Issue Position: Transforming the American Economy

Issue Position

With the national unemployment rate standing at 7.7% (that's 12 million Americans unemployed), 9.5 % in California and 10.6% in Los Angeles with even greater joblessness in the Latino and particularly the African-American community (almost 20% last year in Los Angeles) we are seeing the great lakes of economic opportunity in this country drying up before our eyes. With a national debt climbing beyond 16.8 trillion dollars, a national deficit of over 1 trillion dollars, and GDP growth last year a modest 2.2%, we are ensuring that these waters will never again be filled.
The U.S. economy can thrive again, but it will require practical economic solutions that can survive politically in our polarized government. The Wood Plan calls for several measures to ensure a return to aggressive growth in our economy, increased employment, and the reduction of our debt and deficit to manageable levels.

Step 1. Tax Reform: Lowering the tax burden on the middle and working class, lowering the tax burden on business's and investors, while flattening and simplifying the tax code will stimulate the vital forces of demand and supply that together will reinvigorate our economy. Rather than the current 7 rates (which call upon Americans paying between $9,000 and $33,000 to pay 15%, and Americans making between roughly $183,000 and $400,000 to pay 33%) my reform package consolidates these to only three:

40% for all those earning 1 million dollars and more a year.

20% for those making between $250,000 and $1 million.

10% for all those making less than 250 thousand dollars a year.

These adjustments will unleash demand in our economy, without which there is no incentive for businesses to hire.The above income tax decreases will also encourage small business hiring. But to make it easier for companies to hire and take advantage of this demand, we cannot have non-competitive corporate and investment rates which stifle growth. Additionally then, the Wood Plan calls for:

7.5% long term capital gains rate (down from 20%).

20% corporate tax rate (down from 35%).

Limiting loopholes and deductions to help manage the deficit and simplify the tax code.

Step 2. Welfare and unemployment reform: With poverty and unemployment high in the United States, and epidemic in the inner cities of the 43rd district, it would make neither moral or economic sense to eliminate or reduce unemployment and welfare aid to people living in hard hit cities such as Inglewood and Los Angeles. Yet funding an unemployment and welfare system that does too little to incentivize hiring and achievement is just as wrong. Successful reform in this area, perhaps more than anything else, can serve to radically transform the economic outlook of the urban poor in America. It is part of helping to move us from a social safety net, to a social spring board. It includes:

Linking every dollar given to the long term, able-bodied unemployed to a vocational, an educational, company training or otherwise skill based program that will ensure that the monies spent on aid to those in need and unable to find work in a languishing economy will have attractive skills to make them desirable in the labor marketplace, giving them foundation from which to spring upwards through society.

Incentivizing the hiring of individuals coming through such programs via various tax credits.

Ensuring as much as possible the guaranteed hiring of individuals coming through such programs via the establishment of public-private partnerships with business's large and small meeting certain preset criteria to develop specific retraining programs around the symbiotic labor needs and requirements of particular companies.

Step 3. Entitlement Reform: See Social Safety Net to Social Spring Board.

Step 4. Immigration Reform: See Streamlining the Immigration System.

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