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Opinion | Morgan Liddick: Never let a crisis go to waste

Morgan Liddick
On Your Right

I’ll go Johnathan Swift one better. In honor of our Democrat friend’s itch never to let a crisis go to waste during the time of COVID, let’s use the dislocations wrought in our socioeconomic and political structures to build systems that function better than those we now have. Two modest proposals follow:

First, even if our economy quickly staggers to its feet and begins to flourish in the wake of coronapanic, our country faces crushing debt. At more than $25 trillion, our government now owes more than the total gross domestic product, roughly $21.2 trillion in 2019. We have not been in this financial situation since 1946.

Those who founded this country understood the peril of a burdensome national debt. Hamilton may have observed that “a national debt — if not excessive — will be a national blessing,” but he was referring to the unifying power of bond purchases. Much more pointed was his remark, “Allow a government to decline paying its debts and you overthrow all public morality — you unhinge all the principles that preserve the limits of free constitutions.” Even Jefferson agreed with that, and he didn’t agree with Hamilton on much.

To kill many birds with one stone, let’s do away with our graduated federal income tax and institute a flat tax calculated to completely fund the operation of government, adding a surtax to pay off the national debt in, say, 15 years. The latter would require raising the federal government’s tax revenue by about 60% from its current $3.5 trillion to $5.8 trillion annually. The average annual individual income tax bill would rise from 14.6% of income to just over 24%, which would have amounted to about $13,778 rather than $8,367 in 2018. 

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This rise might be held in check by other features of the flat tax, most notably eliminating all deductions from the tax bill and making it universal. We would all pay a set percentage of whatever we made. Period.

This would doubtless hurt, but since we have all been complicit in enjoying boons, the cost of which we have thoughtlessly fobbed off on our children and theirs, it’s time to stop being irresponsible. And it’s long past time that everyone enjoying America’s benefits took a hand in paying for them. We all have skin in this game — whether we acknowledge it or not — even the 44% of Americans who pay no federal income tax whatsoever.

Then there’s the vexing question posed by the lawyers circling businesses that are reopening, sniffing for the blood in the water that a first new case of COVID-19 would be. We’ll see a feeding frenzy then that would make a great white turn tail and run. The Trump administration has been discussing legal prohibitions on this sort of white-collar robbery, but that is probably unwise: laws made for specific circumstances have a way of jumping their fences, and making any sort of business tort-proof quickly bleeds into the disreputable habit of picking winners. Far better to do something that should have been done long ago.

Congress should institute tort reforms which would bring the United States closer to the practice in almost all of the developed world, in which the losing side of a lawsuit pays court costs and the “reasonable and customary” attorneys’ fees of the winning side. Called the “English system,” such reforms would require fee caps to avoid prohibitive awards springing from multiple appeals of the same case and would undoubtedly result in development of new types of insurance products specifically designed against the prospects of being bankrupted by a legal loss. Such coverage is available today in all countries where “loser pays” is in force.

To quell the inevitable squalling from trial lawyers and their paladins in Congress, the English rule could be modified to fit an American system by appending the term “frivolous” to tort cases to which it applies. The description is specific and already in use in several states as discussed in an American Legislative Exchange Council symposium in 2012. Sadly, these reforms and their legal barriers and penalties are required by America’s oversupply of people who refuse to control their urge to use the justice system as a casino.

Thus two salutary changes we could achieve if Republican leadership acted as our Democrat friends do, never letting a crisis go to waste. Time will tell if they are attentive enough, vigorous enough and united enough to do so.

Morgan Liddick’s column “On Your Right” publishes Tuesdays in the Summit Daily News. Liddick spent 27 years working for the U.S. Foreign Service, primarily living abroad. He also spent 12 years teaching U.S. history and Western civilization at community colleges in Colorado and Texas. He lived in Summit County as recently as 2015. Contact him at mcliddick@hotmail.com.


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