T H E S U S T A I N A B L E F U T U R E A C T B Y : J A C K B O T E I N T H E O B J E C T I V E The Sustainable Future Act is a bill that if passed will safeguard America's future. As a nation, we are at a crossroads: we can choose to protect our planet from disastrous global warming, we can choose to help those who need it in our country, we can choose to shore up our budget and we can rebuild our infrastructure. The other option is to pass on compounding debt, broken infrastructure, a damaged environment and a poorer country to the future. To make these necessary reforms we need to discuss unpopular ideas and make tough decisions. This means implementing new taxes and targeted budget cuts, with new social safety nets to offset the regressive nature of some of these taxes. These changes will require a new era of bipartisanship from our elected officials and an understanding of the need for quick action on these issues. 1 Sustainable Future Act P H A S E I N The Sustainable Future Act will be phased in over a period of six years, to allow the economy to adjust to the reforms outlined in this bill. The statistics are based on 2020 figures with 2% annual inflation. The chart below shows the bill's projected revenue over the phase in period. 2 Sustainable Future Act year one year two Year three year four year five year six 1,250 billion 1,000 billion 750 billion 500 billion 250 billion 0 billion 170 bn 342 bn 514 bn 682 bn 858 bn 1,030 bn C A R B O N T A X The carbon tax instituted in the Sustainable Future Act is assessed at $50 per metric ton of carbon dioxide emitted, estimated to generate $275 billion in year six of the bill. This carbon tax would be imposed on all emissions at the initial production source and each step along the way, allowing the tax to be properly collected. All domestic emissions and imports are counted in the tax. Exports however, are exempted, with other countries encouraged to tax our exports under a similar carbon tax. This is a simple legislative means of discouraging carbon dioxide emissions without the use of subsidies and mandates. The goal of this tax is to accelerate the movement to less carbon intensive fuels such as natural gas and other alternative energy sources such as nuclear, solar, wind, geothermal and tidal power. 3 Sustainable Future Act 5.5 Billion tons of carbon × $50 = $275 billion R E D U C I N G T H E B U D G E T D E F I C I T Over the past two decades the United States has accumulated close to $16 trillion of federal debt. This jeopardizes our future ability to raise money quickly in times of recession and war. Under this bill, the federal budget will only be allowed to grow at half the rate of inflation. This will leave a deficit of $150 billion in year six, with $923 billion of the deficit reduced using money allocated in this bill. This will slow the growth of the debt, maintaining confidence in the US government and preserving the dollar's status as the world's reserve currency. 4 Sustainable Future Act 87% reduction of the federal budget deficit by year 6 C O N S U M P T I O N T A X The concept of a federal consumption tax is commonly implemented around the world. It is known in Europe and Asia as a Value Added Tax (VAT). This is a highly effective means of taxation because unlike most taxes it does not tax positive behaviors such as income generation and savings. Under this bill, the consumption tax rate would be phased in over eight years, growing 0.5% a year to 4% by year six. This is estimated to generate $650 billion by year six. This which will substantially fund the reforms outlined in this bill, as it is by far the largest revenue source. Additionally, a rate of 4%, phased in over six years is modest enough that it is unlikely to significantly alter consumer spending behavior, preserving the current status quo of the economy. 5 Sustainable Future Act 4% consumption tax in year six = $650 billion in 2020 dollars B U D G E T C U T S 6 Sustainable Future Act Budget cuts are by far the most difficult decision to make. However, they are required to maintain a balanced budget. 0 billion 25 billion 50 billion 75 billion $40 billion (5%) cut to military Reducing entitlements for the wealthy Ending energy subsidies B U D G E T C U T # 1 : M I L I T A R Y The Department of Defense deserves a large share of our budget. However, US military spending has increased for the past five years in a row and is already larger than the next eight military powers combined. Therefore, a 5% cut ($40 billion) to military spending is necessary to preserve America's fiscal future. This cut is to be allocated by the defense department, preferably in the form of targeted overseas military reductions. 7 Sustainable Future Act 95 % 5 % Remaining Budget ($750 billion year 6) Budget cut B U D G E T C U T # 2 : E N T I T L E M E N T S Similar to the Defense Department, the Medicare and Social Security programs fulfill vital roles in providing healthcare and retirement income for America's elderly. Under the Sustainable Future Act, these programs will be reformed to serve only those who truly need their benefits. This means adding income and savings maximums in order to qualify for benefits. These rules will streamline spending by $75 billion in year six and prioritize funds for those who are in the most need. 8 Sustainable Future Act $75 billion cut from means testing Medicare and Social Security B U D G E T C U T # 3 E N E R G Y S U B S I D I E S The United States has conflicting energy policies with subsidies and mandates for fossil fuels and sustainable energy. With the implementation of the carbon tax, the need for any renewable energy subsidies would be eliminated. Specifically this means phasing out the solar and wind tax credits, the electric vehicle tax credit and ending accelerated depreciation for oil and gas wells. This phase out would occur over six years, with all federal commitments still being honored. Eliminating these subsidies will free up $25 billion by the year six of the phase out. This money will be allocated for programs that help people instead of politically connected industries. This is an example of the Sustainable Future Act putting policy over politics and doing the right thing for the taxpayer. 9 The Sustainable Future Act $25 billion cut in energy subsidies E A R N E D I N C O M E T A X C R E D I T E X P A N S I O N The earned income tax credit (EITC) is a highly effective anti-poverty program. It provides refundable tax credits to families in need, on the basis of income and the number of children. Under the Sustainable Future Act, this credit would be expanded by 50% to increase benefits for those currently eligible for the EITC and to expand the pool of recipients. This will be accomplished through the allocation of $40 billion in new funding. 10 Sustainable Future Act current EITC spending 71.9% New spending 28.1% I N F A S T R U C T U R E The status quo is not sufficient for American infrastructure and federal assistance is needed. In the Post War years, the Interstate Highway System came to be, largely due to a generous federal highway fund. The Sustainable Future Act proposes a new federal infrastructure fund, block granted on a per capita basis to the states to be used for the construction and maintenance of public infrastructure projects. These uses include: bridges, dams, highways, rail, airports and bus and train stations. This fund would grant $100 billion in year one, with future allocations to be determined by Congress. 11 Sustainable Future Act $100 billion infrastructure fund (≈$303 per capita) 12 Sustainable Future Act 40% It is usually a sleek , colourful , high - gloss publication $1,080 BILLION Carbon Tax Consumption Tax Energy Subsidy Elimination Military spending cuts Entitlement cuts 750 Billion 500 Billion 250 Billion 0 Billion The bar chart below represents the estimated $ 936 billion raised from the creation of a carbon tax , consumption tax and budget cuts These figures are for year six of the phase in Sources 13 Sustainable Future Act 40% It is usually a sleek , colourful , high - gloss publication $1,080 BILLION Budget Deficit Reduction 87 % Infrastructure Upgrades 9 3 % The pie chart below represents the funds spent eliminating the deficit , improving infrastructure , expanding the Earned Income Tax Credit and creating the Future Use Credit These figures are for year six of the phase in Uses 39% EITC increase