Posted by Warren Peterson on April 26, 2011
It is popular in conservative circles to say, “We don’t have a revenue problem in Washington, D.C. We have a spending problem.” But the truth is we have a taxing problem too and it needs to be solved along with controlling spending. Rahm Emanuel‘s famous quote, “You never let a serious crisis go to waste.” certainly applies to the debt crisis now facing the nation.
To stop the rise in and actually begin to lower the debt will require significant reductions in spending across the board. We may well come to the conclusion that after decades of prolific spending, especially the last two plus years of multi-trillion dollar deficits, spending cuts alone will not be enough. Before we leap into any tax increases, a discussion beyond the “tax the rich” rhetoric needs to take place. That discussion should result not in more tweaks to the existing 71,000-page nightmare called the income tax code. It should result in fundamental reform.
A new tax system needs to be relatively simple, transparent, fair and include everyone in the base. Two proposals have been offered:
1. The Fair Tax – Click HERE for a detailed explanation. In essence, it is a national sales tax collected at the retail level. It would replace all current taxes (Social Security, Medicare, individual and corporate income taxes, etc.). A mechanism for refunding monthly an estimated amount of the tax makes it somewhat progressive. A rate of 23% or more is a shocker but the theory is prices for goods and services will fall since there are no hidden taxes being passed through to the consumer and the cost of collection and enforcement would be dramatically lower. It is an intriguing idea but so radical that selling it to the public over the loud objections of special interests across the spectrum could be a mountain too hard to climb. With the Fair Tax, citizens would know every day what the Federal government was costing them.
2. The Flat Tax – Click HERE for a detailed explanation. This system would tax all income above a set amount; say $36,000 for a family of four, at a fixed rate (17%), no deductions or credits. Various options incorporating changes such as graduated rate have been suggested. CPAs and tax lawyers would hate it but most people would understand it as fair and transparent.
The two most difficult problems with either of these proposed tax systems would be how to implement and Congress. Picking winners and losers in the tax code is power and politicians would not give it up easily nor would those benefiting currently from some provision buried in those 71,000 pages.
Everyone agrees we need to reform our tax system. The debt crisis offers an opportunity for the people to demand it. Wasn’t the original Tea Party about taxes?
Cross posted on: SoundPolitics
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Posted by Warren Peterson on April 22, 2011
In her April 14, 2011 newsletter, Senator Patty Murray (D-WA) said:
“Last week as efforts to reach a budget agreement came down to the wire, I worked to successfully defeat an ideologically driven proposal that would have seriously restricted health care support for women across Washington state. On the floor of the U.S. Senate, in a speech to a rally on the national mall, and in discussions with colleagues, I fought back against a provision that would have eliminated funding for cervical and breast cancer screenings, prenatal care and family planning services for women. I also joined a letter with 41 of my colleagues that urged the Senate leadership to oppose these extreme proposals.”
By “family planning services” she means that 97% of pregnant woman going to Planned Parenthood abort their babies. She uses the word “extreme” because Senator Schumer told Democrats to call any budget proposals from the GOP “extreme”. He’s the same Schumer who derides GOP court nominees as “out of the mainstream” meaning they are not liberals. Instead of addressing the question of why should private groups like Planned Parenthood receive Federal deficit dollars, the Democrat playbook calls for demagoguery in order to discredit the opposition before the 2012 elections. Republicans have been known to make similar plays as they look forward to an upcoming election.
The Murray/Schumer types provide fodder for conservative bloggers while Republicans like Sarah Palin and Senator Kyl (his misstatement on Planned Parenthood) serve the liberal pundits. It’s all great sport but clouds the debate on the critical issue of unsustainable annual deficits and the alarming growth in the national debt. It is lost in the political skirmishes over hot button social issues barely under the surface of budget provisions. The debt is so serious it is time for elected officials to risk losing reelection, to summon political courage not seen since…since…, well, never before.
If political courage is unlikely, how about some political cover? Try an up or down voice vote, no amendments, no debate on a omibus spending reduction bill containing cuts submitted from the conservative and liberal members of the House and Senate. Or would a Balanced Budget Constitutional amendment work? Something significant has to be done and soon. The do little or nothing alternatives are just too scary.
Cross Posted on: Sound Politics
Posted in National Politics | 4 Comments »
Posted by Warren Peterson on April 16, 2011
Thanks to Bob K for this one.
Below is a link to a You Tube video showing what happens to some bad guys In Iraq. The pops you hear are outbound rounds from some Marines pinned down behind their vehicle. The pings are from inbound rounds fired by some bad guys hiding behind a truck. One of the Marines shouts “Just fired a rifle.” That means an aircraft has fired a missile proving it’s not healthy to shoot at Marines.
Click here: You Tube
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Posted by Warren Peterson on April 2, 2011
Come November 6, 2012, if you live in Ohio or New York, there will be two fewer congressional seats on the ballot. Eight other states mostly in the North will have one less. Why? Because every ten years the 435 member House of Representatives is reapportioned in accordance with the Census and the 2010 Census showed these states losing population, and therefore Members of Congress, to other states, mostly in the South. One may think the population loss is due to the economy but this trend is not new. So what caused the population shift? Economist and syndicated columnist Thomas Sowell offers an explanation in his column titled, Voting with Their Feet. If he’s right and Republicans play it smart for once, the future looks bright for the GOP.
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