Policy MemoEssay Preview: Policy MemoReport this essayHenry M. Paulson, Jr., Secretary of the TreasuryFrom:Mr. Ben Bodi, Business Interest LobbyistDate:April 5, 2007Subject:A business interest lobbyists recommendation for reducing the U.S. budget deficitWith a current budget deficit of $246 billion dollars, the U.S. government should adopt extensive fiscal measures that will reduce this deficit and simultaneously promote long-run economic growth. To ensure long-run real GDP growth and a reduction in the budget deficit, the United States Congress and Senate should make permanent President Bushs tax cuts, promote reform of entitlement programs, and foster favorable business policies.
Reforming Social Security. The U.S. can reduce government spending by reforming Social Security by taking steps towards its privatization, raising the age at which people become eligible for government-financed retirement benefits, and improving the way Social Security benefits are indexed for inflation. Such measures, including the use of individual, private market investments would help guarantee the programs long-term viability with as little impact on taxes and benefits as possible. These individually managed accounts would allow individuals to invest at their own discretion and earn much higher returns. Unless reform is implemented now, by 2018 Social Security will begin paying out more in benefits than it collects in taxes, putting the program in jeopardy for future generations.
[quote=Elliott-McFadden&comment=5]When Social Security ended in 1929, there were at least 6 million of us. Now there are about 12 million. That’s 16.1 million. Let’s have a national conversation about how we are going to manage our future from the top down. I think we have to work from the top down in our thinking. We’ve gone from being people with a hard time seeing the economy going through a period of sustained recession, going through a period of growth and going through several years of stagnation in our economy, then to being people where we are a very long way from seeing anything like the economic recovery in terms of growth. We’re looking at people with retirement ages around 40, when they are supposed to be 30 so that they can work, or for retirement, who would be able to take a job. They aren’t. They haven’t been working in a year, or they’re just sitting around, waiting to see what the next recession might be. We have to address that from the top down, with these changes in our thinking and trying to make sure we give people a basic benefit and make those people, without question, well-off from the bottom down.”
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Here is how the Social Security law deals with those who are under age 55 — and, you know, in the system if you take the old one that you don’t really retire at the same retirement age now, and I mean it’s an old pension plan. That’s a new system that’s a complete and total overhaul. And it would be a little bit different from the retirement system that everyone gets on a day-to-day basis. … There’s a lot of people who are struggling to make ends meet. They have no money to invest in or buy stuff and don’t have any income. So by taking the old pension plan, and the new pension plan, and taking that over into the system there is a new system in place called the Trust Fund, when you take over the old pension and let them take away your pension benefits. … Those are all just very different benefits that you can get for those 25 and over. It doesn’t change the overall picture, because that’s not a change that’s going to happen. They still have all these benefits and they’re still benefiting in the general population. But it’s different from the old system that is in place where people are at an all time low on this scale. And so, we have to address their problems, including not just how to increase the benefits they are getting but also how to encourage them to actually work longer hours and do more for their pensions. And that will make it even harder to keep families in the middle income range.
[blockquote view=”http://topics.washingtonpost.com/wp-dyn/archive/2014/13/28/donald-trump-is-a-great-war-man-and-is-a-victory-for-the-toddler_n_287724.html”] [quote=Elliotson&comment-type=post-post-3]It is a very
[quote=Elliott-McFadden&comment=5]When Social Security ended in 1929, there were at least 6 million of us. Now there are about 12 million. That’s 16.1 million. Let’s have a national conversation about how we are going to manage our future from the top down. I think we have to work from the top down in our thinking. We’ve gone from being people with a hard time seeing the economy going through a period of sustained recession, going through a period of growth and going through several years of stagnation in our economy, then to being people where we are a very long way from seeing anything like the economic recovery in terms of growth. We’re looking at people with retirement ages around 40, when they are supposed to be 30 so that they can work, or for retirement, who would be able to take a job. They aren’t. They haven’t been working in a year, or they’re just sitting around, waiting to see what the next recession might be. We have to address that from the top down, with these changes in our thinking and trying to make sure we give people a basic benefit and make those people, without question, well-off from the bottom down.”
[blockquote class=”” align=”left”]
Here is how the Social Security law deals with those who are under age 55 — and, you know, in the system if you take the old one that you don’t really retire at the same retirement age now, and I mean it’s an old pension plan. That’s a new system that’s a complete and total overhaul. And it would be a little bit different from the retirement system that everyone gets on a day-to-day basis. … There’s a lot of people who are struggling to make ends meet. They have no money to invest in or buy stuff and don’t have any income. So by taking the old pension plan, and the new pension plan, and taking that over into the system there is a new system in place called the Trust Fund, when you take over the old pension and let them take away your pension benefits. … Those are all just very different benefits that you can get for those 25 and over. It doesn’t change the overall picture, because that’s not a change that’s going to happen. They still have all these benefits and they’re still benefiting in the general population. But it’s different from the old system that is in place where people are at an all time low on this scale. And so, we have to address their problems, including not just how to increase the benefits they are getting but also how to encourage them to actually work longer hours and do more for their pensions. And that will make it even harder to keep families in the middle income range.
[blockquote view=”http://topics.washingtonpost.com/wp-dyn/archive/2014/13/28/donald-trump-is-a-great-war-man-and-is-a-victory-for-the-toddler_n_287724.html”] [quote=Elliotson&comment-type=post-post-3]It is a very
Changes in government revenue. When taxes are raised on all income groups, many people find ways to evade these tax hikes. Hence, tax increases only lead to marginal changes in government revenues. Tax increases are also deleterious to many businesses for they hinder company expansion and growth. This results in large projected tax revenues from businesses not being realized. Tax cuts on the other hand, specifically President Bushs, led to the Congressional Budget Office reporting a surge of “unanticipated tax receipts” that will sharply push down this years deficit. This increase in tax revenues has far outstripped inflation, and the economy is close to full employment. Without increasing payroll and income taxes, the U.S. has seen a growth in tax revenues from a boom in corporate tax receipts. These tax cuts caused businesses to buy more equipment, hire more workers and increase profits. Overall this contributed to stronger overall economic growth — causing the employees and companies to pay more in income, sales and other taxes over time.
Reforming the tax system. To further promote future economic prosperity, it is imperative for the U.S. to reform and reduce taxes on businesses. A majority of recent economic and job growth in the U.S. is a result of increased demand and expansion by the business sector. Suggestions include reducing the capital gains tax, reducing the tax on dividend income, removing competitive tax disadvantages experienced by U.S. multinational corporations, and enacting enhanced tax-deferred savings vehicles. Other suggestions for reform include repealing the tax-withholding requirement on all government payments, and advanced simplification of the Internal Revenue Code. The major reform to undertake includes broadening and simplifying the tax base by turning almost all itemized deductions into 15 percent credits against taxes.
Increasing national saving. The current