Here’s what you should start to do RIGHT AWAY:
Nuclear power-- the solution to our energy needs
1) Lower the capital gains tax. The stock market is in shambles, and right now we need to encourage renewed investment. Historically, every time the CGT has been raised, the government’s revenue from that tax has gone down. Now I know that having a low CGT flies in the fact of your fairness doctrine, but you simply cannot equate the CGT to regular income taxes. Investing in the stock market is very risky, and a low CGT mitigates the risk by improving potential reward. In other words, you need some sort of incentive to invest in a risky market. If one knows that they can pay less taxes by investing in the market, they are more apt to make that investment. If you raise the CGT, they have less potential reward for their investment, thereby resulting in investors choosing less risky options than the stock market. It’s all risk vs. reward. The higher the risk, the greater the reward.
2) LOWER corporate taxes. I know you think that corporations are the biggest culprits in this economic slowdown, but the truth of the matter is that raising corporate taxes will only drive corporations to seek lower taxes overseas. Take a look at my former home-away-from-home Ireland. Corporate taxes are 11%, some of the lowest in the world, and as a result, companies like Google, Hewlett-Packard, and SAP have set up MAJOR headquarters in the towns around Dublin, creating thousands of jobs, more wealth, and a vastly improved economy. Dublin is flourishing with all of these young professionals who are buying goods, houses, and eating and drinking in restaurants. Low corporate taxes = more jobs and more wealth.
3) Begin building nuclear plants ASAP. You want renewable energy? Cool, so do I. Nuclear power is clean, efficient and reliable. Look at our friends in France who have been using nuclear power for over 40 years– they have the lowest emissions in Europe and the lowest electric bills in the world. There hasn’t been a single accident, and we currently have the reprocessing technology that ensures enough nuclear fuel for at least 10,000 years. Building new nuclear plants will generate jobs, obviously, and, once they go online, will VASTLY reduce our CO2 emissions and drastically cut our energy costs. It will also nearly kill our reliance on foreign sources of energy and keep that liquidity in the United States rather than in Saudi Arabia. Nuclear investment will help the environment, help our wallets, and help our employment rate.
4) Keep the death tax off of the books. If someone works their entire life, pays taxes on their earnings, then leaves that money to their children, they should NOT be taxed again upon the transfer of that money. If someone’s father doesn’t want their grandchildren to have to worry about paying for college, then the government should absolutely NOT step in and take that money. Remember, this is money that has already had taxes taken out of it. Where is the incentive for Americans to work hard and save if they know that the government is going to take a massive chunk out of it when they die? How will family businesses be kept in the family if children are taxed so heavily on their new acquisition that they have to sell the family business?
That’s all I can think of for now, but if you truly want to help this economy, these are some of the things you have to do.
lughlamfada
Saoirse
Re: Nuclear Power
The US already needs to import Uranium – so Nuclear Power isn’t exactly going to make the USA energy independent: Granted, you’d be dependent on less volatile nations…
Then even in a country like Australia where our uranium needs well outstrip our uranium supply there’s ~80-ish years of economic uranium available at our current rate of export: it’s not going to be cheap forever.
You’re right that if Nuclear is going to be an option it needs to happen ASAP: it’s still going to be 10+ years before new plants can open. And I guess that’s what makes a lot of people (well the ones who aren’t being all paranoid about accidents and/or weapons) resistant to nuclear power: It’s going to take 10+ years anyway and there’s the possibility that “peak uranium” came and went decades ago…
I guess it’s a matter of weighing the risks: if you’re optimistic about reprocessing and uranium supply, and confident that renewable energy can wait and the damage to the environment in the meantime won’t be irreversible, and/or you’re pessimistic about finding/creating a viable renewable alternative to fossil fuels in the next few years: then you’ll see that nuclear is absolutely the way to go.
But if you’re more pessimistic about uranium supply and/or more optimistic about renewable energy then you’ll see that focusing on nuclear power is a big fat waste of time which will land us with a whole lot of power plants that don’t work, irreversible climate change and still no renewable energy.
All good points.
In terms of scale, I’m not sure that removing the death tax is going to make a huge impact on the nation’s economy. I think the death tax was introduced to try to temper the laziness of people who were living a life of leisure off their inheritance. Perhaps a reworking of the tax so that those who genuinely use their inheritance to perpetuate a family business get a break would be in order.
As for lowering taxes I think it will help, but I think there are more effective and better things to do. The risk vs reward is a good starting point, but things are currently a bit more complicated. Lowering taxes will encourage people to invest, yes. But right now, people don’t have a lot of money to spend because nobody wants to lend anybody any money. Playing with the interest rate is a possible avenue for stimulating the economy, as are rescue packages. What DOES need to happen, is for there to be more regulation in the banking, shadow-banking, or whoever ends up lending people lots of money otherwise we get runaway reactions that lead to collapses like the one we’re seeing now. I’ll be looking very closely to see who Obama appoints as treasury secretary. I’m kind of hoping for Larry Summers, but some of the other candidates who have been flagged would also be pretty good.
The nuclear power point is an interesting one. The tree-hugging hippie in me is very uneasy about it, but the economist in me thinks it’s a great idea. Interestingly, the way the French did it was to do it all at once and basically create an industry of people trained to maintain and run nuclear plants which were essentially exactly the same. (The story behind how France went nuclear is fascinating) The point here is that the government needs to take major ownership of the project right from the start. To add to this point, we should push to export the technology to the Chinese because that will REALLY reduce greenhouse gas emissions in a big way.