Tuesday, January 25, 2011

Taxes Must rise

The U.S will face major problems if it doesn't increase taxes. Today the U.S will spend 74% of every tax dollar on Social Security, interest on the debt, Medicare and Medicaid. That means that only 24 cents of each dollar the U.S government have in taxes will be spent on everything else. Education, the Army etc.. In 2020 , because of out of control deficits the U.S will pay more on the interest and in 2020 the U.S will have to pay 92% of it's taxes to Social Security, interest on the debt, Medicare and Medicaid. That means the U.S in less than 9 years the U.S will only have 8 cents to run the Government, and the 92% of the money will go to Social Security, interest on the debt, Medicare and Medicaid. These four budget items our non negotiable. The U.S can't say isn't paying the interest on the debt. This means that the Republicans idea of cutting is only today 24% of the budget, and soon only 8%. Now there are many solutions to this. You could increase the retirement age and spend less on social security which is the biggest budget item today and 2020. Create a national sales tax for 5% which would be one of the lowest in the world. Create a carbon tax and stop the Bush tax cuts for everyone and make a estate tax that is more strict. By doing this the interest on the debt will be less as the deficit will dramatically decline even though I do believe in some sort of stimulus with all these major tax increases, but with all this it would be likely to see that a smaller deficit and a possibility for a surplus can happen now. The U.S also needs to increase it's research spending the country today that spends the most on research is Israel (as a percentage to GDP) with this spending many new products can be made and created and this would create jobs. The U.S must raise taxes and cut spedning to the military and now increase it's spending on research.


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