One Progressive’s View of the Tax Code
I want to clarify a common stereotyped attribute given to the progressive, that their goal is the redistribution of wealth. I would say that this is not true. The principle for me is that Government does cost money and everyone needs to pay his or her fair share. Before each ideological pole attempts to skewer the sacred cows of the other, I believe that there is enough waste in the administration of Government that we all can agree upon that needs to weeded through first. Because the profit motive is not the driver in the public sector, structural inefficiencies remain as an intrinsic part. How many agencies are needlessly overlapping or duplicated? Being in Government procurement for so many years, I know that our agencies are technologically behind and have made large computer software buys of products that were already obsolete by the time we acquire the product. This would not happen at IBM. There is waste in the social programs, DOD, etc. and, we all need to agree that we first must identify and remove it, and it should rankle neither the left nor the right. In my opinion, until this is done, everything else is mere muckraking.
There is nothing in our Constitution that speaks on the equality of outcomes. People have differing abilities, gifts of determination and drive, thus the outcomes; levels of success and achievement are going to vary as well. If I failed to acknowledge this truth, than I am the socialist so many say that politically left leaning people are. But a fundamental premise of this society and a reason why is has remained successful is the idea that any one can with effort and determination rise above his or her current station in life. That has put the damper on revolutionary fervor that has affected other parts of the world. Your station in life is not structurally predetermined for you at birth. The need for at least the illusion of this has appeared in law under our anti-trust legislation that go back to the early 20th century. We hold the idea of competition on a level playing field as a foundation of our economic system, and I believe that is why it has worked so well. All this while, Europe has never had any problem with the concepts of cartels. If people believe that the unethical practices in the economy by those that have an interest in consolidating power in their hands is impossible to overcome, then that premise I had mentioned about America disappears with it. The greed of many will be the equivalent of killing the golden goose.
My fellow hubbers and political analysts, Man with no Pants, Old Poolman and the American Way gave me food for thought the other day. Perhaps, all of Congress is playing good cop/bad cop with the public. I was furious after watching the latest installment of the “60 Minutes” program. John Boehner and Nancy Pelosi were asked in an interview how they could accept insider trade information not available to the general public as well as access to IPO (Initial Public Offering) stock share offerings that the guy in the street cannot attain at the advantageous prices that these members of Congress can. Have we created an aristocracy here? These are the kinds of advantages that undermine the idea of ‘level playing field’ and rankles me as a progressive indicating that the advantages people claim to have achieved through hard work is too often obtained unethically and at the expense of the rest of us. Wall Street is a gambling casino that gives one the illusion that you can really be successful, but in reality do you know any gambling casino in business to lose money? The house has the odds stacked in their favor. That is why I often question the idea behind the 401K. What are the chances that you can save and invest over a lifetime of work and have this fund be reasonably intact at the end of 30 to 40 years in this volatile economy? The man of the street can do everything right, and still get whacked on the head for his trouble.
I think that the President Obama is in error by framing the tax increase debate in terms of “the wealthy can afford it”. The issue is not about whether they can afford it or not, but are they paying their fair share? I would rather not go into a populist, share the wealth kind of approach. I am not an economist but I am just putting forth some basic concepts that I would like to see as part of a revised tax code.
I have to abandon the principal that everyone has to pay something, it is not workable. I cannot get blood from a stone. For a person that earns the medium income, let’s say $50,000.00 a year, with 3 dependents I propose:
$50,000- 22,350 (poverty threshold for a family of 4)= Taxable income $27,650 x 10%=$2,765
Everyone can take the deduction, acknowledging the number of dependents is a fair and important part of any tax code. Also the idea that capital gains income is to be exempt is a non-starter. Allowing for the exemption provided above, all income must be subject to taxation at this minimal rate. Those with incomes below the minimum poverty threshold may well not have an income tax. The wealthy should be pleased as their base rate is much lower.
Corporations have made it clear and the recent Supreme Court Decision confirms it in the fact that the classic definition of a corporation as an individual is sustained by their freedom to be treated as an individual regarding its campaign finance contributions. So what is good for the goose is good for the gander. Conservatives say that these companies are being taxed to the point where they are not competitive in global markets. I propose a 15% tax on corporate income, with the only exemption being economic activity on their part that keep American jobs in the United States and/or their conduct of business and economic activity has a direct benefit to the American taxpayer. This is not politicizing the tax code, but recognizing that we all have an interest in insuring that the American people benefit directly in return for tax breaks.
I propose a 15% consumption tax on purchase of goods and services. This tax, in order not to be too regressive, is not applicable for the vast majority of food items and clothing, certain levels of utility usage, etc.
I don’t know, it has to be at least as good as Perry’s and Cain’s programs. I am sure that many of you can think of other justifiable exemptions and circumstances where they may be applied. But, again the danger is getting into the thicket that is the current system. Your thoughts would be appreciated.
I have maintained a spirited debate on the issues of the day with Old Poolman, MWNP (The man with no pants) and American View, I have found them all to be people of good character. We are working on the premise that it is possible for reasonable people with differing ideological and political points of view to actually agree on a common course to address the issues of our time. They are working together on the http://housefireproject.com/. Have a look and judge for yourself.