Tax Case

Tax case: Balance the budget

1, I notice that there are many negative numbers in the Excel, which represents revenue of that program. Also, our mission is to cut the spending not the revenue so that I add up all the revenue from Discretionary programs, which is 119,875 million. As the net spending of discretionary program is 1.4 trillion, the actual spending should be 1,400,000 million plus 119,875 million, which equals to 1519875 million. Our cutting goal is 1.3 trillion, which is 85.53% of all spending.

I create a two-step approach to cut the budget. The first step is to cut every spending by 85.53% so that we will cut exact 1.3 trillion. The second step is to adjust some categories either up or down by reasonable amount, but keep the total cutting the same. Details are shown on chart. Q1 adjusted represents the remaining after cutting 85.53%. Q1 final shows the final adjusted numbers. In this case, I cut National Defense spending by an additional 15%, since it costs the most in discretionary spending, and allocate that money to elementary education and health programs, which I think are more important to people, in a pro rata basis.

2, Since spending in non-discretionary is hard to cut unless significantly change its program structure, I would merely cut the spending of Medicare program by 30%. The reason is that I think some funds of Medicare program are abused which results of billions of dollar loss per year. This cut saves 145,697 million dollar and our goal is down to 1,243,304 million. Then I would cut this amount merely in discretionary spending. By using the same method as in Q1, each spending is reduced by 82.53% in this case. Also, National Defense is taking another 15% cut to finance education and health program. Details are shown on chart.

3, Since we cannot cut interest on debt, we have to cut more in other non-discretionary programs. In this situation I would just cut the average cutting percentage 93.12% (1.8/(2.163-0.229968)) to...