Here’s a Compromise for the Parties in Gov’t
Gov’t revenue will increase as the economy grows.
What I would like to hear, if there is to be a compromise, is a revenue nuetral reduction in the number of deductions for a reduction in tax rates — ie., simplification for year one. This along with a gov’t spending freeze, including no baseline increases. This is necessary to allow business and individuals to plan for what comes next.
Then in year two, an additional reduction in rates and capital gains tax rates, tied to a minimum anticipated increase in GDP over the 2nd year that would guarantee revenues to the treasury would increase by a minimum amount. Should the revenues not increase due to slow GDP growth, then retroactive, automatic tax rate increases would kick in to make up the difference. This way, we are sure to increase revenues by a minimum amount. Again, no speding increases in the second year.
This guarantees that gov’t will receive more revenue while encouraging economic activity and investment. Money will be repatriated to take advantage of this opportunity and the reward of successful investment will be profits plus lower tax rates.