CUT TAXES NOW!!

December’s jobs report was not good. With the unemployment rate still stagnate at 10%, the economy is still sputtering. A number of labor economists point to the real unemployment rate sitting at 17% to 20% when you include discouraged workers and the under-employed.


To add to this weak situation, larger firms like United Parcel Service (UPS) have announced significant layoffs forthcoming. UPS can be considered an indicator of how well the economy it doing. If package shipments are up it’s a good sign that the economy is improving or robust. Currently, it does not look good.

The Keynesians in power seek to push through another stimulus package. President Obama is emphasizing “green jobs” as part of that package. The first stimulus did not work very well. What makes them think a second one will? It won’t.

In order to effectively stimulate the economy, CUT TAXES NOW!

To those who will argue that a tax cutting policy will only add to the deficit, phooey. Perhaps in the short run that might be the case, but in the long run the revenues will increase as job growth and income growth rise as a result of significant tax cuts.

Tax cuts worked during the Kennedy administration in the 1960’s. They worked during the Reagan administration in the 1980’s. They worked during the Clinton administration during the 1990’s. Even the Bush tax cuts helped an economy mired in recession at the start of this century.

Four simple tax cuts are urgently needed now.

1. Cut the payroll tax (FICA) to 5%. Employees have this tax taken out of their paycheck. A cut would put more money in their pocket for saving and spending. Employers pay this amount too. A cut would free up more cash for their business operations.

2. Spread the Marginal Tax rates for the Federal Income Tax. Make the adjustment retroactive to January 1, 2010 allowing for more take home pay. The rates should be adjusted as follows:

Rate-- Single Income-- Married Income
10%-- Up to 20,000---- Up to 40,000
15%-- 20K to 45,000-- 40K to 90,000
20%-- 45K to 90,000-- 90K to 180,000
25%-- 90K to 180,000- 180K to 360,000
30%-- 180K and UP--- 360K and UP

3. Cut the Capital Gains Tax to 10%

4. Reduce taxes across the board for small business owners.

All of these tax cuts taken together will provide plenty of capital to get the economy rolling again. Spending will not. It is through economic growth and income growth that produce the revenue stream to retire government debt. The alternative would be the Keynesian exacta of Death through Taxes.

Towards a Vibrant Independent Sector in Illinois

John F. Kennedy said in his inaugural address, “Ask not what your country can do for you, but what you can do for your country”.


Karl Marx opined in his book, Das Kapital, that capitalism would fail as soon as the people learned to vote themselves money from the treasury.

The reason I juxtapose these two ideas is that we have moved far away from the former and closer to the latter. In essence we have become an entitlement society. Because of this attitude, many Americans have relied on the largess of government to support themselves and the institutions they belong to. It’s time to get many of these snouts out of the treasury trough. And ask people to become more self-reliant.

Illinois should take the lead in developing a vibrant Independent Sector. Less reliance on government to solve our problems will go along way in solving the states current fiscal crisis. Americans are the most generous people on earth. Illinoisans are no exception. Isn’t time we reward that generosity and build a strong Independent Sector? This is vital to creating a transfer of reliance on money in the treasury to an Independent Sector that solves problems locally and in a more efficient manner.

One way to make this change is to initiate a tax deduction for charitable contributions on the Illinois Income Tax Return. Currently, the state form IL-1040 has a “Step 10” in wish you can donate in any amount to a list of causes delineated on the form. You are not allowed to deduct this generosity. Instead you reduce your refund or increase the amount you owe should you choose to make a donation. Why not change this completely and allow Illinois taxpayers a deduction of all charitable contributions by reducing their adjustable gross income by the amount they donate. Cap the amount at an even $5000.00.

A “form Ch” could be created to itemize these charitable donations. Of course the donations would only be allowed to registered charities in the state of Illinois. The state legislature could set up the process by which this is accomplished. The “form Ch” could also be a means for recognized charities to raise funds, similar to the ones listed in “Step 10” do now. The state should charge a fee for such collection and distribution to the charity. A taxpayer would get the full benefit of reducing their taxable gross income through their generosity.

It is vital that Illinois create an environment for a vibrant Independent Sector. A charitable deduction for the Illinois taxpayer would go a long way towards achieving that. During these tough economic times it is important to wean the so-called independent agencies off the government teet and bring them into a truly independent status. The consequence would be to develop less reliance on government largess and more self-sufficiency.