What we really need to do is end all sales taxes and increase income tax. If we are going to have an economy that is based on 70% consumer spending, then we need to make sure that it is easy for people who are willing to spend money to do so.
A person who makes $30,000 a year, and is taxed at 10% will spend the remaining $27,000.
A person who makes $10,000,000 a year and is taxed at 40%, I bet will not spend the remaining $6,000,000 a year. Sure, money will, and should be saved, but again, if we base our economy on consumer spending, then having 222 people with $27,000 take home is better then 1 person taking home $6,000.000. I would like to see people making under $250,000 have income taxes lowered and people making more then $5,000,000 pay as much as 70-90%.
Look at what this country accomplished in the 50-70s. We taxed the very rich at 90%. With that money we build the interstate highway system. We build schools, hospitals, police stations, bridges, fire stations, power girds and flew to the Moon. We fought wars in Korea and Vietnam, on the books. (Yes we did borrow money to help, but at least it was debt to ourselves.)
We had an economy based on building things, not pushing around money on paper. A person could find a job that could feed the family, and put the kids through college with only one parent working. Now teens are fighting with college grads for jobs at Burger King.
Before Regan, we used to be the largest importer of raw materials, and the largest exporter of finished goods. We used to be the largest creditor in the world. Now the reverse is true. We ship our raw materials to China and ship back finished goods. We are the largest debtor.
The solution is to not sunset the Bush tax cuts, but to end the Regan tax cuts.