FINISHING THE CLINTON/BUSH PRESIDENCY (via Glenn Dryfoos):

How to get the country to solvency on entitlements (George F. Will, February 7, 2010, Washington Post)

[Paul] Ryan's map connects three destinations: economic vitality, diminished public debt, and health and retirement security.

To make the economy -- on which all else hinges -- hum, Ryan proposes tax reform. Masochists would be permitted to continue paying income taxes under the current system. Others could use a radically simplified code, filing a form that fits on a postcard. It would have just two rates: 10 percent on incomes up to $100,000 for joint filers and $50,000 for single filers; 25 percent on higher incomes. There would be no deductions, credits or exclusions, other than the health-care tax credit (see below). [...]

Ryan would eliminate taxes on interest, capital gains, dividends and death. The corporate income tax, the world's second-highest, would be replaced by an 8.5 percent business consumption tax. Because this would be about half the average tax burden that other nations place on corporations, U.S. companies would instantly become more competitive -- and more able and eager to hire.

Medicare and Social Security would be preserved for those currently receiving benefits or becoming eligible in the next 10 years (those 55 and older today). Both programs would be made permanently solvent.

Universal access to affordable health care would be guaranteed by refundable tax credits ($2,300 for individuals, $5,700 for families) for purchasing portable coverage in any state. As persons younger than 55 became Medicare-eligible, they would receive payments averaging $11,000 a year, indexed to inflation and pegged to income, with low-income people receiving more support.

Ryan's plan would fund medical savings accounts from which low-income people would pay minor out-of-pocket expenses. All Americans, regardless of income, would be allowed to establish MSAs -- tax-preferred accounts for paying such expenses.

Ryan's plan would allow workers younger than 55 the choice of investing more than one-third of their current Social Security taxes in personal retirement accounts similar to the Thrift Savings Plan long available to, and immensely popular with, federal employees. This investment would be inheritable property, guaranteeing that individuals will never lose the ability to dispose of every dollar they put into these accounts.

The whole West is headed in this direction: the Third Way and Neoconomics. All we're arguing abpout is the pace at which we get there.

Posted by Orrin Judd at February 8, 2010 8:18 PM