Glad You Like Stabilize the Debt! Help Us Make it Better
We are so pleased our Stabilize the Debt! simulator has been met with such a positive response. Thanks for all your emails and thanks Derek, thanks Reihan. We already feel closer to getting the debt to a better place.
We also know there are many ways to improve the online simulation, so please send us your ideas.
Want more spending cut options? (Or tax increases? Or spending increases? Or tax cuts...). Let us know what, and send the year-by-year savings estimates if you have them. Do you work on the Hill and your boss has an idea? Forward it along so we can include it. Additionally if something is unclear, or is there a kink we didn't find, we are eager to hear what you think.
We'll be adding new ideas along the way (for instance, from YOUCUT) and sharing the responses we get with Members of Congress.
We look forward to your input.
home mortgage interest deduction
I suggest: (1) Eliminate mortgage interest deduction for second (and third, etc.) homes. (2) Cap mortgage interest deduction for primary residence at $200,000 principal. Thank you for considering my suggestion. Sincerely, Michel Phillips.
New Taxes
Good Folks,
I ran through the simulation once and thought it a lot of fun as well as very enlightening.
Unless I missed a step, I don't think I saw a way to introduce an increase in taxation.
I believe that even a very modest increase in the income tax, say 0.5% across the board, then increasing a half percent yearly would enable us to keep the social and humanitarian programs going while making everyone aware that there are no free lunches any more.
Mauri Pelto
Defense Cuts
I would like an option to further cut military budgets, in particular to make the US military budget to twice that of China and Russia combined which I believe would cut it in half. Also on foreign aid I would like the option of eliminating Israel's foreign aid altogether while keeping other countries' funding in place. Thanks for the tool, though great site!
Foreign Aid
Cutting aid to only Israel sure sounds discriminatory to me. Cut or reduce all foreign aid is my optinion and cut funding to IMF and the UN, worthless as they are.
Here's a LOT of good ideas.
Add the COMPLETE elimination of the Iraq and Afghan wars as an option. The "GET OUT NOW" option. I'm sure you can figure the savings from that!
Add the closure of US military bases in foreign countries. To be charitable, we might only close half of them, say.
Add a subtle (but vitally important) variant to the tax cuts options: tax dividends and capital gains the same as oridinary income, but keep the rest of the cuts in place.
Add a spending increase: 4 billion a year on high-speed trains.
Add the option of increasing the personal exemption amount to $20,000/person. (Yes, I know it will blow a hole in the budget, but how *big* a hole? Will eliminating all the other weird credits make up for it?)
Now we get to the savings which is harder to compute.
Add the legalization of marijuana, with the corresponding massive cut in funding for the DEA and for state & local drug enforcement (since so much time is spent on marijuana), and the corresponding small increase in spending on treatment.
Add an extra option for *taxing* marijuana at rates similar to tobacco, to raise *lots* of revenue.
The VAT, Income tax, and Refundable income tax credits
Add two new VAT options: one to increase the VAT to 10% and another to increase it to 20%. Dunno about the estimated revenue (I do believe that a 20% rate would be less than four times the 5% rate estimate due to expected consumption decreases) but it should be a large increase in revenue.
Add an option to create a flat income tax rate of 20% that will eliminate itemized deductions, but will keep the existing standard deductions and personal exemptions in place.
Add an option to double the Earned Income Tax Credit.
Add an option to make all the individual income tax credits refundable (Child tax credit, HOPE education credit, ect...)
Now is a great opportunity to reform our tax system to one that does not punish savings and investment as much the current one and has less deadweight economic loss. The increased earned income tax credit, as well as making other tax credits refundable, would lessen the burden imposed on lower income taxpayers by the VAT.
I really want to see how a 20% VAT and a 20% flat income tax, with the proposed changes to deductions and credits, would affect the federal budget!
Stabilize the debt
Open letter to Maya MacGuineas:
If you can supply historical, statistical evidence that the U.S. federal debt and deficit need to be reduced or are not sustainable, or that the federal debt needs to be stabilized at “60 percent of GDP by 2018,” I would be glad to post this data on my web site, rodgermmitchell.wordpress.com. I also will mail this information to my list of 100+ economics professors, 50 newspaper and magazine columnists, and 30 newspaper and magazine editors around the country.
Glad to assist.
Rodger Malcolm Mitchell
Income Tax Options
I may not fully understand all of the options listed regarding tax regulations. I am against Cap and Trade and VAT. However, I don't believe there was an option to completely revamp our tax system and go to a Fair Tax or Flat Tax system. I would be interested in seeing how a Flat Tax with no deductions, credits, etc. would affect our deficit. I think it is ludicrous to give people refunds (via various tax credits) that have paid no taxes. If Social Security is a target to reduce spending, then social programs should be targeted also. We are in serious trouble and every program should be looked at. The deficit will be the undoing of us all.
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