Updated: December 19, 2012 12:30PM
A way to keep nation away from ‘fiscal cliff’
The following compromise on taxes, spending and revenues — if agreed to by Republicans and the White House — would prevent the country from going over the “fiscal cliff” and give both sides a “win”:
Adjust the present Bush tax cut rates as follows:
• 35 percent rate to 36.5 percent
• 33 percent rate to 34.5 percent
• 28 percent rate to 29 percent
Keep all other rates at present level.
Lower the tax rate on businesses with fewer than 100 employees to zero for 10 years on profits generated from operations in the United States. Lower the rate to 5 percent on businesses with more than 100 employees on profits generated from operations in the United States. This would create jobs, boost the economy and provide additional revenues.
An agreement to the reform of Social Security and Medicare to ensure viability of programs for next 50 years. Agree to limit the increase of the debt limit to $1.5 trillion. Agree to increase revenues to at least 19 percent of gross domestic product (GDP) and reduce spending to no more than 21 percent of GDP.
Increase the new debt limit by no more than $1.5 trillion.
To extend the Bush tax cuts intact — without agreements to reform Social Security and Medicare, and revenue enhancement — would be worse than going over the fiscal cliff. Spending $1 trillion-plus more than existing revenues is simply fiscal insanity.