Opt to Buy American Made Act
Synopsis: This is an idea that would do 2 things: A.) Make all American manufactured goods deductible from US personal income taxes. B.) Switch from the current mortgage interest deduction to a mortgage principal deduction from federal personal income tax.
The idea:
Buy American Made Act: A blueprint to increase the employment and wealth of Americans of all income levels by positively influencing the spending motivations of US tax payers.
The purpose of this Act is to :
· First, allow for quick glance “Percentage American Manufactured-ness” of goods purchased in the United States by Americans and American businesses.
· Second, create a positive tax incentive for businesses and the general populace to purchase and enjoy American manufactured products.
· Third increase employment opportunities in the United States by positively growing the sum total of American quality manufactured goods consumed by Americans, made in America, by American workers. (Job creation to meet demand)
· Fourth, create a tax incentive for middle class home owners to pay cash toward principal on American home mortgages, increasing American middle class homeowner’s personal net worth through expedited mortgage principal payments. (As opposed to deducting the interest.
Possible way to implement:
Einstein once said, "Make everything as simple as possible, but not simpler"
Year 1 Getting Started
Directly after the Buy American Made Act’s passage, all US owned manufacturers would be notified of the following year’s permanent change to US tax code. They would be advised that they have the option to enroll in the BAM program. Once enrolled they would be able to affix “Grade A USA”, “Grade B USA”, “Grade C USA” or “Grade D USA” logos to their products. “Grade A USA” would be 95% or greater manufactured in the US. “Grade B USA” would indicate 80-94% manufactured in the US. “Grade C USA” would indicate 60-79% manufactured in the US. “Grade D USA” would indicate 30-59% manufactured in the US. Any product less than 29% would not be eligible for the program.
The grades would be associated with the UPC or serial numbers of the products, which would be entered into a BAM database. The database would be made available to the public on-line and to credit card companies wishing to participate in the BAM deductibility program starting the following year.
Also during this time American citizens and American companies would begin the free, optional, BAM Card enrollment process. The official federal BAM photo ID would be associated with the citizens or companies Tax payer ID and would also be a valid form voter ID.
Year 2 Part 1: Deduction tally’s begin
On January 1, one year after the initial phase of the BAM program, all properly registered American manufactured products would be counted as tax deductible by some percentage of the pre-tax, post discount, purchased price.
Grade A = 100% federal tax deductible
Grade B = 60% federal tax deductible
Grade C = 30% federal tax deductible
Grade D= 10% federal tax deductible
The BAM card will be used as the primary way to keep track of the purchases by card holders.. Other ways to use the BAM card are to register it with the credit card companies and banks which can integrate the BAM credentials with the credit/debit card itself. There may also be tax advantages for the CC companies and banks to charge a lower interest rate for the BAM identified good balances kept in revolving credit lines.
Gift cards can also be associated with the BAM card. In the instance where the gift cards recipient buys a qualifying product, the proper amount will be added to the deduction total of the gift card purchaser. (Double BAMing is not permitted. Only one BAM card can be used per purchase.)
All principal payments paid for the loans for American new manufactured goods (Including automobiles and other sizable purchases by individuals and companies) also will be deductible, including existing loans. This deduction applies only for the purchase of new, never used manufactured goods.
Those who wish to not have the purchases electronically monitored can still apply for the card and manually keep UPC, serial number records and receipts of products purchased and submit them and their sum total with their tax return.
Proof of purchase and product retention is paramount for this system to be a success. If a product is returned, it will act as positive income or a subtraction from the deductibility totals the following year. If no BAM qualifying products are purchased the following year, back taxes will be owed for whatever amount that would have been owed, had the deduction not occurred.
Year 2 Part 2
Part 2 will be exercised concurrently with Part 1. From Jan 1 forward, all principal payments made on a mortgage loan will be 100% deductible (limits may be $25,000-$100,000 per year). Other restrictions will be the same as the mortgage interest deduction had been in the past. There will also be limitations as far as loan size, which professional actuaries will determine before enforcement. During this first year of the BAM program, the mortgage interest deduction will be lowered to be 25% deductible.
Year 3
At the beginning of the third year, mortgage interest will no longer be deductible. In its place will continue to be the BAM program and qualifying Mortgage principal deductions. With these new incentives in place there will be a more beneficial way to shop in America. American shoppers will have a clearer sense as to where they products are made and can make informed decisions when spending money on day to day purchases. The tax burden will be lowered for the middle class, the real cost of goods will decrease, and with the added demand for Grade A USA products, employment opportunities will begin emerge.
This will also encourage the job creators to create jobs to fulfill the demand for the deductible goods and competition to be the “Most Grade A USA” manufacturer of whatever widget of zingbat they make. It makes a positive feedback loop. When employers give an employee a raise, that worker will at least think about purchasing a possibly more expensive American good due to its deductibility and in turn refund the following year.
rJeschelnig