08/08/2011 04:57 pm ET | Updated Oct 08, 2011

Reforming Healthcare, Social Security, and Tax codes

In order to compete in the global economy and provide the jobs and revenues for economic recovery, it is necessary for U.S. companies to be relieved of the stifling twin burdens of healthcare and pension obligations. Likewise, local and state governments and their public authorities are going broke from their unaffordable healthcare and pension obligations and must be relieved of these burdens to maintain fiscal and social stability. The federal government must (1) provide practical, affordable, revenue neutral universal healthcare [by expanding and incorporating into our existing Medicare System the best features of the best universal healthcare systems worldwide, with effective cost controls and operational efficiencies, medical records sharing, provisions for continual system improvement, a fee structure based upon quality care, hub diagnostic centers, ban doctor owned medical testing companies and all referral or product kickbacks from any source, tort reform (Medicaid would be eliminated)], (2) restrict elective and cosmetic surgery, (3) reform Social Security, and (4) Adopt a Flat Tax system to afford them that would produce more revenue without raising current tax levels.

Affordability: Government should institute a flat tax revenue system with rates based upon Congressional Budget Office and/or the Office of Management and Budget calculations to meet all government obligations and programs including debt service. In addition there would be dedicated separate surcharge rate increases to cover actual individual costs of the Healthcare, Social Security, and Defense Programs. This is the most feasible means to finance Universal Healthcare and Social Security, control Defense spending and restore fiscal and social stability. Moreover, said surcharges would create an electorate watchdog effect on exploitation, efficiency, effectiveness, and cost containment in these programs. Most tax credits and subsidies would be ended.

(A) An individual flat tax: would commence above the poverty level guidelines for individuals and families as published by the U.S. Department of Labor up to $250,000, another rate up to $500,000 and a third rate above that income level. All tax deductions, tax deductions would be eliminated as would gift and estate taxes. This would be a progressive tax program and the poor wouldn't pay taxes. Increase FICA, if necessary.

(B) Two tiered business flat tax rate: (1) One Flat Tax rate on domestic business income. (2) Another lower flat tax rate on profits from overseas operations and/or subsidiaries or joint ventures (to offset foreign taxes) conditioned upon repatriation of profits to increase domestic liquidity, improve U.S. balance of payments, reduce current account deficits, and help pay for Universal Healthcare and Social Security.

All individual and business tax shelters, loop holes, and tax havens would be eliminated (producing more revenue at lower tax rates) as would all business and private medical, hospital, and pension plan expenses. Qualified business costs be expensed and capital investment for plant and equipment credited via IRS schedules. Only business tax incentive credits for domestic job creation and R&D would be allowed.

Social Security pension eligibility extended to age 67 except for disabled or indigent and benefits indexed according to need. Other than Social Security, no Government, education, union, or employer pensions permitted (eliminates corruption and fraud and avoids unsustainable financial burdens). Additional Social Security option plans offered to increase benefits. Only single pension allowed. No double dipping. In addition to Social Security, only Roth type IRA would be allowed individuals with authorized private sector regulated investment institutions with transparency, full disclosure, and fee competition. Mandatory tax free conversion of IRA and 401K for accounts under $400,000 into (1) Roth IRA's with a modest progressive conversion tax levy on those accounts over $400,000 based upon discounted present value of actuarial pension entitlement schedules that could be paid in installments or (2) transferred into a special government inflation protected bond issue with flexible retirement provisions on the same basis (another Federal funding resource).

This would increase government and private sector efficiency and liquidity, reduce overhead and risk, and help restore lost individual pension values from recession. Full disclosure and transparency requirements and minimum equity capital ratios would be set in all financial institutions and transactions and fair and equitable usury, bankruptcy, and home foreclosure (with judicial cram-down) laws set for protection of individuals.

Furthermore, history shows that most great empires have succumbed to unaffordable foreign military adventures and profligacy and severe economic disparities at home. Consequently, the U.S. should reduce its foreign military obligations and military spending so it can afford decent healthcare, livable social security levels, superior educational and skill training systems, maintain living standards, enhance global competitiveness, aid innovation, and create jobs in all economic sectors, especially the high-tech light industrial sector. A nationwide High-tech Export Free Zone Light Industrial Job Development Program (EFPZ) for the country's major urban centers (which contain over 70% of the population) that incorporates education, high-tech, and apprenticeship training partnerships between industry and public education systems is the vehicle to opportunity, equality, and prosperity. Harry L. Langer