Swapping a VAT for the failing income tax is GOOD POLICY!

Check out Bruce Bartlett on the VAT here. Rather than surrender, as Bartlett does, why not win?
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Premise 1 – As our Federal government runs away from the entitlement mess they themselves created, some states are starting to see bankruptcy looming on the horizon. As the left clamors for tax increases to feed the beast, the right sits back and says “no” to everything, ignoring the fact that the left is going to get their tax increases by simple operation of time and demography. This may be good strategery in the short term, but the right is setting itself up for miserable failure, as they will forced to become the “tax collector for the welfare state.”

Premise 2 – The reliance on the income tax as a revenue generator has failed miserably. First, the right, since the 1980s, has been so successful in removing much of the working poor and middle class from the tax rolls. This makes much of the electorate immune to what is now pretty much a siren song for “tax cuts.” This has resulted in dramatically weakening one of the right’s most powerful political tools.

Second, the income tax is a horrible way to collect revenue. When times are good, only the rich now pay, and when times are bad, revenues collapse, as we can see in places that rely on the steeply progressive income tax. (CA and National Budget). Add to this fact the negative impact that progressive income taxation has on investment and incentives, and you have a very destructive tax.

Premise 3 – The right, and this includes the libertarian and conservative think tank sector as well as the Republican party, is making a substantial strategic error in ignoring the potential (political and economic benefits) of a massive tax swap. By dissing every proposal for revenue increases (and No, tax cuts aren’t going to work with a $1.4 trillion deficit and a hangover from a 25 year spending/debt/tax cut binge), the right is falling for the trap of arguing for tax cuts for a shrinking class of people while arguing against a superior policy – namely broadening the tax base and making everyone pay for the welfare state that still has substantial political support.
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If the above premises are substantially true – and I can make an extended and extensive case that they are – then our “center-right” leadership is failing us in merely saying “no” to all tax proposals, and gambling on the ability to drag this cycle of stupidity around one more time.

The solution is to make the case for a massive overhaul of the tax system, and transition the system from one that relies on income (corporate and individual and Soc. Sec.) taxation to one that relies on taxing consumption (VAT, National Sales Tax, or FairTax). This is a wonderful opportunity for a party of ideas (Republicans, before they succumbed to corrupt Hastertism) and a vibrant think tank community (before they began to resemble an echo chamber of conservo-libertarian appratchiks promoting stale doctrine) to lay the ground work for a 3rd and 4th “American Century.”

There are even more new ideas (and political and economic benefits) to go along with this new (and superior) tax policy.

Why aren’t we talking about increasingly popular ideas like constitutional spending caps? Why aren’t we lauding the replacement of the the bureaucratic entitlement state with a yearly stipend for every American (see Fair Tax rebate or Charles Murray)?

Instead of fighting against a welfare state that most Americans still support (Soc. Sec., “health care reform,” and public education), why aren’t we framing our ideas as the “individualization” of government assistance through retirement accounts, health savings accounts, and scholarships and education savings accounts?

The question is whether enterprising politicians will run on these better policies, and whether they can get enough airplay to persuade the voters that they are workable (they are). My greatest fear for our nation is that we are already too far gone down the the road of ruin. We seem to be like that obese person who is just old enough and just heavy enough to avoid the hard work of getting back in shape or forgoing that “satisfying” meal.

It just might be that we are already too morally and intellectually lazy to engage in the difficult, but worthy, task of promoting better ideas instead of regurgitating ideological talking points (and I proudly consider myself an ideologue) across a widening political gap.

It’s time to close that gap with an honest airing of ideas, a heated and potentially divisive debate, and a last-ditch attempt at resetting the fiscal course of the nation. Rinsing and repeating another cycle of the last 20-30 years isn’t going to cut it.

I frankly could care less if any or all of this is “politically difficult.” So was ending slavery or defeating Communism. The people who argue for “politically doable” deals are the same intellectually flaccid hacks who got us into this mess.

We Americans pride our selves on being “exceptional” in some way. As some one who agrees with that sentiment, I think it’s clear that we are at a fork in the road. One path (the more difficult one) leads to a renewal of purpose and promise, recreating a nation of self-governing citizens, while the other path (easier) is to succumb to being another ‘Euro-style super state’ that goes from crisis to crisis, adding greater government control of our lives along the way.

You heard it here first…

Daniel Henninger wrote a great piece over at the Wall Street Journal today.

The Liberal Dilemma
The Democratic Party’s capture by public unions and professional politicians is strangling much of liberalism’s agenda.

But this is only a piece of it. The financial meltdown of so many states and cities is forcing American liberalism to come to grips with a tough truth: The demands of public-sector unions and the legal obligations to pay their pensions are collapsing the ability to perform what’s left of the traditional liberal agenda.

Nowhere is this more evident than in California.

On July 8, Gov. Arnold Schwarzenegger, an admirer of New Jersey’s blunt new Gov. Chris Christie, held a roundtable in Sacramento on the public pension crisis. Listen to Jeff Adachi, a San Francisco Democrat and the city’s elected Public Defender:

“San Francisco is the most progressive, pro-union, you know, lefty, and I’m probably the poster boy for that in many ways. But the reality is, if we don’t do something, all of the important programs, not only public defense but we’re talking about children’s programs, after-school programs, education, senior programs, everything that we care about as progressives is going to be lost because it’s being sucked up by the cost of pensions.

Repeat after me…

“You can’t fund a child’s education if you are funding a vast education bureaucracy.”

As a matter of policy, the only thing that saves states from union greed is to constitutionally cap spending of every governmental entity. If spending isn’t limited, these greedy public employees will use every economic upturn and every dime of tax dollar to further enrich themselves.

Thoughts on the powerful Codevilla article

Much has already been said about this excellent article. Rush Limbaugh devoted an entire show to it, and bloggers across the spectrum are posting about it. It may be one of the more important articles to come along in a few years.

If you haven’t read it, I strongly suggest you stop surfing, click here, and read. If you lack the time, print it, and read it when you get home. It’s about the morally and financially bankrupt people populating our “ruling class.” When you are done, please come back and read the rest of this post. I have some questions for you.
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Paging Steve Rauschenberger…

There is now officially a “constituency for spending cuts.”

I don’t mean to pick on the good senator, but Steve Rauschenberger was the guy who told me (a few years ago at some ILL GOP event, that “there is no constituency for spending cuts.” Nonsense!

If you are ever told this by a politician, jump down their throat and say “THE HELL THERE ISN’T! There is a huge constituency for them. We aren’t as well funded, but if you make the case, we WILL come to your aid!”

In fairness, back in 2005, when many idiots thought they could retire of their 3 bedroom townhomes that were going to be worth $2.5million someday, it may have been harder to convince the voters that teachers and public employees were bankrupting their future.

Not any more. Union and Public Union positives are below 50% for the first time in decades. Drive their numbers into the dirt and cut spending on their greed to the bone. If you are still afraid of the teachers unions, you don’t deserve to be elected to office.

Either Reagan or George W. Bush could shape the fall election

I was sent an advance copy of another poll, this one done for the Third Way, a leading moderate think tank, by the Benenson Strategy Group, which has worked for past Obama campaigns. It suggests one way of shifting the odds.

This rests on reviving, one more time, the favorite Obama tactic of 2008: Run against George W. Bush, even though he is not on the ballot.

Unprompted, only 25 percent of voters in this survey said that they think that if Republicans regain a majority it will signal a return to Bush’s economic policies. By comparison, 65 percent say that a Republican Congress would promote “a new economic agenda that is different” from Bush’s.

The difference is dramatic when Bush enters the equation. Obama’s economic agenda is preferred over Bush’s by 49 percent to 34 percent. But a generic conservative approach, pitting a leader “who will start from scratch with new ideas to shrink government, cut taxes and grow the economy” beats one committed to sticking with Obama’s policies, 64 percent to 30 percent.

We are inside a short window(2-4 years) where we can literally freeze spending Government in place for generations. Let us not waste this opportunity.

Another excellent debate on Education.

Rick Hess is one of the better known authors and analysts of the education reform movement. His blog can be found over at EdWeek.

In a recent set of posts , Rick was commenting on all the “Edu-Agitprop” movies coming out. (Just FYI, “agitprop” is a combination of “Agitation Propaganda.”) You can read both this post and this one to read a healthy debate on where the education system should be headed.

Border Insanity on the Right

Hey numbnut!!

No matter how high you build it, people will want to come here to work. They can swim and fly in, and if you build it high enough, they will get to Canada and come down from the North!!!

The only “border” that matters is the workplace, and to secure that, you will need to force business to do the policing for you.

Either way, with wall or work permits, you force America to become more bureaucratic to enforce border and/or work security.

This may or may not be a bad thing, but the fact is that poor people come here to work. The only permanent way to solve our immigration “problem” is to make America less attractive.

If you realize just how dumb that is, here is your answer on the immigration issue.

Pray for this athiest

I don’t share Christopher Hitchens’ lack of belief, but I do have a great deal of respect for him. I was watching a recent “Daily Show” with Hitchens as the guest.

As Stewart and Hitchens were yucking it up about one thing or another, Stewart started to lament the lack of commitment and character in today’s population of young adults. He mentioned some aspect of the 60s and the marches and asked Hitchens, “Where are dedicated people like that these days, and what are they doing.”

Hitchens quickly and clearly stated that in today’s military, citing American and British troops in particular. You could have heard a pin drop in the pin head liberal audience. The liberal audience was silenced, and even the glib, fast, clever and aggressive Jon Stewart had nothing to say. God bless you Christopher Hitchens.

Pray for Hitch. He has cancer of the esophagus. Let’s hope he gets a reprieve. If he stays around longer based on your efforts, he has more time to reconsider his ill-thought out atheism.

Is it just me…

Or does everybody hate the idea that the new Financial Regulation bill is named after two people who belong in jail.

Frank and Dodd are the worst example of filthy politician. They should both be in prison for defending Fannie and Freddie as those organization engaged in bribery. Instead, these jerks are writing another layer of awful legislation.