Simulations on the Penn Wharton Budget Model show that, over a 30-year period, it is possible to generate a 38% reduction in federal debt, push GDP higher by 21%, reduce health insurance premiums by 27%, and produce almost universal health insurance enrollment.
What is required to achieve these results is boosting capital, labor, and productivity, while reducing regulation and providing incentives for growth.
Specifically, key policy changes:
– Tax system: Tax capital gains and dividends at ordinary rates and reduce tax rates to 28% versus 37% by eliminating most deductions. At this lower rate, ordinary/capital distinctions no longer matter.
– Entitlements: Protect those 50 and over but raise the full-benefit Social Security retirement age from 67 to 70, raise the Medicare eligibility age from 65 to 67, and convert Medicare to premium support.
– Immigration: Broad-based reform that requires new immigrants to pay taxes and purchase health insurance without government subsidy.
For more details see here.
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