I love thinking at the macro level. I guess my attitude is “think big or go home”. We have a lot of problems in this country that desperately need solutions. It would be great if one solution could solve multiple problems. That is what this post is about.
The Problems
Problem No. 1 – Teachers aren’t paid enough.
Most everyone agrees that teachers, especially those at the primary and secondary levels need to be paid more. One solution is to make the school year longer but I don’t think the teachers’ union would willingly go along with that. Is there another way to solve this problem?
Problem No. 2 – There are too many lawyers
We are a nation of lawyers. We have more lawyer in the US than the rest of the world. That is a major problem, especially with their promises of getting you a lot of money with little effort on your part. They used to call these guys “ambulance chasers” but since that now seems a noble part of the profession, I’m sure it has another name. Another problem here is that most of those folks in Congress are lawyers. We need fewer lawyers in the country and especially in Congress. Is there another way to solve this problem?
Problem No. 3 – There are not enough Doctors.
With all us Baby Boomers getting old now we need more doctors in this country. The problem is critical especially in rural areas. Because they can generally make much more money in urban areas they just don’t want to put out their shingle in smaller towns. Is there another way to solve this problem?
Problem No. 4 – Our Economic Ladder Is Completely Out of Balance.
How can a ladder that is so top heavy even stay up? The very fat cats on the very top rung of the ladder have as much money as those of us on the ladder. We gotta do something about that before the ladder comes crushing around the rest of us. Is there another way to solve this problem?
The Solution
Here is the drum roll….
Drastically Change How We Are Taxed.
Changing our tax system could solve all of these problems. Here is how:
- Let’s put a flat tax on everyone with additional adjustments layered on top of that. Let’s say 12%. I know you are thinking that is way too low, but wait for it…
- Remove all exemptions and make all income the same. It doesn’t matter where it comes from, it is income. No more capital gains loopholes, no more subsidizing religious organizations who have morphed more into political ones. Make the exemptions so simple that no loopholes at all are possible
- Add a tax adjustment that is occupation specific. I’ll leave it up to the bean counters to come up with the exact numbers, including the base rate above, but will give you magnitude examples here:
Special Adjustments
| Teachers at the primary and secondary level | -6% |
| Teachers at college level | -2% |
| Lawyers | +25% |
| Doctors in rural areas | +5% |
| Doctors in Urban areas | +15% |
| Income from inherited wealth | +30% |
| Income from… (fill in the blank) |
You get the idea. This plan would go a long way in solving all four problems identified here. Let’s make it a true capitalistic system of supply and demand.
But I also like Elizabeth Warren’s wealth tax idea of putting an annual tax percentage on inherited estates based on the value inherited.
RJ's Corner 
While the ideas are interesting they are unlikely to happen with the current government system. Too many big money interests. Until money and lobbyists are removed from politics nothing major will occur. A congress and president willing to be voted out of office could do it. Anybody think we will have that combo anytime soon?
Who would oppose the above recommendations? Doctors, Accountants, retired folks, the wealthy, just to name a few. We just had the taxes done for an elderly relative. Reasonably good income and has enough money to live the rest of their life in comfort. This person paid less than 1 percent in income taxes. I personally went back and double checked the results. They were correct. Do you think this person will vote for a flat tax?
True capitalism always accumulates the money in the hands of a few. Only capitalism tempered with social Democracy has any chance of spreading the wealth among the many.
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Thanks for the thoughts, Fred. I don’t disagree with anything you said. But I think our time has come for radical change. The more I study about Elizabeth Warren the more I think she is the one to start all of these type changes. She certainly has the expertise to make it happen. We need people who know what they are doing. Just imagine what Obama could have done if he had more experience before he occupied the Oval Office. I just hope we don’t end up with a choice between Beto and Trump. That would be a catastrophe.
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Special adjustments are basically what we have today just in a different form. It’s progressive based on who you think are “the wealthy”. The problem with doctors in rural areas is not [just] money but boredom. Why would I get a medical degree just to sit in a rural area and let my skills erode without the volume or diversity of patients in the populated areas? You mention we need doctors yet you want them to be plus taxed?
I’m making $24,000 a year and you want me to pay 12% ($2,880) which really impacts my “livability” but the person making $240,000 gets the same rate which basically has no impact on his “livability”? I’m not seeing this a fair system at all.
Taxing inherited wealth is tricky. One of the big reasons that people pushed for high exemptions for “death taxes” was due to the inclusion of property in the valuation. Say I inherit a business with non-liquid assets of $2,000,000. The Irs wanted the tax on the $2M immediately so I had to either sell the assets or take out a loan to pay the taxes. The Govt would not set up a payment plan. We ought not go back to that.
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Thanks for the thoughts, Bob. Let me address a few of them. So, what are people who live in rural areas supposed to do for health care? That is the basic question. My tax plan, if you want to call it that 🙂 , taxes rural doctors less than city doctors. The idea was to entice some to rural areas. It realizes that doctors make an average of about $220,000 per year, so yes, even rural doctors are taxed above the base.
I gotta admit that my 12% number was not thoroughly explained. I intended to say that all income below a certain level is not taxed. Just as a guess I would think that taxing income would not even start until you reached 200% of the poverty level was reached (that’s $24,000).
I’m sure there someone has already figured all the inherited income stuff out. I haven’t proclaimed my intention of running for President yet, so I don’t need solid numbers. 🙂
But I do think that Elizabeth Warren is our best bet to make anything like this possible.
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RJ-
Circling back on this one as I had a conversation on Wednesday with a retired doctor here in Indiana. Here is what he said about rural doctors/medical care.
The big problem with getting docs to rural areas is quality of life – for the family. Wives (especially) do not want to live in the country. Maybe for a few years right after school if the community will help with schooling debt but once a family starts they want to be out of there.
One problem is how “unwelcoming” small towns can be – not deliberately but they have a hard time accepting people who have not been there forever. Can be very isolating for a spouse. Not to mention the cultural differences between spouses (who may be more highly educated than the locals) and fitting into the local society. Hard to have conversations if there is not much common ground to speak from. And who may be the one commuting to a job and does not have the ability to interact with the community very much.
He also mentioned that a lot of the new doctors who might be willing are from foreign countries and have real problems being accepted as a doctor by the rural folks.
He actually said their best bet might be to find an older doctor who was ready to “downsize”, get ready to retire in about 5 years who might sell an existing practice or get out of an existing higher stress practice.
The other issue is that many rural folks tend to be on Medicare/Medicaid so the income can be lower in the country.
Generally, it appears that rural folks are at a real disadvantage with good local medical care options.
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Thanks for the insight again. I have lived in a town of 2,000 in Indiana for almost 20 years now and can see what you are talking about. It was probably 10 years before we quit being known as those “new people”. Before their practice was gobbled up by IU-Health our two doctors had been in the community for decades. Now that they are both retired, they haven’t been able to replace them. My PCP is now 25 miles away in a town of 50,000.
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I was initially interested in Warren. Unfortunately she has gone off the reservation, pun intended. Reparations for descendants of slaves? How much will we owe the American Indians? How about the native Hawaiians since we stole Hawaii from them. And now she wants to get rid of the electoral college. Why would anyone care what residents of a lightly populated state or region think. If we get rid of the electoral college the answer to your question about rural medical needs will be screw them. Their votes don’t count anyway. Support for both of these issues will be nonstarters for a lot of voters.
Of course I should look at it realistically. She probably does not mean any of it and is just fishing for votes. Trump did us the favor of setting the bar so low that there is literally nothing a candidate cannot say or do that will not be acceptable.
The only likely cure for rural medical needs is to have the rural areas pay for a students medical school in return for X number of years of service upon graduation. The Feds could help with those payments. Hospitals will be the real problem. Rural hospitals are closing at an amazing pace. If anything is done to cut Medicare reimbursements even more will close. Those Medicare payments are the only things keeping many rural hospitals open.
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Fred, you certainly are harboring a lot of negative thoughts about Elizabeth Warren and politics in general. If they even exist in reality, I certainly know that they would not the centerpiece of Elizabeth Warren’s presidency. She has been looking out for the little guy against for her entire existence. You can go back 10 years and see the same message. She was primarily responsible for the consumer protection agency.
Yeah, she like me believed when her grandfather told her about have Native American roots and tried to prove that via a DNA test unknowing the native Americans shun that sort of thing. That minor misstep should not undo decades of work for the average guy.
I have to disagree with you on the electoral college, but I do admit that it does give the sparsely populated rural States much more power than my vote gets. Why should one person’s vote count more than another just because where they choose to live? It is plain fact that in a capitalistic society, rural areas will suffer as there is not enough demand to accomplish the services needed.
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