Obama and the Democrats seem determined to raise taxes even further, while the Republicans refuse to budge on new taxes unless they’re offset by reduced taxes elsewhere. I have a modest suggestion. As things stand, fully half of Americans pay no income taxes whatsoever. In fact, many pay a negative tax, because tax credits offset any taxes due, resulting in a “refund” of taxes they never paid.
So, how about we remove the personal exemptions and standard deduction, and begin taxing that untaxed 50%. At the same time, we can reduce the tax rate to reduce the taxes due from middle-class taxpayers by an amount sufficient to offset the loss of the personal exemptions and standard deduction. That would make the Democrats happy, because we’d be increasing taxes, but it would also make the Republicans happy because those tax increases would be completely offset by tax reductions elsewhere.
We can then get to reducing the deficit. I suggest a 100% reduction in deficit spending the first year and every year that follows. Economic growth should then allow us to begin cutting down the existing debt.