marți, 1 octombrie 2019

3 ideas how to fix US

I am not interested in US elections but I watch a discussion between Bernie Sanders and Steven Colbert.
I was surprised to hear from an US senator the "tax the rich" shout of the 'sans coulotes' from French Revolution or of the Bolsheviks.
If you tax heavily top 1% they leave the country, then the burden will fall on top 10%. These either will leave the country or not invest too much and the burden will fall under the shoulders of 25%, they will not leave the country but they will invest and buy less.'
Many Jacobins and Bolshevik were idealistic and wanted to make a better world, but didn't understood the reality and especially the historical and cultural traditions, and many Bernie supporters could make the same mistake.
The Jacobins ignored the french catholic culture, the Bolsheviks ignored  the Russian orthodox culture and Mr. Sanders ignores american culture of the personal initiative.
If he ignores this it will be difficult for him to make some reforms. Jacobins had guillotine and Bolshevik had gulags from Siberia to speed up the reforms, US president as less room for manoeuvre.

The US american will not transform themselves in socialist as the french monarchists didn't transform themselves in citizens.
The problem with personal initiative is that you must have an even playing field, that allows the best to succeed. Te american pioneer had no kings to obey, no tradition to follow.
He elected it own president and made his traditions on the go.
Now it seems the playing field is not even, it is tilted.
How  ''mom and pop'' company who pays taxes can compete with a corporation that stashes billions overseas ?
How can you compete if you are bankrupt because of an illness ?
How can you use your skills better if student loans force you to take the most financial safe career ?

Here I have 3 ideas that fix these issue that costs nothing:

1. Flat tax: Put a tax of 20% on the profit. The fiscal code is simple and corporations cannot hide the profit. It evens the playing field between small and big companies. Less bureaucracy.
Make fiscal amnesty, tax with 20% all the money that are returning from off-shore accounts.
Don't tax revenues that are made abroad. Only US is doing it.
A comparison between UK and US fiscal system.

2. Offer university scholarships for poor youth:
From what I understood US government offers some subsidies for student loans.
In a market economy the the greater demand for a steady supply increase the price.
The places in university are in steady supply, the loans increase the demand, this increases the price, making education more difficult for  intelligent but poor youth.
Why don't we use the same money to offer scholarships in affordable universities ?
Students will be saved from poverty.High school students will be motivated to work hard to get rid of bad neighbourhood and gangs.
The government money will help good universities , not some diploma factories. These money can help develop local economy, the influx of students will increase commerce and propriety value.
Without loans the prices will decrease the education will be affordable for many students. They will not need a loan anymore.
The workforce will more qualified.
All you have to do is to spend differently.

3. Health insurance and medicines: Either the government can offer a basic insurance to complement the private one either offer a scheme for current insurance to cover the poor and ill:
Make a tax deduction for the revenue obtained from poor and ill so to be profitable for insurance companies to serve this market segment
Fix the price of some medicines that are monopoly of some companies.
If you are the only holder of a patented medicine you are a monopoly and in case where it is a monopoly  state intervenes and negotiates a fair price. (A fair price can be a fix percentage added to manufacturing costs for example)
Also let medicines coming from other countries to enter in US market easily.
If a medicine is approved in EU why it is not safe to sell it in US ?
If a drug company uses money for promotion these costs must not be deductible, many bad medicines are sold because of good marketing.

But this is not communism/socialist intervention in the economy ?
No.
The communist state owned every thing, the socialist took from rich and gave to poor.
In this case the government negotiates for the citizens because it represents them. In theory.

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