Blueprint for Balance: A Federal Budget for FY 2019

The release of The Heritage Foundation’s "Blueprint for Balance" – a detailed policy agenda for Congress to balance the budget without raising taxes, ensure a strong national defense, and protect individual liberty and economic freedom.

[mchristr]

Crunching the numbers is fairly easy but having the political courage to implement the plan is the challenge. The entitlement mood in both the Congress and the populace at large will have to be transformed.

[stevegodenich]

Consider a decentralized form of Edgar Feige's 0.3% flat tax[1, 2] on the broad $4 quadrillion liquidity flows tax base[3, 4] instead of the double-digit income tax[5] on the subset of the narrower $10 trillion liquidity flows tax base[6] and the average 6% sales tax plus the 10% capital gains tax, excise taxes, subsidies and tariffs. The APT tax reform increases liquidity on main street for households and productive businesses, i.e. money velocity. These lower taxes raise net wages, net profits and enables lower priced goods, services and exports.

Apportion these tax revenues to local governments and legislate appropriations upwardly to state and federal governments so local constituencies, through their locally elected representatives, have more of a say how their tax dollars are spent. Enable your local government to retain funding to reduce property taxes, reduce education taxes, and reduce reliance on politically conditional state and federal funding. Curb central bank monetary inflation on main street by regulating the flow of tax dollars for appropriations to state and federal governments from the grassroots level of municipal government, i.e. rein in excess lending to state and federal governments by fear of government bond default risk, higher APT tax rates and/or capital flight to hard assets, real money and other currencies that would undermine the value of the dollar to prospective lenders. Encourage growth of business and jobs in your local community, address concerns of lost government revenues from tax loopholes, tax havens[7, 8] and save $800 billion per year in tax processing overhead costs with this tax reform. Consider also transitioning public pensions from defined benefit plans with 7.5% ROI to defined contribution plans with risk-free to market-rate ROI to remove the taxpayer guarantee risk. Finally, consider setting up a sinking fund[9-12] to reduce government debt to a manageable level on the fiscal side of the house and bringing down guns[13] & butter[14]* discretionary spending to a more manageable level.

* Note that OASDI/Medicare Insurance is separately funded by FICA 15.4% premium payroll withholding (current $132K cap) and the actuarial risk is spread widely across the country, i.e. it is not included in [14]. Rates and caps may be adjusted to sustain the fund. Have a referendum if you think people want old age income, disability and medical insurance reduced or delayed, now or in the future. Note also that 40% of beneficiaries are veterans and their families[15]. It is arguably the most effective internal security program in the United States and may help reduce our falling life expectancy rates[16].

[1] Alternative Proposals Reform, May 11 2005 | Video | C-SPAN (second 5-minute speaker)
[2] Taxation for the 21ST Century: The Automated Payment Transaction (APT) Tax | SSRN
[3] Intraday Liquidity Flows | FRBNY
[4] Worldwide Currency Usage & Trends | SWIFT
[5] The Income Tax | Seligman | 1911
[6] Summary of the Latest Federal Income Tax Data, 2017 Update | Tax Foundation
[7] The Spider's Web - Britain's Second Empire | Youtube
[8] [PDF] Treasure Islands | Nicholas Shaxson
[9] Walpole and the National Debt | History of Parliament Online
[10] The Financial Market and Government Debt Policy in France, 1746-1793 | Velde | 1992
[11] The Management Of Britain’s National Debt, 1756-1815 | O'Brien | 2006
[12] Sinking Fund Definition | Investopedia
[13] Making Sense of the $1.25 Trillion National Security State Budget| POGO | 2019
[14] CRS Report: Welfare Spending The Largest Item In The Federal Budget | Sessions | 2012­
[15] Military Veterans and Social Security | SSA | 2005/2006
[16] Suicide, opioids tied to ongoing fall in US life expectancy: Third year of drop | APHA | 2019