, cbae wrote

*snip*

Oh, goody! Do I get to come up with the entire solution myself? Awesome!

I'd start by reverting all income tax rates back to pre-Dumbya levels.

I'd tax long-term capital gains as regular income except for investments held in IRAs, 401-Ks, and other retirement accounts.

I'd tax all gains on derivatives trading, short sales on equities trading, and real estate flipping at 39%, regardless of your tax bracket.

And that's just for taxes.

I don't think a 3-5% tax increase would help anything. We're already spending more than we bring in. To counter that, we need huge spending cuts or huge tax increases (like 15-20% higher).

401(k) and Roth IRAs are already tax deferred. I don't think placing Traditional IRAs in there would do anything.

39%? I think we'd see fewer people investing at all, which isn't good for the economy. Plus, I don't see too much real estate flipping going on. If you hadn't noticed, housing prices have stagnated. My house has gained 2% value in the last five years; not exactly a big return for a flip.

There is nothing wrong with derivatives and short sales. What we need is better transparency on what is actually being traded. Mortgages being granted to people who couldn't afford them is what caused the housing collapse, not the derivatives they were packaged in.

I do agree with treating capital gains as income. What difference does it make where the money came from? Income is income. If everyone paid 10% on the total income they made, I bet we'd see an increase in tax revenue. Last year there were more people who paid no taxes than there were people who did pay. The system will never work if that's happening and the class divide will only widen.

Bring the troops home (except where needed to finish cleaning up, i.e. Afghanistan) and cut the military budget in half. Use the money to pay down the national debt. Once we're debt free and have a surplus every year, then we can start talking about increasing social programs.