Liddick: Establish a fair system of taxation now (column)
October 9, 2017
So, after repeated failures in health care and immigration, Congress moves on to tax reform.
That's right. Remember, we weren't promised "tax cuts" or even "tax RATE cuts." We were supposed to see really dramatic tax reforms, with bold initiatives on how the nation's budgets would be financed. Fat chance.
Already the caterwauling has begun. "It's so unfair!" goes the usual soprano whine. "It's tax cuts for the rich!" sounds the basso profundo line. "How are we going to pay for it?" chime in the tenor voices for "reasonable tax policy."
Oh, be quiet.
Tax policy is the most complex thing Congress can discuss – the most central to Americans' lives in one way or another, and the most disputatious. Perhaps this is that rare time when we can finally focus attention and effort on it, making it a tool which will help the nation into the future, not an anchor to drown our grandchildren.
It seems only reasonable to look to our founding document, the Constitution, for an outline of what our federal government is supposed to do, that we may begin our budget as any good budget starts: with the tasks the law requires. The list isn't a long one. The federal government is charged with foreign relations; regulating the money supply and trade both foreign and domestic; making and collecting taxes; controlling immigration and naturalization; raising, regulating and supporting military forces; and five other specific things. Congress is tasked with producing an annual budget to finance all these activities.
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Since the ratification of the 16th amendment in February 1913, the chief vehicle for financing the federal government has been the individual income tax. Designed to be "progressive," that is, to take more from those who made more, it began modestly but is now a monster that required more than 74,000 pages in 2016. It is a labyrinth, a murderous bog that is very rewarding to those who can afford a bevy of tax attorneys, but expensive to those who cannot afford that sort of help. It is created by rich legislators to help their rich friends, and the rest of us can go hang.
Here's a suggestion. Want "fair?" Good. Who doesn't? So set the level of taxation at 10 percent on every sort of income, at every level, period. No exceptions. Just because one makes $20,000 a year and another, $200,000, doesn't mean either should be exempt from paying for the privileges they enjoy as an American. Everyone pays; that way, everyone has skin in the game. And no deductions. Just because one chooses to live in a McMansion doesn't confer a right to call on another's wallet to subsidize the mortgage. Just because one lives in the New Workers' Paradise of California doesn't mean the rest of the country has to subsidize that choice of locale through a deduction for sky-high state taxes. It was a choice; suck it up and pay the price.
To those who moan that a reduction in tax rates would inevitably "explode the deficit" or some such claptrap, here's a thought: why not live within our means? If tax reform means less income — and it is pretty clear from history that it does not mean that — why not cut peripheral services until the budget balances? Radical, yes; but the times call for bold measures.
How much do we need for a robust, modern military? For an effective foreign service to represent us abroad and for a force to combat terrorism foreign and domestic? How much to control borders, regulate our currency and insure the physical safety of our citizens? How much to pay down the national debt in a set period of years? Good. Spend that, and then apportion the remainder over the other activities of government; they are Constitutionally peripheral, so they get what's left over — if any.
The above is a rational approach, but anathema to any self-serving politician: Without oodles of cash sloshing around to shower on constituents, how might he or she win re-election? So it won't happen. Our political class has discovered that they can bribe us using our own money, and for decades we've been too stupid to figure the game out. We're just happy to take the money, and the national interest be damned.
Thus, there's little hope for successful tax reform. It will be just another broken promise, another failure by politicians mesmerized by their own ends.
While we all take another turn around the drain.
Morgan Liddick writes a weekly column for the Summit Daily.
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