In a recent article in the Deseret News ("Our financial tsunami," March 22), economist Jeff Thredgold has persuasively demonstrated that "America's financial tsunami" is our "country's greatest threat." Sadly, the only remedy he proposes is "getting a handle of federal spending."
While agreeing that federal spending must be curtailed, I believe that additional steps are needed to recover from our nation's financial tsunami. Serious efforts must be made by the Obama administration and Congress to balance the federal budget.
Currently, annual federal expenditures amount to something between 20 and 25 percent of the Gross Domestic Product (GDP), while the annual federal income is about 16 percent of the GDP.
It is not reasonable to expect to balance the federal budget by simply reducing expenditures. Means must be found to also increase federal revenue.
My first suggestion is to remove the $106,800 ceiling on the Social Security tax and to begin collecting Social Security tax on all of a person's earned income.
My second suggestion is to adopt some kind of reverse means test that will reduce or discontinue Social Security payments to retirees whose other income, from whatever source, exceeds specified amounts.
My third suggestion is to tax income from investments at the same rate as income from wages and salaries.
My fourth suggestion is to restore a more progressive tax schedule so that the percentage of income tax increases as a person's income rises (for example, from $40,000 to $100,000, or from $250,000 to $500,000, etc.).
My fifth suggestion is to close the loopholes in the federal tax code that provide preferential advantages for certain individuals and companies.
Common sense tells us that federal expenditures can't possibly be reduced enough to balance the federal budget.
Federal income must be increased, but not by selling national treasures to the King of Saudi Arabia. The sensible and fair way is for the Obama administration and Congress to have the courage to build a new tax structure that is both progressive and friendly to free enterprise.
Boyer Jarvis is a resident of Salt Lake City and a retired communication professor from the University of Utah.