tax reform

The tax system has become another emblem of the government’s seemingly insatiable desire to make things complicated. In the culture of Washington never use one word when ten will do the trick, never hire one bureaucrat when five can do the same amount of work. It is little wonder then that the income tax code stretches to 3.4 million words, filling more than 7,500 letter size pages. A taxpayers nightmare and H&R Block’s dream. But as Tax Day approaches the whispers to simplify the bureaucratic behemoth turn into shouts. Hopefully the government will listen.

In the Wealth of Nations, Adam Smith famously noted that complexity makes taxes “more burdensome to the people than they are beneficial to the sovereign.” To this end the government has traditionally done some Spring cleaning on the code every 15 years. The government initiated major tax reform efforts in 1954, 1969, 1976, and 1986. But in the intervening 24 years we have done nothing.

The result has been a steady build up of loopholes, deductions, alternate tax schemes, and ways to game the system. The ever-multiplying deductions will mean that 47% of Americans will not pay a dime in federal income tax this year. Congratulations if you’re in that half, terribly sorry if you’re part of the remaining 53% left holding the bill.

The tax code has grown unwieldy in other ways as well. As Ezra Klein writes in the Washington Post,

We’ve begun running more of our social policy through the tax code. Rather than creating programs, we create tax credits. “It’s easier politically,” says Roberton Williams, a senior fellow at the Tax Policy Center, “because it’s easier for a congressman to say that I cut your taxes rather than that I started a new program to spend your money.”

We’re left with an outdated mess that is costing taxpayers a fortune. A 2006 report by the Tax Foundation found that taxpayers spend an estimated $265.1 billion to comply with the tax code. That means for every one dollar paid in taxes, 22 cents goes toward compliance costs. Eliminate, or reduce, the complexity of the tax code and we could cut taxes and give the government the same amount of money. The definition of a win-win.

The problem is not unique to the tax code. It is merely a reflection of the larger federal government which has seen its ranks steadily grow to just over 2 million federal workers. Since 2008, while the private sector was contracting due to the recession, the government has hired an additional 25,000 employees. Turns out Ronald Reagan was correct when he said,

“No government ever voluntarily reduces itself in size. Government programs – once launched – never disappear. Actually a government bureaucrat is the nearest thing to eternal life we’ll ever see on this Earth.”

The problem is that the government rarely cleans house. Obviously it is much harder than the tax code. Fixing the code takes cutting out some words. Fixing the bureaucracy takes cutting out some cushy government jobs. People fight harder for their position than words. Nevertheless, our current path is simply unsustainable.

A recent editorial to the Chicago Tribune lamented the growth of the Illinois bureaucracy,

“Our governance infrastructure has become overgrown and overpriced. We have 7,000 often redundant governments, far more than any other state. We populate those governments with armies of employees, and give them duties — some essential, some make-work. Many politicians of both parties enlist these workers as their allies in a cozy paradigm: If you help us win re-election, we will reward you with adequate salaries today — and fabulous retirement benefits tomorrow.”

This is not merely Illinois’ problem, this is the United States’ problem. Our bureaucracy is swelling beyond the point of private citizens to pay for it. Public sector jobs do not create a profitable product and thus must be paid for on the backs of a private citizen. Any growth in the government’s ranks, especially during a time of a contracting private sector work force, requires a greater burden to be placed on fewer people.

We speak of tax code reform but we must also speak of federal bureaucracy reform. The same waste, fraud, and redundancy can be found in both. It is costing taxpayers a fortune. We should be working to identify and eliminate the overlaps. Simplify and streamline the remaining system. And pass the savings along to the taxpayers. With careful decisions the federal government could accomplish the same workload but using up far fewer tax dollars.

It’s time for some Spring cleaning but the tax code shouldn’t be the only place we scrub.

by Brandon Greife, Political Director of the College Republican National Committee

Read more: www.collegerepublicans.org

This past week, 15,677 signatures were filed with the North Dakota Secretary of State's office for the Income Tax Cut Inititiave. Sponsored by the North Dakota chapter of Americans for Prosperity, the initiative, if certified for the November ballot, would slash North Dakota's state corporate income tax rates by 15 percent and the individual income tax rates by 50 percent starting in 2009.

Apparently, North Dakota exepcts a budget surplus of anywhere between $700 million to $1 billion next year, so supporters of the initiative are looking for both tax relief and restrained government spending during these "sunny days." Smart!

But the AARP is opposing the measure because "it would hamper state and local governments’ and school boards’ ability to respond to emergencies or shifting priorities in the future." The North Dakota Farm Bureau is also opposing the measure citing "worries that it would place the burden of spending on increased property taxes." Now maybe North Dakota should start a government "rainy day fund" that is concomitant with this tax cut, but it's amazing what poor excuses are made to not cut taxes. (But I invite any North Dakotans to explain why voting Yes on this inititiave would be a bad idea.)

This will be the second income tax related ballot initiative this year, joining the Massachusetts Income Tax Repeal. While well intentioned, the Massachusetts initiative is a bit extreme as it would completely get rid of the 5.3% tax on wages.

With so much focus on the national economy during this presidential election cycle, there has been a lot of emphasis on the candidates' tax and economic growth policies. Folks in the broader national conservative movement need to realize that not only do local and state taxes have just as much of an effect on the economy as national taxes do; state and local tax, budget, government transparency, and other localized bread and butter issues can help build our farm team, as previously discussed.

Mike Huckabee has been hosting vertical day on the HuckPAC blog where candidates for office, distinguished guest and ideas talk about how to move our country forward vertically: upward, that is. Huckabee explains the concept of Vertical politics, taking America up and not down. The Governor explains in a brief You Tube video.

Representative Sam Graves (R-MO) explains why illegal immigration poses a threat to our nation's security.

A Candidate for the Texas House of Representatives Brian Walker talks about the preciousness of human life. Indiana Congressional Candidate Luke Puckett relates a personal story to explain his pro-life position.

Senator Lamar Alexander (R-TN) urges passage of the Child Custody Protection Act which protects children and parents from those who would abscond with minor children to take them across state lines to get abortions in contravention of their home state laws.

Want to talk tax reform? The original sponsor of the Fair Tax (H.R. 25) Rep. John Linder (R-GA) shows up with a post on his tax proposal.

Senator "Big" John Cornyn (R-TX) gives the answer to America's energy problems: All of the Above.

What makes this HuckPAC event interesting is that Huckabee sought posts from regular citizens. Eight were chosen. My favorite is from Brian Donegan who has a great post with some thoughtful ideas for education reform.

Mike Huckabee didn't get to be as active as he wanted in this Vertical Day due to being delayed in leaving Africa. His Daughter Sarah has a positive note on the folks behind HuckPAC, and they definitely deserve some praise.

They've managed to bring together a very distinguished guest list of posters with some fabulous posts on the issues. It represents a job well done by the Governor and all the folks at HuckPAC.

Today the congressional caucus of the GOP unveiled their “bold new economic plan” for stealing some of the wind from the democratic sails as we move forward into preparations for the general election. These plans included agressive proposals for finally pushing forward with oil and gas exploration and extraction, and a move towards long overdue tax reform.

“To protect consumers, the House GOP plan would harness new technologies and unlock America’s energy resources in the Alaskan coastal plain, deep ocean energy zones, and elsewhere to lower gas prices, create jobs, and break America’s dependence on foreign sources of energy. To protect taxpayers from pork-barreling politicians and wasteful Washington spending, our plan would establish an immediate earmark moratorium and prohibit federal spending from growing faster than the overall economy. And to protect American families and small businesses, the Republican blueprint would stop the Democrats’ largest tax hike in history, eliminate the Alternative Minimum Tax, and give taxpayers the option of paying a flat tax and filing their taxes on a single page.”

http://republicanleader.house.gov/News/DocumentSingle.aspx?DocumentID=93622

 

After taking a moment to give our people a mental clap on the back, frustration and to some extent despair reared it’s ugly head in my heart.

Our radical new plan, is in effect a watered down version of some of the platform issues that made Mike Huckabee so attractive to his supporters. The same Huckabee vision that was shot down by party elites as one that was not well thought out, or practically impossible to accomplish.

When I thought further of the tumultuous ride we have all been on in this econonomy and society in general these last crazy months of the political silly season, I found more and more examples of Huckabee’s foresight on issues that later came to be the talk of the day.

Let’s start with the economy. During one of the early debates, Huckabee was the only GOP candidate to answer a question about the state of the economy with a ‘non party line,’ but truthful answer. For the working class American, the economy was not doing very well at all; and he was right. Within a month of that debate, the sqeeze that the working class was feeling, had crept into the middle class sensibility, and the stock market was on the fritz. Now the struggling economy is “issue number one”.

On the war on terror, Huckabee wrote a comprehensive analysis of current strategy in the middle east, and proposed that we needed to be focusing more on Pakistan and holding them more accountable for helping us in the GWOT, given the amount of resources we are pouring into their coffers. He was ridiculed for suggesting that the Bush administration had a ‘bunker mentality’ to the war, and his position on Pakistan was laughed out of town. A few weeks later, Bhutto was assasinated, democracy took a few steps backward in Pakistan, and an environment of political unrest increased the chances that Pakistan would fall into the hands of the extremists in its midst. Who’s laughing now?

Anybody who ever watched a republican debate was sure to hear the mantra from Huckabee, ‘We need to be able to feed ourselves, fuel ourselves, and defend ourselves,” if we are to stay free.

He suggested, again to ridicule, that America needed to start exploring all options, alternative and fossil, to ensure our energy independence within ten years. He even went so far as to draw paralells with the pace of the progress that was made by Kennedy in the space race. He did not talk about long term planning, he talked about doing it NOW, and agressively. Now we are paying over four dollars a gallon for gas, and everybody wants to ‘Drill now” with the ultimate effect of possibly being energy independent within the decade.

Huckabee talked about the importance of being able to feed ourselves, and implementing policies that would insure that our food supply did not have to come from external sources. This may seem to be common sense, but he was the ONLY candidate, on either side of the isle to talk openly about food sustainability on the campaign trail. Now, the world is in the middle of a food crisis. Rice and flour are being rationed at Wal-Mart and Cost-Co. Food prices are going up in part because of poor policy implemented regarding biofuel mandates, and there are riots in the streets in developed and third world countries alike. why was Huckabee the only one with the vision to adress this critical subject as part of his policy platform?

Huckabee also talked about the danger inherant in outsourcing our self defense. Again, this was not part of ANY other candidates talking points on the stump. Along comes the scandal of the outsourcing of our fuel tanker pentagon contract to a European based company. Now ‘Outsourcing our defense’ is the latest buzzword on the talk circuit.

Huckabee was howled out of town for daring to suggest that our Tax system needs a massive overhaul. He was considered naieve for adopting a platform issue in the Fair Tax that ‘could never be passed.’ Well somebody needs to do something!! Tax reform MUST be on the agenda of one party or the other, and whoever latches on to it first will have a winning platform for years to come. It looks like the GOP is taking a step in the right direction with the disclosures in today’s statement.

Huckabee was the only GOP candidate to call the stimulus package the farce that it is, pointing out that it only stimulates the economies of the very countries with whom we have a terrible trade deficit imbalance. Many lauded, and some decried his suggestion that working on restoring our infrastructure would  stimulate our local economies, while providing jobs and strengthening the foundations that ensure our transportation veins remain open for commerce. The tragedy of the bridge collapse in Minneapolis. subsequently made the subject of our rotting infrastructure take center stage for weeks on end. Now many in congress on the left and the right are advocating for infrastructure development in their home states as a means of stimulating economic growth.

When all is said and done, time and time again, the wisdom and foresight that Huckabee has demonstrated in sensing what issues need to be highlighted and adressed is nothing short of astonishing. It shouldn’t be, he has governed for ten and a half years successfully, even if his detractors prefer the spin that he is a preacher on a political holiday.

It is high time that this man get some of the respect that he deserves for being a brilliant and visionary politician. If you’re going to adopt and implement his ideas, at least have the courage to admit that he’s not the ‘hick, knuckledragging, snake oil salesman, Huckabilly’ that so many of you, liberal and conservative alike, have deemed him to be.

America may never know the gem it lost by not having the courage to believe that somone so unorthodox, and yet so intimately connected with her heart, could make it all the way to the oval office. She may yet be lucky enough to benifit from his vision, if John McCain finds the courage in his heart to do the hard thing and offer him the veep spot.

I can only hope.