Dear Mr. President-Elect,
In no particular order:
1. You want to raise the capital gains tax. Don’t. Do not. Not even a teensy tiny little bit. Ignore the hootin’ and hollerin’ about selling out to “Wall Street” or “Big Business” or “The Man” that would undoubtedly ensue from some of your backers. Higher capital taxes encourage capital flight, i.e., investment dollars would fly overseas.
2. You want to give 95% of “working families” a tax cut, and raise taxes on the other 5%. Don’t. I mean, do, and don’t. Do give the 95% the tax cut, but leave the other 5% alone—especially since you’re planning to go after their capital gains, too.
3. I don’t know what your energy plan was, because by the time you got to it in the debates I flipped over to the cartoon channel. Anyways, permit more domestic oil drilling and fire up more nuclear reactors. This is especially important considering that Russia, Iran, and Qatar may form a natural gas cartel. The increase in energy supply (and the mere expectation of such) will put downward pressure on energy prices. That’s not to say energy prices won’t rise regardless, but at least you’ll be doing as much as you can to lower them.
4. Keep your promise of a “net spending cut.” There was some talk in your campaign of reducing federal tax revenues to around 18 percent of GDP. That’s fine, as long as the federal tax spending is around 18 percent of GDP also. This’ll have the effect of lowering the average effective federal tax rate. I don’t know that there’s an official statistic for that, but the short version is “the lower, the better, and the easier to pay off national debt.”
5. This one isn’t advice so much as it is a warning. Even if you try to make the tax code more “progressive” (i.e., the richer pay higher tax rates), some imbecile will nonetheless scream at you for being a shill for the rich. Why? Raising the marginalrates on the rich may increase the percentage of total tax revenues paid by the poor. Why? Because when the rich hear that the government intends to raise their income taxes and their capital gains taxes and their Social Security/Medicare taxes, they’ll become less productive, and there’s less income and wealth to tax. Atlas may very well shrug.
The advice now gets shorter, because I’m getting tired.
6. Maintain every free trade agreement we have, and sign as many more as possible.
7. Announce that pennies now count as nickels, and then slowly take them out of circulation, replacing them with real nickels. Put Lincoln on new dollar coins the size of the old Ike dollars. Also, start printing $500 bills again. I am not a crackpot.
8. Tell Bernanke to stop watching the Dow Jones and to do his damn job, which is to keep the dollar stable.
9. Abolish the concept of “off-budget” revenues and expenditures. Every dollar spent should appear in the budget, regardless of source and regardless of destination.
10. Push for my proposal to key congressional salaries to the size of the budget surplus (assuming you’ve implemented #9).
Vincent D. Viscariello