This started with finding a link to this poster for Geeks:
2008 Federal Budget in a PosterIf you were the government you would:
Be spending 110% of your income.
Be spending 10% of your income on debt interest (credit cards?)
Be 4 years of your salary in debt.
Suze Orman says you can declare bankruptcy if your are more than 1 year of your salary in debt.
Incase you don't spend as much time looking at this as I did here are some interesting notes:
Taxes from Corporate Profits -8%
Taxes from Income +7%
Corporation for Public Broadcasting -25% (was Amanda leaving PBS most of this savings?)
Int'l Labor Affairs -81%
National Science Foundation +3%
Housing for elderly -23%
Safe and Drug Free Schools -38%
Since I had never seen a poster like this, I have never thought about our government this way so I started thinking about a few things. I usually think in terms of my goals for retirement and that for other workers.
First Comment: This is a mess!
1. What would I cut to balance the budget?
This didn't get very far, I don't know enough about the Bureau of Land Management to know if $1.845 Billion was enough. But I can only assume there is a lot of inefficiency in every single department. But spending 25% of the budget on Military / National Defense seemed a bit much.
2. If I started over how would I allocate government money?
This would be a fun civics final project. In looking at the sources of revenue, most of it comes from individuals not companies (but where is sales tax and property tax lumped in?) so it seems to makes sense you would want people to be prosperous to have a lot of money to tax. In this case, I would think spending more money on education and maybe even free college would be a good investment for the government if you end up with well paid, educated people paying you taxes. The flaw in this game is who would ever say we should budget for road and bridge repairs (boring) but needs to be done. Which brings up a whole other topic that would be blogs onto itself...
3. What things should be privatized and what should be government regulated?
My latest book on CD (Thanks Zach) thinks too many things have been privatized for profit to companies in the name of capitalism (Iraq Defense / Blackwater, Charter schools to rebuild New Orleans, etc).
I won't go too much into this here but what things should the government control or overlook and what things are OK to outsource to companies for profit?
Health Care and Health Insurance are big topics now.
What about
Energy
Oil
PBS
Medical Research
Weapons Research
Food safety
4. What changes could we make to the current system?
#3 is a hot topic so what could we do to the current system (I'd need a lot of help from Jim on these)
A Encourage Companies to bring money into the USI was surprised to see Corporate profit taxes were only ~10% of revenue and 1/4 that of income taxes. If you read my other blogs you'd know I'd say we need more corporate taxes. But it looks like that won't help much unless we double them, and then we'd need more data to see the effect of reduced profits on unemployment rates and salary. If we doubled those taxes tomorrow companies would certainly layoff some people or hold back salary or move out of the US, and that would take more money away from income taxes. SO, I think we need to encourage US companies to bring in money from outside the US. This would bring in more money to hopefully grow more US jobs to run these businesses and encourage the US to buy more companies (everyone seems to be buying our companies). Like w/ P&G buying Wella, we now need people in Cincinnati working on that stuff. How do we encourage them?
Have lower corporate tax rates on money earned from outside the US.
I think corporate tax rates are currently a flat rate (Jim?) so I'd have some amount of progressive tax w/ %profits so that companies have to focus on top line growth as well as bottom line growth to keep wall street happy, but constantly look for more money to bring into the company to hopefully be spread to more employees at higher wages.
The first obstacle I can think of would be to prevent companies from just buying a German company and letting them run it w/o US employees. In this case I would impose a social security tax on the corporations for payrolls outside of the US. Make it more expensive to the company to have foreign workers and help fix a US employee problem.
B Do not raise Capital Gains and Dividend Taxes.These are easy political targets since they do honestly favor the wealthy. However, the big problem with this approach is that most of the money people have put away for retirement is in stocks etc that are subject to capital gains. Raising those taxes won't really hurt the super wealthy that much but it will really hurt avg workers who may have to work for years more to make up for that loss in retirement savings. This would put more strain on Social Security etc since people would have to rely on that even more in retirement.
If you want to stick it to the rich get them to pay more in income tax. To do that you have to make it more expensive for their companies to pay out a dividend to them. Tax the corporation for paying dividends so that it is more appealing to pay salary to the rich. This will hurt avg people a little too if companies pay less dividends in conflict w/ my goal above, but most benefit more from capital gains than dividends.
C Allow people to fund govt programs of their choice w/o the United Way allocation scam. This may only work in small tax increases.
Lock the federal budget, then allow people to pay some amount a tax to a specific agency of their choice. Ideally this would be direct and blind to the overall government so they can't pull the old switch-a-roo with general funds to make up for things getting too much money when they wanted more to go to wars etc.
This is a hard balance.
You need corporations to provide jobs to get income tax.
You need profits to keep wall street happy to give companies money.
You need capital gains on stocks to fund people's retirement accounts.
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