
2011 Budget 3690
Deficit -727
Soc Sec age Retirement limit 69 years
starting Americans born after 1985
10% CUT ACROSS THE BOARD
ON Non Mandatory Spending and
freezing the budget at 2009 level -1800
Budget Surplus 1073
So as can be seen with just a 20% retail tax and some stiff import/export tariffs as well as a 10% cut in non-madatory spending and raising the age of retirement we can acheive a budget surplus. Most of the retail tax will be offset by the elimination of the corporate tax.