Doing a deal in D.C.
If one man can come up with a proposal, why can’t Congress?
Recently, New London and Vero Beach, Fla., resident Harold F. Oberkotter Jr., identifying himself as a “lifelong Republican,” placed the following ad in the Washington Times, to propose that the Republican majorities in Congress present a comprehensive set of proposals to the Democrats. The more I read it, the better sense it makes. Regardless of the merits of any particular component of the plan, if one man can come up with a coherent program, why cannot Congress? Here is what he said:
“IT IS TIME FOR REPUBLICANS TO OFFER A TAKE IT OR LEAVE IT DEAL WITH THE DEMOCRATS
“Obamacare (Affordable Care Act): Repeal and replace with Medicare.
Effect: Expands the single-payer program to include all adults age 18 and older, including those with pre-existing conditions, irrespective of income, regulates service costs, assures portability of coverage. Eliminates complexity of selecting among private insurance policies.
Single Taxpayer Income Rate: 10% under $100,000; 25% up to $999,999; 35% over $1 million; 50% over $10 million.
Effect: Reduces taxes for lower and middle income workers.
Deductions: No deductions, exemptions or exclusions. Effect: Reduced record keeping and paper-work.
Filing Status: No joint returns. Effect: Taxation per individual taxpayer simplifies filings and give equal treatment to taxpayers regardless of marital status. Simplifies tax preparation.
VAT (Value Added Tax): 10%.
Effect: Ensures all U.S. citizens contribute to the U.S. Treasury to help offset debt, balance the budget and support federal programs and services even if they are part of illegal, underground economy and don’t report income. Taxes imports, thereby raising their cost. Doesn’t tax products made in the U.S. for export, which lowers cost of U.S. goods enhancing exports, global competitiveness, and preserving U.S. jobs while discouraging many heavily subsidized imports!
Unchanged except for New Bracket: 80% tax on estates exceeding $1 billion.
C Corp Tax Rate: 15% down from 35%. This rate is competitive with other major economies.
Effect: Incentivizes return of business to U.S. soil, enhances job creation.
Investment Tax Credit: 10% on plant, property and equipment (J.F. Kennedy’s idea).
Effect: Creates incentive to invest in productive assets and expand capacity thereby increasing jobs.
Interest Expense: No deduction. Effect: By removing tax benefit, reduces risk of excessive corporate leverage leading to systemic risks in financial system.
Salaries: No deduction for salaries, bonuses and severance exceeding $1 million.
Effect: Reduces indirect subsidies for excessive executive compensation which leads to inequality in compensation.
Overseas Earnings: Taxed at 15% per year until repatriated.
Effect: Incentivizes companies to repatriate trillions of dollars currently sheltered abroad. Raises tax revenue and provides cash for investment in U.S.
Infrastructure: Appropriate $1 trillion ($100 billion per year for 10 years) to fund critical repair, replacement and modernization of critical infrastructure components from roads and bridges to energy systems.
Effect: Creates jobs and contributes to a more secure, competitive and robust nation.
Puerto Rico: Additionally, appropriate one-time $100 billion to rebuild the island’s infrastructure.
Effect: Showcases U.S. support of a valued territory and our citizens there and what can be done with free-market economy and individual freedoms of press, speech and religion vis á vis failures of socialism and communism in the Caribbean.
AGREE TO MAKE AMERICA
Read these proposals over a few times and consider what would happen if Congress actually tackled a comprehensive set of proposals in a coherent way. Then compare that scenario with what is going on in Washington. It may not be right to present proposals as “take it or leave it,” but having a set of proposals is refreshing.
Steven Bannon, President Trump’s banished White House adviser, is running around the country seeking to find candidates to run against “establishment” Republicans. He already has urged the nomination of fringe candidates, including a recently released inmate.
Press reports indicate he plans to come to New Hampshire in early November to spread his political venom here. New Hampshire should politely inform Mr. Bannon that he is not welcome, that we have no race for the U.S. Senate next year, Senate incumbent Republicans being his apparent target, and that New Hampshire citizens can make their own decisions without his help.
If Bannon succeeds in getting fringe challengers nominated, the Republican majority in the Senate would appear to be threatened, and his announced goal of “helping” the president would produce the opposite result. Of course, whether this would be good for the country, readers will have to decide on their own!
Brad Cook, a shareholder in the Manchester law firm of Sheehan Phinney Bass & Green, heads its government relations and estate planning groups.