(…’cause we taxpaying voters elected Twinkies to the White House, Ho-Ho’s to the Senate, and Ding Dong’s to the House)

The fiscal cliff resolution merry-go-round in Washington keeps on keeping on because our politicos there are still playing campaign one-upmanship games with each other, instead of getting on with the business of governing…as they should, and, we’re doing a lousy job of getting on their cases about that. So, what we, the taxpaying voters, need to do now is to jump in with both feet and let them know in no uncertain terms how we want to see this issue resolved.

As a first step to do so perhaps we need to come up with an outline for producing a – How To Avoid Fiscal Cliffs For Dummies – manual to help them along, keeping in mind that’s because we were dumb enough to elect a bunch of Twinkies to the White House, HoHo’s to the Senate, and Ding Dongs to the House. With a crew like that it’s a wonder our ship of state is still able to remain afloat. And you can bet that, whatever happens, they’ll make sure they’ll all have individual bungee cords attached…just in case we go over that cliff’s edge. Meanwhile, here’s our outline of what such a – how to – manual should contain:


1) To demonstrate their dedication to the principle of shared sacrifice and to display some leadership by example, let the President call an emergency joint-session of Congress to pass a binding resolution, to which he will immediately sign his affirmation of it on the spot. That is, a resolution to impose a 10% cut in pay and allowances for…the President, the Vice President, all Cabinet Secretaries, and all members of the Congress, effective 1 January,2013,  to remain in place until 31 December, 2016…as their collective contribution to the cause of shared sacrifice with the taxpayers. 

2) To further broaden the revenue base the current income tax structure to be replaced by a – Flat Tax on Gross Income From All Sources – for both individual and business taxpayers, with each category having six(6) brackets to keep things progressive, as follows:                   

a) For Individuals:   b) For Businesses:  
under $50,000/yr  3%  under $100,000/yr 4%
$ 51,000 –    $100,000/yr 5%  $101,000 – $500,000/yr 6%
$101,000 –   $250,000/yr 7% $501,000 – $5Million/yr 8%
$251,000 – $1Million/yr 9% $5Million -$10Million/yr 10%
$1Million-$5Million/yr 11% $10Million -$100Million/yr 12%
$5Million +/yr 13%  $100Million +/yr 14%

Deductions and exclusions will be limited and indexed as a percentage cap of their respective brackets. Taxes on dividends and capital gains will be eliminated.

3) The tax year will be put in synch with the government’s fiscal year, and taxes for both categories will be collected quarterly. In effect a…pay-as-we-go tax system…improving the government’s cash flow condition (thereby reducing borrowing needs), and simplifying everyone’s tax calculations and projections.                                                                                                  

4) Tax rates may be adjusted every ten years, as a percentage of GDP, but held within a range of 8-10% of GDP. Rate changes will require a 2/3 majority in both chambers.


1) The first item of expense from the gross general revenues of any given fiscal year will be a 5% set aside…3% of which will be applied to ongoing reduction of the national debt, until it drops to approximately 30-35% of GDP. And 2% of that set aside will be applied to the further increase of our bullion reserves, as collateral against that debt.

2) The remaining 95% of those general revenues will be the global available budget for that fiscal year, allocated between the three Branches of government in the following proportions:

– 78% for the Executive Branch
– 12% for the Judicial Branch
– 10% for the Legislative Branch 

These are plus/minus proportions based upon function alone, and, keeping in mind that this will be tied to GDP. As it expands or grows, so will available budget funds, fiscal year to fiscal year.                                                                                                                                                                    

3) Each Branch will further allocate funding in the same proportionate manner to all its subordinate budgetary components, down to the lowest unit.                                                                       

4) Every budgetary unit from top to bottom, will present its spending requirements as follows:

a) Fixed/Direct Unit Operating Cost Requirements 
b) Funded Program Cost Requirements 
c) Unfunded Program Cost obligations                                                                                                                                                                                                                                                                                                                       

This will provide the taxpayers with a much clearer and more transparent display of how and where their tax revenues are being applied.

5) Social Security and Medicare revenues will not be co-mingled with General Revenues, as these are derived from separate taxes, and are specifically earmarked for those programs. These will be fully sequestered from any operating budgetary requirements.

Well, if any of these ideas seem too drastic or weird for our career politicos in Washington to consider, that’s perhaps  because they are based on some modicums of common sense and logic…something that is apparently neither considered nor desired in that environment.

For a more detailed view of what such an approach might accomplish for us, go back and review our Issue No. 41 – Jul 2012