Defending Mitch Daniels, Heartland’s new blog, Criticizing Tea Party Mistakes

The Heartland Institute has just started their new blog, called Somewhat Reasonable. I’m posting there regularly now, and I’ll be cross posting here, there, and over at ChicagoBoyz as well.

I don’t agree with Mitch Daniels trial balloon VAT proposal. I support a complete transition away from all income taxes, and toward consumption taxes. That said, the knee-jerk reaction to his attempt to discuss solutions to our national financial problems is wrong. This is the best Governor in the country. Having him as President would be a blessing.

For more debate, go here.

For a better proposal on swapping ALL income taxes, go here.

For a critique of Tea Party Candidate errors, go here.
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3 Cheers for Mitch Daniels, Leader

Let’s start with this. If Mitch Daniels is running for President, he’s made the strategic decision to run on bold policy, regardless of the risk. If he is not running for president, he has at least decided that he wants to have a positive impact on the policy debate, something the current GOP sorely needs.

If you haven’t heard, Mitch Daniels has once again voiced opinions that depart from the received canon of the GOP punditocracy and policy shops. He floated the trial balloon of using a VAT to offset other taxes and move the nation away from the financial conflagration brought on by our failed tax code. This is a good thing. Here is what we read in Politico and Newsweek.

Mitch Daniels open to VAT, oil tax hike

Daniels recited from Kahn’s book: “It would be most useful to redesign the tax system to discourage consumption and encourage savings and investment. One obvious possibility is a value added tax and flat income tax, with the only exception being a lower standard deduction.”

“That might suit our current situation pretty well,” said Daniels, who served as George W. Bush’s Office of Management and Budget director and was a senior adviser in Ronald Reagan’s White House. “It also might fit Bill Simon’s line in the late ‘70s that the nation should have a tax system that looks like someone designed it on purpose.”

The so-called VAT, common in European economies which have stagnated, is a toxic acronym to fiscally conservative activists like Grover Norquist and Dick Armey. It slaps a tax on the estimated market value for products at every stage of production. Progressives, meanwhile, loathe flat income taxes because they’re regressive and punish the poor. But some on the right have found the VAT attractive as an alternative to progressive income taxes and levies on capital gains.

The Horror!! He said the “T” word!!! Run awwwaaaaaayy! But wait, there’s more!

Indiana Gov. Mitch Daniels Earns Conservative Ire for Tax Remarks

Mitch Daniels has been much talked-about in the media, and for good reason: he’s one of the more interesting Republican contenders for 2012. But the normally mild-mannered Indiana governor has occasionally made headlines for his controversial statements, and he’s back at it.

The reaction from some quarters was fierce. In what almost (but not quite) seems like a validation of Godwin’s law, Grover Norquist, the noted antitax activist who leads Americans for Tax Reform, compared Daniels to Rich Iott, the Ohio congressional candidate who wore a Nazi uniform as part of World War II reenactments.

Stay classy, Grover.

Let me say that I’m not particularly enamored of the form of this trial balloon, either as a matter of policy or the way it was floated. I’m on record for supporting a complete phase out of all forms of income taxation, both individual, payroll, corporate, and capital gain.

I floated my trial balloon here. I’ve backed off the gas taxes since then, but the rest is utterly reasonable and defensible, particularly in comparison with our failed tax code. Daniels was simply wrong to float the flat tax (or any income tax) along with the VAT. Get rid of all income taxes, period.

I’m guessing there is a reason that politicians, even those as successful as Daniels, are afraid of calling for an end to all income taxation. That reason has to do with the politics of taxing the lower income citizen at a very high rate, while the rich get the proverbial “free ride.”

BTW, The political solution to that problem is to phase in giving every American over 21 a stipend that covers health care, retirement, and HSAs. This is a feature to the flawed “Fair Tax” plan, and should be a part of any tax swap plan. Stop arguing about the welfare state, and simply individualize it. But I digress…

If I’m so critical of Daniel’s poor plan, why am I so happy he floated the idea? Because it shows leadership. Because it shows an understanding of the size of the problem and the political maneuvering necessary to gain bipartisan support.

It’s time to move America in a better fiscal and cultural direction, and the nattering nabobs of negative attacks (Norquist, Carville, Begala, and Rove) aren’t cutting it anymore.

We have had 3 decades of one ideology staying in power just long enough to enact the worst policies, while the next ideology encrusts that bad policy with layers of even worse policy. Break the stalemate, risk running on robust policy, and do the hard work of bargaining for a better deal. If you agree that the time is ripe for such a strategy, you couldn’t pick a better person than Daniels to be in your corner.

He is criticized for raising some taxes early in his administration, but his critics probably don’t want you to know that this came with;

  • Dramatic spending cuts
  • An Executive Order repealing collective bargaining rights for public employees
  • More spending cuts
  • HSAs and consumer driven plans for public employees
  • Substantial property tax relief.
  • Grover Norquist’s administration started with….

    Oh wait! Grover’s never been elected to anything. He’s never put his name on the line or submitted himself to a vote (or an important policy decision). Instead, he’s given us a generation of Republicans who have signed “No Tax Pledges,” many of whom spent (and thus taxed) us into oblivion.

    The current tax system is beyond reform and/or repair. Too few pay into it to flatten it out, an broadening means tax increases on the middle class. It is incapable of raising the money needed for the promises that have been made, even after the coming big haircut. Attempting to re-run the 80s, 1994, or the weaker 2000s is a fool’s errand. We can’t get there from here under any realistic growth scenario.

    The danger we face in following the “nattering nabobs” is the near certainty that we get both VAT taxes AND the income tax regime in any event.

    We are approaching a rare moment in time where Americans are interested in policy ideas, the Constitution, and a return to self governance. We should use that opportunity to reset the nation’s course, not to score talking points until the next wave of anger topples the next majority.

    Is all this an endorsement for Daniels for President? Probably. I admire him for leading. We could use more of that in the next few years.

    ObamaRomney – Healthcare Reform Destined to Fail

    The Failure of RomneyCare = The Failure of ObamaCare

    Former Massachusetts governor and likely 2012 presidential aspirant Mitt Romney has been on the wrong side of the defining political battle of our time.

    Mr. Romney claimed earlier this month on “Fox News Sunday” that the Massachusetts health reform plan he signed into law in 2006 is “the ultimate conservative plan.” But there are many similarities between it and the ObamaCare loathed by conservative voters.

    Both have an individual mandate requiring most residents to have health insurance or pay a penalty. Most businesses are required to participate or pay a fine. Both rely on government-designed purchasing exchanges that also provide a platform to control private health insurance. Many of the uninsured are covered through Medicaid expansion and others receive subsidies for highly-prescriptive policies. And the apparatus requires a plethora of new government boards and agencies.

    While it’s true that the liberal Massachusetts legislature did turn Mr. Romney’s plan to the left, his claims that his plan is “entirely different” will not stand up to the intense scrutiny of a presidential campaign, especially a primary challenge. Mr. Romney needs to be more honest about his Massachusetts experiment and its failings.

    Mr. Romney insisted in a recent interview on “Fox News Sunday” that “our plan is working well,” and he defended his state’s right to create its own plan. He also said in his book “No Apology” that because of the plan everyone in Massachusetts now has access to “portable, affordable health insurance.” Not exactly.

    Given that Romney is nearly the last person I’d like to see nominated, I am happy that he’s throwing political capital out the window by sticking to his story.

    Of course, the best candidate, should he decide to run, is this guy.

    Mitch Daniels does the right thing AGAIN!

    Is there anything ‘My Man Mitch’ doesn’t do right? Isn’t it uncanny that he does them first?

    This article in the WSJ highlight another effort from the “Green Police” to enact carbon caps through the back door.

    Carbon Caps Through the Backdoor

    Copenhagen was a flop. Congress’s cap-and-trade bill is stalled. The EPA has delayed its climate rules. If you think this means American business is escaping the threat of carbon restraints, think again.

    Most of the climate debate focuses on Washington. This misses a more clever and committed force—environmental groups that impose their agenda on companies via pressure, legal threat and sympathetic regulators. A textbook example has been quietly unfolding in the insurance sector. The question is whether governors will stand by to let green activists effectively regulate their businesses.

    Since the beginning of the climate debate, environmental lobbies such as Ceres (a coalition of activists and investors that pressures companies to go green) have expressed particular interest in insurers. Rather than nitpick every company to adopt climate-change policies, these organizations realized it would be more efficient to target a gatekeeper. Everybody needs insurance. If insurers could be bludgeoned into requiring policyholders adopt carbon-mitigation practices as a requirement for insurance, the activists would have imposed their will widely and quickly.

    Yet under the direction of members such as Wisconsin Insurance Commissioner Sean Dilweg and Pennsylvania Commissioner Joel Ario—both climate crusaders—the task force turned itself into a national climate regulator. In particular, in unveiled its “Climate Risk Disclosure Survey,” a document insurers must complete and make public. This survey was not put forward for legislative approval, but rather presented as something state commissioners must issue unilaterally.

    When I called the industry association CEO Chuck Chamness to ask him about this fight, he expressed the general frustration: “We are a good, green industry. What we don’t believe is that our industry should be made into an environmental traffic cop. If there is a need to change business behavior, go directly to the industry in question and regulate it. Don’t use us as leverage.”

    Some states have already caught on to this end run around governors and legislatures. Indiana Gov. Mitch Daniels was the first to object, directing his insurance department to refrain from administering the survey. Officials in Mississippi and Missouri have followed suit; Rhode Island says the survey won’t be mandatory.

    All Mitch Daniels, All the time.

    Mitch Daniels for President

    Pawlenty for VP or MN Senate
    Palin for Alaska Senate or FOX’s new Conservative Oprah.
    Huckabee for Faith Based Initiative CEO
    Romney for Commerce Secretary
    Gary Johnson for Head of the FDA

    Just get together in a room and bang this all out. By mid 2013, they could wage a full front war on the Obama Administration with out a Primary fight.

    Hoosiers and Health Savings Accounts
    An Indiana experiment that is reducing costs for the state and its employees.

    As Washington prepares to revisit the subject of health-care reform, perhaps some fresh experience from Middle America would be of value.

    When I was elected governor of Indiana five years ago, I asked that a consumer-directed health insurance option, or Health Savings Account (HSA), be added to the conventional plans then available to state employees. I thought this additional choice might work well for at least a few of my co-workers, and in the first year some 4% of us signed up for it.

    In Indiana’s HSA, the state deposits $2,750 per year into an account controlled by the employee, out of which he pays all his health bills. Indiana covers the premium for the plan. The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.

    Unused funds in the account—to date some $30 million or about $2,000 per employee and growing fast—are the worker’s permanent property. For the very small number of employees (about 6% last year) who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

    The HSA option has proven highly popular. This year, over 70% of our 30,000 Indiana state workers chose it, by far the highest in public-sector America. Due to the rejection of these plans by government unions, the average use of HSAs in the public sector across the country is just 2%.

    Public Employee Unions don’t care about public employees. They care about power and greed. They are not needed, so just get rid of them.

    Start working your friends and relatives for Mitch Daniels.

    Mitch Daniels for President

    Get on board people. He’s the best of the lot.

    A Republican Surprise

    Set a group of plugged-in conservatives to talking presidential politics, and you’ll get the same complaints about the 2012 field.

    Mitt Romney? He couldn’t make the voters like him last time … Sarah Palin? She’d lose 47 states … Mike Huckabee? Better as a talk-show host … Tim Pawlenty, Jim DeMint, Bobby Jindal, David Petraeus? Too blah, too extreme, too green, and stop dreaming …

    But murmur the name Mitch Daniels, and everyone perks up a bit. Would he win? Maybe not. But he’d be the best president of any of them …

    Do your research. Find out why it’s Mitch Daniels is the best candidate for President. If he runs, jump on board. If he doesn’t, pick Pawlenty, an excellent 2nd choice.

    Mitch Daniels for President

    I thought it was great news yesterday, when I read that Daniels may actually be considering a run for the Presidency. Earlier (at and event here in Chicago, actually) he stated that he wasn’t interested.

    It’s good to hear he is reconsidering. Here is why.

    Mitch Daniels’ Rules for Republicans

    Indiana Governor Mitch Daniels has a few ideas – pretty good ones, actually – about how a Republican candidate should run a campaign for the presidency. But guess what? He says he doesn’t intend to run. “I don’t plan to do it, don’t expect to do it, and I really don’t want to do it.” Daniels says.

    Daniels, however, has dropped his Shermanesque stance of refusing to consider a presidential bid. Instead, he told the Washington Post recently that he’s been persuaded to leave open the option of running for the Republican presidential nomination in 2012.

    Daniels has two basic ideas for the next Republican presidential candidate. One, the candidate should have a plan for solving the spending, deficit and debt crisis that has “intellectual credibility” and “holds water.” This mean the candidate would “campaign to govern, not merely to win” on what Daniels calls a “survival” issue for the country.

    The second idea: The candidate should “speak to Americans in a tone a voice that is unifying and friendly and therefore gives you a chance of unifying around some action.” In his campaigns for governor, Daniels never ran a single negative TV commercial attacking an opponent.

    The article is short, and does not provide much information on policy, but Daniels is a policy heavyweight. He’s best shot, given the fewest negatives and the most positives. My second, and quite close, 2nd choice is Pawlenty.

    The remaining wannabees are unelectable for one reason or another, and we ought not waste our time on them.