Just for fun….
If I were to create an Economic Stimulus Plan, it would be quite different from the current one under consideration by Congress.
1) Lower corporate tax rates to 26% – or approximately the middle of the list of tax rates in other countries. However, I would also demand all the loopholes be closed that give corporations too many ways to avoid paying taxes. Since corporations are giving the status of individuals under U.S. law, they should have to pay their fair share of taxes just like the rest of us.
2) Reduce capital gains on investors, particularly venture capitalists, who invest in companies which research and develop technology and health.
3) Lower tax rates on small businesses, especially for sole proprietorships, with an adjusted gross income of $750K or less on a sliding scale to not exceed 20% maximum.
4) Cut individual and family tax rates slightly more than the current plan. Currently the maximum tax rate is about 26%, it could be cut to a maximum of 20% for people earning less than $200,000. This would put more money in each paycheck.
5) Provide tax incentives, i.e. tax deductions, to hospitals, doctor’s offices, health insurers, etc., to invest in electronic records keeping as well as records/payment processing.
6) Provide tax incentives to utilities that install, for their customers, the latest monitoring and control technologies.
7) Provide tax incentives to energy utilities to encourage spending on upgrading their current energy-generating plants by using the latest “green” technologies.
8) * Provide a modest increase in unemployment benefits. Current unemployment benefits are far too low to pay ordinary household expenses. And increase the term in which the unemployed can receive benefits. It may take a long time to get job growth again.
9) Eliminate taxes on research and development so companies would be encouraged to spend in these areas…as well as recover those costs. This alone could reduce the cost of medicines, medical technology, and other green technologies.
10) Purchase state and municipal bonds to help them balance their budgets, given the huge shortfalls caused by massive unemployment, property tax defaults, business taxes, etc. Charge a 2 to 3% interest rate on these bonds. Purchasing these bonds will cause various governments to spend wisely.
11) Increase Pell grants as proposed. The education of our children must be priority and will save many families from further economic hardship, especially those families who have lost their jobs.
12) Set up a DARPA-like agency within Commerce (or some other appropriate agency) to transparently administer grants for science and technology research and development. Funding for grants should be several billion to encourage Universities, research facilities, and other non-corporate researchers to develop new technologies and sciences. In addition, this agency could administer the expansion of broadband and wireless to every community and oversee the creation of a new smart grid.
13) Increase funding grants to the NIH and other government agencies involved in health research.
14) Provide tax deductions to families and businesses to install green energy technologies. 50% of the cost, perhaps?
15) Through public-private partnership, on a competitive basis, fund the building of new railways, mass transit, highways, water & sewage systems, etc. The highest funding to go to systems that utilize the latest technologies, i.e. smart highways, high-speed rail lines, etc. While this funding would slow getting out the door in most cases, only the government has the resources to modernize our national systems which would have a positive impact on every business and, thus, boost productivity and competitiveness.
16) Temporarily increase funding of food stamps, Medicaid, and assist with COBRA costs to cover the unemployed. This would be only a stopgap measure until job growth begins again. Unemployment registration would be required.
17) Fund the Army Corp of Engineers with grants-style money for private companies to repair levees, major waterways, dams, etc., that fall within the normal purview of the Corp, with special priority given to “shovel ready” projects that can be started within 90 days.
18) Provide States with grant monies specifically to upgrade school facilities to meet the technology and science needs of the 21st Century. Most school districts already know what they need, so States should be able to competitively hire private companies within a short time frame (say 90 days) to begin work.
19) Retain the “use it or lose it” rule but have using it monitored for efficacy to prevent any Federal department or agency, State or local government, or district from wastefully spending taxpayer dollars. (I could tell you horror stories on how in the past the Military wastefully spent taxpayer dollars rather than have the next year’s budget cut.)
20) Clean up, i.e. streamline, regulatory processes to allow for efficiencies and cost controls within the market place. This would be a mandate to all Fed. Departments and agencies. While not creating jobs, it would enable the monies allocated to enter the marketplace more efficiently. The goal would be to streamline the process while maintaining environmental and cost controls.
21) Purchase “green” tech autos for the government fleet. This would bolster auto industry balance sheets and reduce the cost of these vehicles to the public.
22) Provide tax incentives and research and development deductions to companies who develop “green” tech vehicles, etc., for the military.
23) Shift tax deductions, i.e. subsidies, from oil companies to those that explore and develop natural gas and other green energy forms.
24) Provide tax deductions to trucking companies that convert their fleets from oil-based gasoline to natural gas.
While I cannot predict the cost of such a plan or how long it would take for it make a significant impact on unemployment, these tax incentives and programs will make our country a great deal stronger and our businesses far more competitive in the world market. This is the direction this country must go if our businesses, and long-term economic health, are to succeed. Otherwise, we might as well consign ourselves and our country to Third World status because China, India, Brazil, Japan, and other emerging countries will outstrip us.
* I can’t seem to get rid of “smiley face” on number 8 so just ignore it and go on.