Category Archives: Taxes

We Know Better, Part 9: Economics 101: A Call for sanity

If we managed our family checkbook like the federal government, we would all be bankrupt. It is one thing having deficit spending in wartime or particular crises. It is quite another to simply print money, sell T-Bills and leave $30T for future generations to manage. It is immoral, unconscionable, and terrible economics. We have tried to be a warfare and welfare states since the 1960s and we must alter course.

In this essay, I am not ranting about the current administration’s out-of-control spending and highly political largesse for voters. Anyone can do that. I am not going to lambaste both parties for their refusal to trim waste and remember that all the money they spend in Washington, D.C. originates with taxpayers. I am going to offer a way forward that is at first glance naïve and simplistic, but upon further reflection, incorporates the insights of leading thinkers of the last half-century and is non-partisan and non-ideological.

I think we must argue about spending priorities, just like the family dinner table, a small business, or the corporate boardroom. I think we must argue about a fair tax system, from flat taxes, modified flat taxes, progressive tax rates, and levels of corporate taxation. Let the debates begin in the House of Representatives where they belong, and let Congress do its job.

We also forget that decentralized administration is almost always more efficient and fairer, so it should be a long-term priority to have our states, counties, and cities receive a larger portion of our tax dollars and Washington, D.C. much less.

OK, here are three simple points that will transform our economic future, without starving anyone or leaving America defenseless.

ONE: We must achieve a truly balanced budget ASAP, preferably in the next five years, beginning with significant deficit reductions and then living within our means. What does this mean? Here are some ways forward under this heading:

  • Reduce ALL federal spending by 15-20% across the board, targeting inefficiencies, encouraging retirements, rewarding departments under budget, and placing moratoriums on discretionary spending. (Oh, and place all elected and appointed officials back in the social security system and privatize their pensions.)
  • Look to eliminate unneeded agencies, restore as many functions as possible back to state and local governments, and welcome input from business leaders on more effective administration.
  • Decide ahead of time that we must live within our means. Need more money for a particular program that is working? Then find new revenues that are not hurting the productive and perhaps cut other budgets if needed. 

TWO: We must transform our overly-complex federal tax system. We have higher corporate tax rates that many “semi-socialist” nations in Europe. The top 10% pay more than 60% of the taxes and almost half of all American pay little or nothing. Here is a pathway forward:

  • Move to a modified flat tax that is revenue neutral from the baseline of a selected year, like 2019 (when the economy was good). Start at 5% and set the cap at 20%. Do the math. There is enough money.
  • Over a five-year period, eliminate all personal deductions – yes, ALL deductions, including charity, mortgage interest, etc. If I know I will never pay more than 20%, then I am still incentivized to earn more. If I know that at least 5% will be paid, I will aim to work hard and advance.
  • Corporate tax rates must be fair and reasonable and we must stop the cronyism that exempts some elites and places the burdens on the rest of corporate America. Tax only profits after accounting for expenses, R&D, etc., and do not tax dividend, stock, and other capital gains above the lower rate. I recommend 20% as a maximum rate.

THREE: This is the hardest of all: We must stop looking to the federal government to directly solve problems best tackled by more local private-public partnerships. WE DO need the universal ethics of the federal government, but not the ubiquitous administration. For example, an FDA is good, but a government-run meat company would be terrible. Here are some first steps:

  • End all loans for education. Encourage grants and scholarships from states and private sources. Continue with scholarships for veterans and particular fields that serve the common good.
  • Streamline military and welfare agencies so that the cost of services is reduced and the frontlines are actually helped instead of everything being entangled in a bureaucratic mess.
  • NO taxes on personal inheritances. It is immoral to tax again monies already taxed.

The burden for these changes is on us, the American citizens that vote. Will we see the moral problem of spending or capitulate to fatalism and hope we get our share? Our grandchildren need our courage! And if we make these changes, our economy will again be the envy of the world.

Positive Politics, Part 1

Dear Democrats,
We need you as an inclusive, principled party, ready to debate and pass laws that benefit all Americans. Alas, your radical wing is obsessed with Trump and mandates that can never be funded.

You desperately need to recover the best of FDR-Truman-Kennedy-Humphrey if you are going to welcome many back in the fold.

Here are some tips:
Stop hating moderate to conservative Jews and Christians for their views on marriage and morality. If you welcome even more conservative Muslims, why exclude other principled religious adherents?

Demonstrate fiscal responsibility and bring a budget that leads toward less debt.
Agitation, protest and resistance are easy compared with governing. Clean out the corruption at the city and state level. Stop the class envy and offer economic policies that foster private-public partnerships. Be leaders of racial reconciliation, not the catalysts of more animosity.

Simplify the tax code, with special concern for those who are struggling. Hyper-progressive tax laws hurt the economy. Welcome pro-life social moderates back. End the campaign finance hypocrisy. You love “dark” money just as much as your opponents.

Welcome immigrants and create pathways to citizenship with reasonable security and the end of registering non-citizens.

Friends, we need civil debate and proximate justice.

Vision 2016: Part 3: Domestic and Economic Issues

Vision 2016: Part 3: Domestic and Economic Issues

Whenever altruists speak of vision, cynics chortle with, “Get real – politics is dirty business.” While the politicians are not among the favored groups in our land, they are elected to represent us and pass laws that – according to the Constitution – will further “domestic tranquility.” As we consider vision that people of conscience can embrace for America’s preferred future, here are some insights for domestic policy. All require integrity, consideration of future generations and some measure of thoughtfulness toward others. These virtues are sometimes in short supply within the environs of Washington, D.C.! Our experiment in liberty depends upon consideration of the common good. Here are some policies and principles that our public servants should consider:

  • Poverty is ameliorated through personal, social, spiritual and political cooperation, including vibrant private/public partnerships, ethical entrepreneurship and well-administrated compassion.
  • Economics is a moral science, with concern for value-creation, long-term flourishing and adaptability to global and local changes.
  • Environmental stewardship and economic flourishing are partners for good, not rivals for power. It is possible to care for people and the planet and have healthy profits.
  • Private property ethically managed is a foundation for wealth-creation.
  • Universal healthcare is a moral mandate, administered as locally as possible, with federal ethical oversight and public/private partnerships that secure excellent, cost-effective care, with no violation of religious principles.
  • Best practices help us reign in the costs of domestic and foreign aid programs without reducing services or hurting the most vulnerable.
  • Balanced local, state and federal budgets are the norm, not the exception.
  • Local and state governments still matter and activist judges cannot overturn the reasonable will of the people.
  • The minimum wage should be phased out in favor of natural pricing and an increased Earned Income Credit.
  • Immigrants are welcome, with proper screening, border security and accountability from business, educational, political and religious institutions and the immigrants themselves.
  • The war on drugs includes recriminalizing marijuana sale and use (with very restricted exceptions for particular patients under a doctor’s care), destroying the cartel fields wherever they are found and holding our neighboring nations accountable for their corruption.
  • Mental health and addiction needs are properly funded and no one is without help when needed.
  • New businesses are encouraged with local, state and federal regulators stewarding resources for generations to come while opening doors for wealth-creation. The EPA is demilitarized and eminent domain is used selectively.
  • Tax systems are simplified, IRS powers no longer violate the Constitution and more revenues are spent locally.
  • Our welfare systems are humanized and reformed, with proper incentives to find work. Care for the vulnerable is improved, while rooting out corruption and fraud.

These are some of the policies that will help ensure improved economic and social conditions now and in the future. Changes in the IRS and minimum wage are uphill fights, with so many special interests competing for resources. The Clinton-Gingrich cooperation of 1994-1997 helped four million people get off welfare and find sustainable work.

The dignity of work, sustaining families and offering everyone access to opportunities to flourish are vital for stability and a thriving society. None of these suggestions work without personal virtue, the rule of law and property rights. Justice and responsibility are inseparable and fairness is not the guarantee of uniform outcomes. May we again find our way toward creativity and community, initiative and interdependence.