The Committee for a Responsible Federal Budget has a nice interactive site that lets you adjust exemptions and set tax rates. Have a go at it. Here’s mine. 
Large parts of the 2017 Tax Cuts & Jobs Act (TCJA) are set to expire at the end of 2025. Design your own solution at Build Your Own Tax Extensions
To pay for those gigantic tax cuts and end up with a surplus, to stabilize the national debt, I had to reduce spending or increase revenues elsewhere. I did so by raising $6.3 trillion over 10 years, $630 billion per year.
My Email Proposal to the CRFB
Suggestions: I propose a zero percent corporate tax rate for profits on items and services produced in the US, and a 15 percent rate overseas. That was not an option.
I eliminated all standard and itemized deductions including SALT and mortgages, eliminated the AMT, and I propose corporate rates as noted above although my form says 10 percent.
I set the seven tax brackets to 0, 10, 15, 22, 34, 37, and 38. This dramatically reduces income tax for the bottom 4 brackets but eliminated all standard and itemized deductions. Those in the lower two brackets, and especially the lowest, don’t have deductions anyway.
I am striving for a genuine low-to-middle tax cut, while simplifying the tax code and spurring corporate investment in the US, not overseas.
In addition to being more than tax neutral, I want to reduce overall deficits. I added $6.3 trillion in other items ($630 billion a year) by attacking disability and Medicaid fraud, unleashing DOGE (e.g. eliminating the dep’t of education etc), and reducing military spending.
I would love to see how my proposals would impact GDP over time. Can you do this?
Thanks
OK, It’s your turn. Please don’t tell me tariffs is all we need.
I factored in nothing. But if you insist, properly label tariffs increases as a tax on consumers and count on retaliations with big negative repercussions.
“Make Tariff’s Great Again”
For discussion of Trump’s threat to Mexico and Canada, please see What Industries Will Suffer the Most Under Trump’s Plan to “Make Tariff’s Great Again”?
Trump is upping the rhetoric on Mexico, Canada, and China on top of previous tariff threats. Who will be hardest hit?
Regarding China ….
China Halts Rare Exports Used by US Technology Companies and the Military
For discussion of tariff repercussions, please see China Halts Rare Exports Used by US Technology Companies and the Military
Trump’s 50 percent tariff threats on China will do one of two things, perhaps both: Block all rare earth exports from China or start WWIII.
Good luck with that.
Oh, please recall: Trade wars are good and easy to win.
Addendum
75 percent of the budget is non-discretionary.
61 percent of the budget is mandatory. 13 percent on interest payments is mandatory as well. The US won’t default.
That leaves 26 percent discretionary spending and military spending is roughly half of of that.
My proposal goes after Medicaid fraud, especially disability fraud. I do not know how much that is. Medicare fraud is also hefty but again I have no numbers.
I am willing to defund the Department of Education and that is factored into my proposal to raise revenue/reduce costs of $6.3 trillion over 10 years. My $6.3 trillion also includes a stab at reducing fraud.
I am willing to cut defense spending by a quarter.
Those are all part of my $6.3 trillion revenue and cuts proposals. Any shortfalls in my proposal can come from a national sales tax or VAT.
We also need to attack the source of some costs. To do that we need to end collective bargaining of public unions, kill Davis-Bacon and prevailing wage laws, and kill the Jones Act.
Addendum
61 percent of the budget is mandatory. Interest payments are mandatory as well. The US won’t default.
That leaves 26 percent discretionary spending and military spending is roughly half of of that.
My proposal goes after Medicaid fraud, especially disability fraud. I do not know how much that is. Medicare fraud is also hefty but again I have no numbers.
I am willing to defund the Department of Education and that is factored into my proposal to raise revenue/reduce costs of $6.3 trillion over 10 years. My $6.3 trillion also includes a stab at reducing fraud.
I am willing to cut defense spending by a quarter.
Those are all part of my $6.3 trillion revenue and cuts proposals. Any shortfalls in my proposal can come from a national sales tax or VAT.
We also need to attack the source of some costs. To do that we need to end collective bargaining of public unions, kill Davis-Bacon and prevailing wage laws, and kill the Jones Act.
Factor in a recession and a huge loss of income tax a la 2008/2009. There is no chance the budget gets balanced under this scenario.
Generally agree voodoo. I want a starting point of discussion.
We are light years away.
Get rid of COLAs for SS
Forever – or for 1-5 years? I was hoping to occasionally eat something other than oatmeal and squirrels.
Grandma needs to save or move in with the kids. Gotta have something for future generations. Sorry
I don’t have kids or grandkids. Do you have an extra room for me?
You don’t even want to know what I want to do with medicare
Exactly! Now with Ozempic shots, many more $B spent plus massive side-effects, disability, add’l hospitalization. On top of death and black market selling….
Many of us need CICO monitoring to avoid sicko monitoring ™.
Many years ago the Fed replaced human food with the price of cat food on their inflation metrics.
Pet food is usually more expensive than human food on a per mass basis. The idea is to MINIMIZE the index.
Sell illegal immigrants who are going to be deported to the highest bidder. No, not slavery, more like a prison work farm, or indentured service … Thinking outside the box, lol.
Great site Mish. Soak the rich in income tax seems to be the most effective driver.
I’d defer to and empower Ron Paul to address US fiscal and monetary follies.
Hi Mish:
The tax code should be radically simplified.
A UBI should be provided to all citizens. (First year $10,000 per adult and $3,000 per child paid monthly untaxed, adjusted annually for inflation; this guarantees that all will be fed, clothed, and housed at least at a minimum level, and discourages inflation at federal level.) [Future unemployment/job transition caused by AI/automation anticipated, along with mother’s taking time off for children.]
All income will be taxed at 30%. (Family of 4 pays negative to 0% net income tax, up to $87,000 in income.)
Everyone receives the same UBI (based on family size). Everyone pays 30% taxes, including 30% capital gains (for predominately wealthy). So everyone is treated the same; however, the effective tax rate goes from negative to approaching 30%, based on income. Fair, fair, fair.
[Tremendous time saving for all citizens, eliminating disincentives for earning income.]
Non-citizens receive no UBI, however they receive tax rebates up to the family UBI amount, based on taxes paid.
Employers would deduct and make the 30% filing for all employees.
[Tremendous payroll preparation cost saving.]
Corporations would pay 30% on “adjusted” profits. Corporations could deduct 100% of expenses from employee compensation and suppliers that pay US income taxes. Unused deductions carry over from year to year. Growing companies pay less, mature companies more, based on expansion costs. No deduction for non-US taxpaying suppliers. (Corporations dependent on non-US suppliers might have to raise prices.) Corporate reporting to the public should include depreciation of expenses, to smooth annual earnings.
Traditional welfare should be eliminated, while existing Social Security payments should be reduced by the UBI payments. Future SS deductions would be eliminated, anticipating the elimination of all SS payments, at some point in the future.
Traditional IRA’s would stop, to be counted with income when collected. “SEP” IRA’s should be encouraged, for deposits of after tax income (replacing net SS payments), to grow untaxed, added to future UBI payments.
Welfare for those unable to earn income should be highly restricted and monitored closely for fraud.
Those incarcerated would have UBI payments automatically applied against incarcerating costs. [Disincentive to commit crime.]
No UBI – but certainly simplification.
Handouts encourage people not to work
I love your budget proposal. How about 2 tweaks, two corporate rates, 1 for companies over $1B worldwide revenue, 1 for smaller ones, and 1 higher income tax rate, for Individuals with income higher then $5M.
End all federal welfare programs, no federal portion of medicaid-allow states to spend what they want from their own budgets(this comes close to balancing budget as is), flat tax at whatever rate to balance budget-if you have an equal vote you pay the same rate(worked out to about 27% without budget cuts). No SSI/medicare for immigrants until they pay at least 40 quarters in taxes after becoming a citizen. No federal aid to states for state responsibilities, ie education, mass transit, etc. Since the Federal Reserve is part the the USG in actuality cancel all Fed held bonds except the special SS bonds.
If one is not serious about restructuring the debt, then you’re pissing into the wind. When you say “interest payments are mandatory and the US won’t default”, do you consider swapping out the currency, or a revolution? Govt’s always repudiate the bonds of the previous government. Do you think the US won’t default on our WWIII enemies? China certainly thinks it’s possible, as they’ve been dumping treasuries aggressively.
The debt bubble will pop when we can’t find new buyers for maturing debt, which will cause a default of some kind and force changes that no one wants to contemplate now. Therefore, the changes should be done proactively to minimize the damage.
The solution involves subtracting paid interest from outstanding debt and then swapping the debt for equity and getting the federal Govt out of our lives wherever possible. Half of the Govt bureaucrats could be gone in two years and we would never know the difference. Also, never allow Govt to borrow except in time of war to defend the country. Even then, the money should simply be printed (not borrowed), which will make money available to the real job creators, instead of having to compete with the Govt.
A national sales tax or VAT is a horrible idea. Currently discretionary spending is way too high and Trump is going on a spending spree in 2025 just wait and see.
The real budget problem is democracy. Americans love handouts, wars and big government. Back in the 90’s Bill Clinton actually balanced the budget, but Clinton wasn’t faced with the massive national debt of today. Remember baby Bush’s wars? In retrospect they are a multi-trillion-dollar waste but at the time Americans were screaming for blood and they were wildly popular. Repeal human nature and the budget can be balanced. None of this will happen.
Clinton also used the scheme of swapping the long-term debt for short term to reduce the interest expense, as they are trying to do now.
Mish:
– I wiped out the entire Department of Education
> Excellent Start! Add Zero Value, and nothing they do, can’t be done far easier, much quicker, and tremendously less costly, for starters!
– I cut 25% from military spending
> Excellent once again! The Military can “Obviously” give away $Billions to Afghanistan, and that’s as we are leaving, so they can be used against us later. Talk about “Self Perpetuating War”
>> Let’s not forget, we can “Obviously” Give Away B$$$ to Ukraine, and practically the Entire Middle-East gets $Millions upon Millions, ETC. So yeah, they can easily and quickly take a 25% haircut, and that’s with “Obviously” Zero Impact to their abilities, as we “Give Away” more than that in Weapons & Money Combined each and every year it appears?
– And I dramatically cut taxes for all but high income while removing 10,000 pages of tax code.
> Most Excellent!!
– My proposal goes after Medicaid fraud, especially disability fraud. I do not know how much that is. Medicare fraud is also hefty but again I have no numbers.
> We desperately need “The Government” Out Of ALL Medical Care & Medical Decision Making!!
– Any shortfalls in my proposal can come from a national sales tax or VAT.
> Please Never A VAT, as it will never go away, and only get increased when they are looking for some quick Revenue.
– To do that we need to end collective bargaining of public unions, kill Davis-Bacon.
> What must be done; well… It Must Be Done!!!
Most Excellent Starting Point!
P.S. Can we finally collect ALL THE “Back Taxes” owed by our own Deadbeat Politicians? 100 Days To Pay; or We “Attach Their Pay” like “They Do” for deadbeat Mom’s & Dad’s that refuse to pay what they owe. Fair is Fair!!!
I’d suggest starting with equal deductions on taxes for individuals the same as corporations. Regan and Congress screwed the middle class over by removing certain deductions from interest bearing loans like credit cards and and car loans.
If it’s good enough for a corp to get a deduction, the people who create, participate, work for etc…etc… Should enjoy the same tax breaks
I don’t agree with 61% of the budget being called mandatory. It should all be able to be cut. I would reduce Federal spending by 90% and we would default on our debt. Anyone under 50 would not get Social Security or Medicare. But of course none of that is going to happen.
I think defaulting is a bad idea. It seems countries that have defaulted then resorted to money printing when foreign investors quit buying. And defaulting on treasuries punishes the most careful conservative investors, people whose savings can help others in recessions. But yes, big cuts for everything else.
so elderly people are all cut off? Wheeling hospital beds with granny in it to the side of the road? nice. And defaulting the debt? Only a prepper with a ocean container stocked with canned beans and machine guns could possibly support such a mad idea
@Mish,
Your “Build your own tax extentions” solution is basically a return to actual Capitalism, and the destruction of Crony Capitalism… and it results in $1 trillion 10yr revenue gain. Whoda thunk?
Remove Medicare and social Security out from under the control of the US government into private hands. They will be more efficient in administering the programs which now cost 25% of SS budget. Then we can look at a pure government budget which can be hacked away at.
“Universal participation and the absence of means-testing make Social Security very efficient to administer. Administrative costs amount to only 0.5 percent of annual benefits, far below the percentages for private retirement annuities.”
Medicare is a different matter. Medigap and Advantage plans wouldn’t be fighting so hard for business unless there were fat profit margins involved.
I would still like to take them away from the government,
Unitedhealthcare made $30 billion profit last year… so that would fund the Department of Education, let’s see, 120x over. And you want to write into law forcing people to hand their income over to cooperate exes who will funnel all “efficiencies” into their yachts and pools . Brilliant!
Committee for a Responsible Federal Budget also has an interactive tool to fix social security. Turns out the cost to completely fix Social Security for the next fifty years is about a 0.8% increase in the employee payroll tax. For a household making $50,000/yr, that means $400/yr, or in other words, $33/month for *lifetime* income security.
First off, the Committee for a Responsible Budget is a protect big government establishment group, with a board of directors that includes many members of Congress who got us into the spending habits we now suffer from.
This only works inside your mind. Not realistic.
Had not seen #8 discussed as of yet. Not sure that’s doable back to 2001, as regulations are a very sticky thing. They also change and get updated based on necessity, due to changes in the need for those regulations, as time/technology changes.
Love the thought process, if it’s doable however, as that would be a brilliant move to stop these climate zealots in there tracks. Maybe give them some time to understand climate a bit more, so they understand that 1 degrees over many, many decades, is called a rounding error, and not cause and alarm for panic, and the sky is falling hysteria, so they can steal $millions from Taxpayers to build an empire addressing the Ghost Scenario!
We have so many Real Issues, right in front of us, that truly need to be addressed, and that will cause True Change, and not a blip in the radar, decimal point error, and idiots pushing those fake narratives and ideologies for “Personal Gain” and absolutely nothing else, as the benefits are as make believe as the Narrative, as usual and is typical of these Zealots…
Cut defense by 50% for starters. Cut an additional 10% until the DoD passes an audit.
Withdraw from all defense treaties such as NATO.
Eliminate National Endowment for Democracy.
Withdraw from UN and its agencies except for the IAEA.
Put Department of Veterans Affairs under Defense since it is a cost of past military activities.
Put nuclear weapons part of Department of Energy under Defense and eliminate rest of Department of Energy. Put National Labs under National Science Foundation.
Eliminate Department of Education.
Allow student debtors to declare bankruptcy. Claw back any losses on the program from colleges and universities. End student loan program and make any federal aid to students only for defense related needs.
Eliminate manned spaceflight from NASA. Cancel the Artemis Moon program.
Eliminate foreign aid.
Eliminate HUD.
Fold the SS Trust fund into the general budget and put SS on a pay-go basis since the Trust Fund is really a slush fund that encourages government spending.
Agree with crackdown on Medicaid/Medicare/Disability fraud.
Tax remittances from illegal aliens.
Eliminate all requirements for public services of illegal aliens.
Reduce federal aid to states and cities that declare themselves sanctuaries for illegal aliens.
Re-orient Dept. of Justice away from civil rights and towards enforcement of criminal laws and antitrust laws.
One tweak….eliminate most of the national science foundation and consolidate whats left with the national institute of standards and technology. The latter is responsible for setting weights and measures (an actual power granted by the Constitution to the Federal government).
Public services for illegal aliens are provided by state/local governments.
But some of that gets reimbursed by the feds
Isn’t it All Driven by the Feds?
The “collective” effect will not allow us to balance the budget, period. Once the funds are all commingled, it’s over already, we just don’t realize it. The human condition of commingled funds will almost always cause spending problems. There are no exceptions, only laws can stop deficit spending, comingled funds controlled by people with no laws limiting spending will always spend more than they should! I know, they say never say never or always, but collectivism and comingling of funds causes excessive spending, always (eventually).
The fix?
Put as much spending as possible on the states and locals where most must balance their budgets by law! Force the states to provide what they should have been providing all along. Don’t just push all the problems to the feds. Oh well, it isn’t going to happen. There is too much power and selfishness and greed and dependency everywhere! It’s a long slow rot.
Just stop raiding the Fed. trust funds that already exist. Should be easy to implement.
I would build a “shadow government” that assumes the core functions of the current government, staff it minimally and at lower wages, and then phase out the real government in favor of the “shadow government,” making it the de facto operating bureaucracy of the land.
By shadow government, I mean a backup government that gradually assumes all the functions of the primary existing government. There’s been too much hiring of federal civil servants and they’re almost impossible to get rid of. So start from scratch.
Also, simplify the tax code. Have a flat tax with no tinkering around for social manipulations like green taxes.
You can read more of my writings by going to: dark . sport . blog … on the net.
The question is: What would I do? I’d not let my wife handle the money and cancel her credit card…………………………………………………………………………….(if she’d let me)!
I handle all the finances. My husband is lucky I spend it to the savings account. I would rather have nice vacations instead of “things”
This is a fun topic .. it’s timely given incoming team … as many have said, they have about 10 weeks to read these suggestions and take action.
Error in framing the issue: “75 percent of the budget is non-discretionary.” 87% of spending is negotiable, only the interest payments are truly mandatory.
Second error in framing this issue: the “percentages” should be based on tax revenue, not spending. Spending will be around 130% of revenue unless fixes are made.
Spending and revenue must be brought in-line to avoid a debt death spiral. As in the 1980s, interest payments will squeeze other spending for a long time to come.
The claim that 61% of current spending is “mandatory” is an illusion promoted by proponents of that spending, designed to divert attention from fixing obvious problems with that 61%. Within that 61%, Social Security can be sustainably financed by benefit and tax adjustments. Medicare, on the other hand, needs a radical overhaul: it is far too expensive for what it delivers.
Defense is important – but we are not getting the same value per dollar spent as other nations. Efficiency needs to be improved.
Longer-term, we need a balanced-budget amendment. The average annual deficit cannot be allowed to exceed the rate of nominal GDP growth, in order to bring the total debt-to-GDP ratio back to a sustainable level. Debt/GDP of 60% is a reasonable level. Debt/GDP above 100% is not sustainable.
cut the intel agencies down to 2, not seventeen +. Close FBI headquarters and demolish it. Build 3 central offices st louis, San Bernadino, Wheeling West Virginia for the FBI staff. Musical chairs, if you can’t find a seat your gone.
Cut the Black Budgets, Cut all federal headcount 50% and all remaining salaries 50%.
Then cut the obvious waste, delete the Department of Education, legalize cannabis and cut the DEA down to a staff of about 40 people.
Get the federal government out of surveilling US citizens. Cut the NSA headcount by 50% (they would be one of spy agencies, signal intelligence is important overseas, not on my friggin iphone)
rinse repeat.
Here is another factor not addressed. The impact of all this “Transitory inflation” of Biden 20-30% accumulated cost increases on spending budgets.
Government does not live unaffected by what has gone before. Things purchased only a few years ago now will cost more to replace as they wear out.
Although Trumps spending proposals will not be unveiled for a while, one approach is to effectively freeze outlay levels accompanied by Growing the Real economy.
A Larger Pie means more to feed the common Folk. Which in turn will reduce the clamoring for Government to spend more and close the shortfalls that everyday people experience.
Additionally would make spending cuts in discretionary spending palatable.
Rooting out waste, duplication, fraud given the aims of DOGE.
It would also reduce Government as a percentage of economy
This is a Politically feasible way to sell turning the USS USA in a favorable direction.
If Trump is anything , he is a first class marketer.
Increase social security payroll tax AND there is no income cut off. If you make 2 billion dollars you pay ss tax on the entire 2 billion.
Raise retirement age to 70 for everyone that is currently less than 50 years old.
Hire sufficient staff to go after ALL medicare, medicaid and disability fraud. Require ALL disabilities to be re-certified every two years at the expense of the individual.
Eliminate ALL deductions for individuals. Have a flat tax for everyone. Eliminate ALL deductions for coporations except employees salaries (excluding CEO and anyone making 1 million or more annual income).
NOTHING free for illegals except free deportation. (healthcare, housing, food stamps, social security, disability, etc.)
Most of the really rich don’t make much in Salary at all. Musks net worth may be hundreds of billions but his salary is negligible.
Lots of rich live entirely off investments which isn’t subject to SS taxes. If you plan to expand it to investments then they will just borrow against the investment to get their money since borrowed money isn’t taxed.
In other words there are always ways around it. It’s best to just uncap it against salary and leave it at that.
Raising the limit on SS taxes makes no sense. The program is really a hybrid welfare program with low-income people receiving a disproportionate return on investment. By eliminating income caps, many people in high income areas (like NY) would be paying 40-50 thousand dollars in SS taxes. prohibitive and unfair!
Looks like someone hired an assassin to gun down United Healthcare CEO. I would not want to be CEO of any large company anymore. We are headed into an era where anger is taken out on the elite. You can balance your budget or whatever but I don’t think that is going to make a difference. The wealth disparity is going to grow further with Trump supporting corporations in a big way.
Addendum: Wife of United Healthcare CEO says there were random threats before he was shot about lack of coverage.
My initial reaction was “gangland shooting”. United Health Care is one giant extortion racket with a crime boss at the head of it who just got offed.
in a sad note, he survived the shooting, only to die in the waiting room of a nyc hospital overcrowded with illegal immigrants, turned out his health insurance card was expired and he hadn’t renewed it.
Death certificate listed cause of death as Terminal Irony…
Should have Andrew Cuomo sign the death certificate as “died of Covid” for an extra bonus to hospital.
All kidding aside, the assassin had to know his itinerary and the fact that he was in NYC. So it means his location was compromised in some way. Most CEOs don’t tell even their own company their travel plans.
No, but they tell their families.
If the CEOs weren’t psychpaths, they would not need to be gunned down.
I doth protest this Mish exercise! I will not comply!
Tax tweaks are second tier — first tier is shrink spending to:
1) cut the bureaucracy like DoE (both education/energy … easy, mostly painless but only nickels of saving); AND
2) reform entitlements for real savings.
Let’s discuss what “reform” entails.
PS – CRFB (founded 1981) is an old-school-captured entity within the swamp. To get donations, they need to support various viewpoints (more taxes solves all problems). I do respect David Stockman on the board … but he’s a fossil now.
75% of the budget is non-discretionary
I wiped out the entire Department of Education
and cut 25% from military spending
And I dramatically cut taxes for all but high income while removing 10,000 pages of tax code
See my addendum
Disagree. 87% of the budget is entirely negotiable.
At who’s discretion?
Interest payments are mostly non-discretionary. Congress can change any law (including abrogating the UST payment contracts although at great risk).
I fear you are captured by the language of the swamp and it is limiting your thinking … work at a start-up — burn the books; refuse conventional wisdom.
They can only change some laws and only very slowly. They aren’t dictators able to wipe out debts on a whim or seize assets on a whim or break contract law on a whim etc.
The very protections of the law and courts (and you can bet the Supreme Court would get involved) are what separate us from China and other dictatorships.
So any real change in that 75% is going to take a VERY long time to wind through congress / senate along with inevitable court challenges. That’s why Mish is starting with the things he can make changes to.
The problem is that a 25% rebalancing is required to eliminate the deficit and avoid a debt death-spiral, and taxes can not be raised much higher for the same reasons that spending is “non-discretionary”.
There’s no way to avoid the debt death-spiral unless we go into “non-discretionary” cuts and/or historically unprecedented taxation rates (as share of GDP).
The free-money cash cow provided by low interest rates is out of milk, and something must be done.
I can’t understand why Trump didn’t get rid of the Department of Education the first time around rather than having some Amway Heiress run it as an apparent political payback.
“Former presidential candidates Jeb Bush and Mitt Romney respectively called DeVos an “outstanding pick” and a “smart choice”
I don’t believe the budget can be balanced as long as public unions hold candidates hostage to increasing pay/pension in return for votes.
This is a good point – but far more applicable to state and local issues
While I like MISH’s 25% cut to military (and would cut even more), the big spending item is healthcare – especially Medicare, but also aid to states for Medicaid. The entire healthcare industry has to be carved way back – by 1/3 or more.
the fat in the military budget isn’t personnel, its graft, and corruption in contracting for things the military used to do for itself like cooking meals, etc.
Not to mention R&D a barrel of money laundering, the pentagon can’t even pass an annual audit, no one knows where the money goes.
NO more money until we find out where it all went. if you can’t pass an audit you are fired.
But the healthcare industry is private.
10% cut to every department, no exceptions! Do it! That is a start!
75% of the budget is non-discretionary
a 10% cut elsewhere is a joke
every good speaker knows, you start with a joke. That way they won’t feel the knife.
‘Self-Deportation’ Is Back
Mitt Romney is hardly remembered as an immigration firebrand, but Donald Trump could learn from some of his 2012 proposals.
https://www.theamericanconservative.com/self-deportation-is-back/
I’m not a tax accountant, but Mish’s proposals seem sound. Overall, I like the idea of a simpler tax code.
My main focuses would be:
#1 – No earmarks or anything of the kind.
#2 – Congress passes 12 budgets
#3 – Give the president a line-item veto with some checks & balances
#4 – Unleash DOGE to find & help eliminate as much waste, fraud & abuse
#5 – Pass a balanced budget amendment that has X years to kick in with mandatory spending cuts if the target isn’t met. I’d say 10 years would be about right.
#6 – Congressional term limits of a max 12 years of service would be a bonus.
The main thing is that somethings have to start happening now. Trump & the Unitparty must realize that time has run out. There’s no more kicking the can down the road. Over the next 4 years, you have to make progress towards eliminating the annual budget deficits that are approaching $2T.
And like most sane Americans, I believe that something has to be done about illegal & legal immigration. You’ve got to come up with a plan that forces illegals to go through a process that gives them legal status. And this process should include exiting the country for X amount of time, all the while clamping down on bogus asylum claims. And FYI you might not be able to return, but that’s the point.
The point is that we need more able-bodied Americans building homes. We need more educated Americans in high paying jobs and fewer H1-B visas.
The entire immigration system is corrupt and needs to be reset. Builders & hospitals are giving preference to illegals & H1-B visas because it saves them money.
It’s that simple. And, I’m not calling for an end to legal migration. Far from it.
My simple point would be there has to be “everything is on the table” mindset that a major reset is required to get us where we need to be. It won’t be easy, but there’s an enormous amount of change that has to occur over the next 4, 8, 10 years to restore America in all aspects: economically, socially & national defense.
Agreed, and we (Our Country) should have a total of 12 with JD for 8 following Trumps 4!
Should be enough time, barring an unbelievable amount of stumbling blocks laid out for them. Even in defeat, they continue to try and wreck Our Country!!!
We just need systems in place and operative. Rules, Policies, and anything “Favors” related stopped via “Penalty of Law” Gone are Earmarks, and Going along to get along is history. You have a voice, given to You by American Citizens (ie. Legal Voters), to Make Changes Now! So Start Using It!!!
the status quo, won’t stay static, they realize their entitlements, their very way of life, the graft they survive upon is in danger of vanishing. A cornered beast will die fighting. Pushback is inevitable, political intrigue, character attacks and assination are all typical tools used in these scenarios.
watch for a massive increase in plane crashes in the Trump administration.
I know! The airports are too busy…..and they want to eliminate the FAA.
Does “everything on the table” include reductions to Social Security benefits?
Social security is not exactly a wealthy lifestyle. The system has been botched, we all know if it was run properly it would be self funded and invested in bonds and stocks and real estate and used to rebuild America with its own wealth.
Yes it needs to be rebuilt, but it doesn’t need to be abolished when we can afford to launder money in the Ukraine, Israel, Europe etc, when we have black budgets larger than GDP of 2nd world countries, etc.
Social Security Admin can pass an Audit, the Pentagon has failed at least 8 years in a row, not counting 9/11 when a trillion dollars disappeared from the Pentagon.
its a magic act, and they have fooled you into looking the wrong way (again)
Social Security can be made self-sufficient with minor changes to both benefits and taxes. The pain has to be spread evenly across all age groups.
Exactly! The current income limit is about $168K. Raise that to Joe Biden’s favorite $400K threshold and adjust the bend curve so that above a certain point you get less back. You could also force the uber rich to pay something like .5%-1% on all forms of income that they simply don’t get back and that by itself would generate a ton of money. You could allow people to take a tax deduction if they elected not to receive their SS check. This would let people like Warren Buffet put his money where his mouth is and simply not take the check but receive a small tax benefit.
Finally, it makes zero sense that I have to pay SS tax on 100% of my income which people who make tons of money above $168K get a tax break.
YES ABSOLUTELY FREAKING YES. HELL YES, NO DOUBT ABOUT IT!!!
Specifically, I want 99% of the waste, fraud & abuse reduced. That’s must be eliminate. Supposedly, you have to have 40 quarters (10 years) of at least ~$1,300 paid into the system or there about to get SS.
If you haven’t met that threshold, then you should get squat. There are people getting SS who haven’t met this basic requirement, and that needs to be eliminated. You don’t get money, unless you’ve met the requirement. It’s that simple.
And, DOGE needs to find a way to make it harder to get SSDI and whittle down that abuse. And of course, at some point relatively soon, someone has to come up with a plan to save the SSTF & Medicare Part A.
But no, I’m not for cutting people’s benefits nor do I think the next bolstering plan should require an increase in the retirement age. Down the road that may be necessary, but not for another 30 years or so.
Now for anyone who pays into SS but somehow doesn’t meet the income / quarters threshold, then they or their spouse of a beneficiary should get their money back, if they’re alive, when they reach their full retirement age, including any increase in value of their overall payments.
Zero money. Zero hotel rooms. Zero SNAP for illegals. If you aren’t a citizen you do not get any benefits of any kind.
And confine birthright citizenship to the children of those legally here on a longterm basis, not illegals or birth tourists.
“Educated Americans”?
The US currently has an illiteracy rate of 21%. You have your work cut out for you.
I speaking about white collar jobs here. That’s some portion of the other 79%.
raise txes
On who
There’s a historical limit of tax revenues to GDP. FedGov needs to live within its means, which historically are 18% of GDP, give or take a little bit in a crisis.
Keep in mind, there has been, historically, a correlation between lower taxes across all tax payers and higher tax revenue, even with all of the convoluted tax rules.
Stop all Military Spending on so-called Wars on Terror or Muslims or against others for nebulous reasons.
Stop all spending outside of the USA from OUR federal government Credit machinery.
CEO of United Health just got killed in NYC. They are saying it was targeted but its a cesspool so it might not be. Health care costs got to someone.
When the new administration doesn’t fix anything, I fully expect an increase in rage and gun violence across the board. People will start taking it out on the rich and CEOs of firms. Just wait till we have massive layoffs, massive inflation and no hope or anything to lose.
Yet another reason to move on to greener pastures and exit.
LOL, the new administration. Have you forgotten who started Defund the Police scams in this country.
Police haven’t been able to stop a single mass shooting in this country, heck the cops in Texas even let a bunch of kids die because they were cowards. Police are fairly useless.
You are right. You should leave.
Wow .. ugly situation….
He was walking into the hotel for UnitedHealth Group’s annual investor conference when he was shot in the chest [multiple shots] by a masked man, who then fled on bicycle,
we need to ban bicycles, they obviously cause too much crime.
My budget proposal is; A Divinely guided (D.C), city bus-sized, M-Type (iron/nickel metallic) meteorite..
Mass casualties. Got it!
I like the proposal but it doesn’t address the differences in taxation for domestic companies as compared to foreign. To do this, add a 10% (corporate tax rate) tariff and an additional 5% tariff to cover what domestic corporations pay in state and local taxes. The 15% is still less than the total.
I say that my plan is better and would drive US based investment.
Welfare. Budget.senate.gov states it’s 21% of federal outlays. Who, among our Founding Fathers, felt that taxpayers be forced to pay the tab for junk food, medical care and housing (and now, free cell phones) for able-bodied people who contribute nothing?
Tax the rich till they’re half as rich.
Bernie!!!
Im conservative but I actually like Bernie Sanders because at least he’s consistent. He never changes with the winds.
Yep, since his honeymoon in Moscow!
and that nice lake house he got for dropping out of the 2016 race. Gotta love a socialist that lives like an elite..
Yes he has. He used to oppose illegal immigration. He also had a good record on firearms before he ran for president.
MY socialist has THREE homes. How many homes does YOUR socialist have?
No need for fancy calculators or elaborate tax rules, until SOCIALISM is dealt with absolutely nothing will get fixed. Where is the bulk of socialism in the budget today?
https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/
21% – Social Security (and growing)
18% – National Defense (and growing)
15% – Health
14% – Net Interest
13% – Medicare
Social Security, Health & Medicare are 49% of the growing socialism budget. There is your problem right there in plain view.
Add up what I listed above and you get 81% of the problem. Surprise 80% of your problem is caused by 20% of socialism! The Pareto principle right in your face!
You may be wondering why national defense is listed as socialism but it’s obvious when war funds are being sent all over the world so people can slaughter each other.
And to pay for it all, we borrow, borrow, and borrow leading to 14% of the spend now interest payments and growing.
Even taxing billionaires at 100% would only pay for 6 months of government spend, the debt numbers are staggering.
Sooner or later, you’ll run out of other people’s money and socialism will come to an abrupt end, usually in a very painful manner for those dependent on it. It has happened the world over many times and it will happen again.
Health and Medicare are the same thing and over a quarter of the budget. Denninger is right, that is what to fix and they can start by simply enforcing existing law. Break up the monopolies.
As for Social Security, remove the income cap, then raise full retirement age to 68 and the early retirement age to 63 using the same 2 months per year escalator that’s in effect now.
Also abolish the Department of (non) Education.
Agreed, after all insurance companies are simply “socialism” with huge profits. Remove the profits and you can have the same services at a fraction of the cost.
This is a “/s” I’d hope … if not, the fraction is 24/25. (save 4%).
https://content.naic.org/sites/default/files/industry-analysis-report-2022-health-mid-year.pdf
actually you should be able to have BETTER healthcare, since much of the current healthcare involves making sure the patient gets the highest billable treatment to ensure revenue targets are hit. Patients are after all only billable events, often with 2 legs, though we’ll bill them without legs, or even without signs of life. We are big medicine, like big banks except not so nice (/sarcasm)
we pay more for healthcare than any country in the world and receive the 37th best healthcare in the world for all that cash and debt and pain and mistreatment.
Removing the income cap = more socialism. It’s taking money from working people and handing it to useless leeches. That’s not a solution. For all those people that keep saying “I paid for it (social security)” then we need to go back 50 years and tax back all that extra uncapped income and all the new additional benefits to medicare as well.
The people that paid in their entire lives are “useless leeches?”
Ok, boomer.
I don’t think that word means, what you think it means…
“boomer” the new “n” word, gotta keep the population fractured by age,race,gender, anything but class, don’t mention class, its the real N word..
Boomers been called boomers since at least the 70s. Must be the “Ok” that offends… but when somebody is spewing selfish nonsense, it’s a fairly kind response.
If I thought all Americans were multi-millionaire traders like you, I’d give your viewpoint a “maybe.” However …
I deal in hard data and hard truths not fantasy land like many commenters here. The #1 mistake people make is becoming dependent on government for solutions.
Like for clean air and water, safe drugs and keeping Putin at bay?
If you think water and air are clean, you’re in fantasy land. It’s all filled with plastic (water) and the CO2 in air keeps increasing, all with the largest government ever. And how is Putin at bay? He invaded Crimea and Ukraine and planning on more.
https://ourworldindata.org/co2-emissions
CO2 ? The Late Mayor Daley planted more trees than Greta.
Yes, compared to the 1970s water and air are a lot cleaner. But when you give something for free to people, they forget. Is Putin in your living room watching CBS with you right now?
I can handle all that on my own! I don’t need nobody. I eat nuclear armed dictators for breakfast.
yeah I caught Putin trying to siphon my high test out of my SUV, last night. That guys a menace. Really if Putin is in your list of worries your zip code is fantasy land (somewhere in Anaheim).
Along with removing the earning cap on Wages, let’s tax fat-cat’s Investment and Cap Gains Income to fix Medicare! (oh, rats, we already removed the cap for Medicare and have an NII tax … yes, we have socalism not insurance … insurance is based on risk-adjusted premiums, not income adjusted).
Although you hate the idea of SS (Are your parents or wifes parents collecting and how do you feel about that?) at least its a paid for program. There is a specific tax taken out to pay for this program and the payout is not adding to the deficit (in the early 2030’s we can have another conversation about this but that’s many years from now and there are far more pressing needs to solve before then regarding the budget).
On the other hand all the other things you listed are coming out of general revenues (income tax) and are clearly not paid for since we are running a large deficit. These are definitely the places that cuts need to start.
This isn’t a question of like or not like or my sad mother-in-law or whatever, this is a question about the sustainability of the program. Why is that such a difficult concept to comprehend here?
It’s like a water well and everyone keeps drawing water. More and more people show up wanting more water from the well but we all know wells eventually run dry.
By 2030 there will be 80 million people wanting water from the well and they’ll be asking for extra water because they are too hot (inflation).
The obvious solution to the problem is to find new wells but that just means you’re taking water from other people not solving the problem. The real solution is to reduce water rations for everyone not steal other people’s water.
beware extending analogies, they all fail sooner or later. There is infinite water, if you notice, no new water is being created, we use it every day and still the oceans are full, the sky still rains, the lakes refill. I pee a little bit out every day and do my part in recycling..
SS can never hit zero (well run dry). You know this because there are always working people having SS money taken out of their checks so it’s always going to be funded with a certain amount of money.
Yes, if nothing is done eventually people will get less but they will never get zero. That point is still somewhere in the 2030s as I said. Hence that conversation is for the future because if during the rest of this decade we rein in the other issues of overspending it may be much easier to have a conversation about SS then.
Well said!
I’ve paid into it social security for 45 years. I want my damn money back.
You didn’t pay for your COLA because there was no way to know what inflation would be 45 years ago and I want that damn money back.
But I did use money that was worth more at the time, so you’re just adjusting for the federal reserve making my money more worthless. I used real dollars to pay for social security, now I get funny money by direct deposit.
If I had simply bought gold with it, it would be worth far more than a 2.5% COLA.
Who said he was collecting it yet?
The COLAS are also deliberately understated like the inflation and unemployment statistics.
this is the published budget, it leaves out the Black Budget of the spy agencies and the MIC.
Medicare is the problem, not social security. Social Security is suprisingly easy to fix at less than 1% of income additional cost.
Mish respectfully, balancing the budget by adjusting tax rates is focusing on the wrong side of the equation. The focus must be on reducing costs.
Well the first thing you do when you find yourself in a hole is to stop digging.
Step 1 is to balance the budget and not make things worse.
Step 2 is to start reducing the spending so you can pay down the debt.
Which is why the budget can never be balanced. People never want to pay the costs. Much easier to just whine about the costs.
Yes! And, unfortunately, the CRFB uses static scoring. Tax Revenue, even after tax cuts, is all time high yet deficits abound.
75% of the budget is non-discretionary
then factor in military spending
then factor in the black budget, what is the value of “X” ? the black budget has been draining the coffers since world war II, thats a big number. we are gonna have to buy some more zeros just to print it.
What you refer to as “mandatory” spending includes medicaid and other welfare programs. This is not “mandatory” in my book. Medicaid alone accounts for almost 20% of ALL federal spending. And there are many nuances not captured by the headline numbers.
This is why DOGE is so very important. DOGE will publicly expose all the underhanded theft that is going. Tweaking the rate on tax brackets might be a part of it, but let’s not lose sight of what is more important here.
In an ideal world, we should be defunding most of the federal government and returning responsibility for most services to the states or the private sector.
David Stockman suggests cutting the “defense” budget back to Eisenhower-era levels, which would be about $350B (IIRC) in today’s dollars. Close *all* the foreign military bases, ditch the sitting-duck aircraft carrier fleets, and have a lean and fit armed force.
Get rid of “foreign aid” which goes mainly to foreign despots to buy US arms. Get out of the UN while you’re at it. Ensure food stamps (SNAP) can’t be used for junk food. Simplify the tax code (Mish is off to a good start) and ensure everyone pays what they owe.
Eliminate the Dept of “Education” and fire anyone who doesn’t want to show up at the office 5 days a week.
That’s a start.
Sounds like Pavel wants us to: watch dictator countries’ moves by reading the newspapers, waste time on “foreign aid” (pennies), and moving all functions and money from the closed Education Department to the Treasury Department … solving nothing.
I remember reading in the newspaper that Bush Jr. dictated that Saddam had 48 hours to leave Iraq.
never beleive the newspapers, they are an arm of the CIA.
You really have a Putin fixation. You need to start charging him rent for living inside your head.
Agreed, but what does “fire anyone who doesn’t want to show up at the office 5 days a week” have anything to do with anything as long as they are actually working?
I’ve done remote work for more than 20 years, and have been quite good at it (though not for the government)
I agree. I couldn’t give two fucks where you work so long as your work product is accurate, timely, and complete. Remote works gets rid of overhead costs as well (buildings, maintenance,etc). It’s a money saver in my view, and it opens up your labor pool to areas outside of the businesses physical location.
I think alot of the angst against remote work comes from 1)people who are invested in CRE, and 2) the type of people who believe that if the boss can’t see their employees then the employees aren’t working.
Responding to Woodsie and YP:
I have nothing against remote work in principle and have worked remotely in IT for decades. It has a lot in its favour. However in the bloated and dreadfully inefficient US federal bureaucracy I suspect a lot of “workers” are just sitting on their a**es at home doing nothing.
(Remember when the Madoff case revealed the SEC “workers” were watching p*rn and eating pizza *in their office*!)
Same in the UK, lots of Whitehall bureaucrats and NHS administrators pushing paper all day and creating surveys for us to fill in, just to justify their jobs. I could tell you some horror stories.
I’m not a Musk fan (at all) but he did the right thing at Twitter by firing 80%.
It doesn’t take much effort/skill to separate the productive from unproductive … however, when your govt salary is primarily based on FTEs “supervised” … the effort/skill is not applied.
Totally agree and to pay for my tax cuts I slashed military spending
You wont see this anywhere else: we didnt get into this mess in a year. There have been 50+ years of tax breaks for the rich which has resulted in a multi-trillion dollar lack of revenue while spending stays “robust.” It make take another world war and the kids of the rich freezing in the same foxholes as the kids of the poor to make everyone realize we’re all equal and taxes benefit everyone (ergo, the high tax rates of the 40s thru 1963). Cutting popular/necessary/life-saving spending is a waste of effort. You will save nickels.
What you are describing is similar to someone putting on a lot of extra weight (deficit) over 50 years due to over eating (over spending). Then their doctor tells them that they are at risk for heart attack/diabetes (bankruptcy) if they don’t make changes.
Your response to this is to do nothing and just die (go bankrupt/crash the system) because its ‘too hard’ to cut back on the over eating (spending).
LOTS of people successfully make lifestyle changes that have reduced their weight to healthy levels. The Federal government can do the same.
That will go as far as your mother having her social security check cut by 75% and her medicare ended (old people did live without Medicare before 1965 but some were in a lot of pain — maybe mom likes pain?). My guess is youll be the first one up the steps in “Capitol Attack Part Deux” if those things happen. 🙂
Social Security is self funded via a specific tax. At the moment it doesn’t need cuts because it’s not adding to the deficit.
As for medicare, people need to come to grips with the cycle of life. If they want great medicare they need to pay for it from their own money (sell home, assets etc). Minimal medicare isn’t that expensive. So no designer drugs, expensive surgeries or spending a ton of money to keep terminally ill alive for another few months (easily the biggest expense of all). Either they pay themselves, their family pays, we offer assisted suicide or they suffer.
To me, it looks like a lot of money is spent on artificial joints.
Not realistic, but thats no surprise on here . 🙂 People on deaths door are the ones who scream loudest at the end that “THEY WANNA LIVE no matter what it costs!” Ask your doctor.
The entire deficit exists because of CMS and that health care consumes 20% of GDP. Put down the healthcare cartels, insurance extortion, and pharmacy price gouging and there will be no deficit. This requires no new taxes, just enforcing current laws in 15 USC 1 as actual prison time felonies.
Mish + ^This^! There will be a short and very painful but necessary dislocation for all those grifting off of the disease promotion and management industries, but “health care” related activity needs to be brought back down to 5% or less of GDP.
I retired early, so not eligible for Medicare. I’ve researched insurance needs for myself thoroughly. Here’s what I’ve found: seeing my doctor is cheap: $80 per visit. Radiological issues are cheap: usually less than $200 per visit. Light emergency issues are cheap: usually less than $300 per visit. Most pharmaceuticals are cheap. Hospitals are wildly expensive. They are privately owned mini- monopolies with wild pricing power. They have massive rent and debt put on them by PE and hedge funds. Insurance just pays them what they want, puts on a cut for themselves and live off the difference. The opposite of capitalism isn’t socialism, it’s monopoly. And libertarians are the greatest defenders of monopoly.
Yes! ..went to read 15 USC 1, here it is:
Summary: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce … is declared to be illegal.
How about instead of paying $25B for the fatty injectables over next 10 years, we move to BMI based health insurance rates? Lose weight, save $$$ …so easy!
Ps – it’s coming … it’ll be “medicare privatization” with a better name.
Oh how the porkers would squeal….
I agree. I’ve said for years now that healthcare is what’s going to bankrupt us.
At some point, you’ve got to level up with the healthcare industry and tell them that they’re going to have to take a pay cut and be WAY MORE transparent. And you’ve got to level up with the people being insured. You’re going to pay more for insurance, if you’re living an unhealthy lifestyle.
And why the hell do I pay the same insurance rate with 2 kids as someone who’s got five kids? I have to pay extra to add my wife. Why don’t we pay per kid? That’s F’ING CRAZY?
Really only one thing to do First. That is to get real growth in economy, not growth based in Government borrowing and spending.
This by itself would get middle class back in the Game. Without a Middle Class there is no incentive to produce. No one will work just to make Massa wealthier.
Getting Government Spending and Taxation as part of GDP reduced is second.
Just cause Biden is going going almost gone is not turning things around on a dime.
This was decades in making over several Presidencies and Congresses.
A start for new direction can happen over next four years but that will continue only if citizens see a change in their lives for betterment. Change such as this would bring support from electorate.
Fck balancing the budget. The goal should be to marginalize the federal government.
1) Eliminate all federal taxes and borrowing, have it rely only on tariffs
2) Cut federal spending as required
3) Transfer services to the local level as required
For 150+ years (1776-1939) we had exactly that. There was no Federal government. We had horses and carts and domineering men who ruled their families and farms and people suffered and died from disease and starvation. You dont get it. We (me formerly) in the Federal government couldnt care less what you do. It is YOU who come to us looking for housing, food and free medical care. Do us a favor. Stop calling.
Why don’t you instead stop answering the phone or stop granting the requests?
Judges tell us we couldnt. I’d love nothing better than to let poor (on purpose) people who make bad decisions just wither away.
I remember when Hillary was running for office, Senator, i think. A homeless person asked her for money. She offered him a voter registration form instead. Democrats want people coming to the government, asking for help. They keep wanting to create new or expand existing programs, in order to create more dependency on government.
Again, we didnt do anything first. Hungry, suffering, miserable people come to our door and demand something be done (and laws are passed). YOU could do something for your fellow man — stop bothering us.
Lol, you truly do personify our government. This is why DOGE must eliminate at least 75% of you people. Geeze, get a clue.
You being a federal employee explains MUCH.
Where’s the buttons to adjust social security payment schedules? And to reduce federal waste? To make Medicare/Medicaid into health organizations rather than wasteful insurance systems? Align military spending with international norms?
Taxes are part of the problem, spending seems to be the bigger part.
The best way to cut federal spending is to stop sending money to the states that should come from local tax revenues.
States have no problem spending money created by federal deficits (40% of every federal dollar spent is deficit spending), but if states instead have to raise taxes locally to pay for their spending, they will think twice about how much they spend.
I’d balance the budget by eliminating all income taxes completely and setting up a sales tax, that would change based on what is purchased. Luxury goods would be taxed more.
I recommend a 20% sales tax on everything as a base, to be adjusted accordingly.
Food would receive a lower sales tax.
The federal budget would be cut by halving the department of defense, eliminating HUD (gradually phasing it out) and slashing food stamps and welfare that has contributed to many social ills, including crime, single parent pregnancy and males not working.
for starters, I’d sell Hawaii to Japan for US#5 trl, then adopt for schedule
Japan has a bigger deficit than we do. Where are they going to get 5 trillion to buy Hawaii?
China has surplus money but do you think we’d sell Hawaii to China?
We sell our housing to China instead of our kids, so maybe…
We also need to give Puerto Rico independence. As well as those islands in the Pacific.