How to lower unemployment permanently

Without a strategic plan to tackle the key issues affecting the U.S. economy, the clueless members of Congress, except for a handful of representatives led by Ron Paul, will create more and more gimmicks to the deal with the loss of more the 8 million jobs since the recession began two years ago.

Yesterday, the House of Representatives passed a another gimmick, a $35 billion bill that contains “tax cuts and subsidies for infrastructure bonds issued by local governments with…$20 billion in transportation money.”  The bill would give employers a temporary payroll holiday and a $1,000 tax credit if workers stay on the job for at least a year.A strategic plan for a free America includes abolishing the income tax and phasing out Social Security and Medicare, for starters.

Beginning to dismantle the welfare state should be our highest priority.  A nation of independent individuals, families,  businesses, and nonprofit organizations, should be at the top of the agenda in Washington DC.    Instead, the Obama administration is creating new programs and extending benefits to the unemployed, making them even more dependent on the government for their basic needs.

The unemployed are a huge financial drain on taxpayers.  The unemployed collect unemployment insurance, and may be eligible for food stamps and other welfare benefits.

To begin the restoration of a free America and reduce the unemployment rate,  all out-of-work Americans should now and forever be exempt from the federal income tax and payroll taxes.  Employers would also be exempt from the payroll tax when a newly unemployed worker is hired.  (To prevent employers from firing workers and hiring the unemployed, employers would be exempt from payroll taxes as long as they do not replace current workers with unemployed workers.)  This would be the beginning of the end of these taxes for all Americans.  Within five years the income tax will be abolished for all workers and within ten to twenty years payroll taxes will be a thing of the past.

To pay for future Social Security and Medicare benefits, given that funding for these programs will be ended in about twenty years or less, will be discussed in an upcoming post.  In the meantime, the unemployed should get back to work soon, because they will have an enormous  incentive to find work and keep the fruits of their labor out of the  federal tax man’s hands and be on their way to financial independence.

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