…you are guaranteeing steep income tax increases.
So grow up.
Nothing cranks me up more than the Free Market Movement’s avoiding the necessary debate on swapping good taxes for bad. I hate taxes as much as the next guy, but until someone in the free market movement starts fighting spending and borrowing, taxes are here to stay. Not only that, but they are also guaranteed to climb.
Here is some tough medicine for the Free Marketers.
Are you starting to get it? Now that I have your attention (and you are undoubtedly preparing to flame me in some comment), let me clarify the issue with some general, but unassailable, facts.
With all that in mind, why is the conservative/libertarian movement, along with the smarter people in the Republican Party, failing to make the case for tax swaps that entail the conversion from Income, Payroll, and Corporate Income tax to a consumption-based system of taxation.
The only negative political factor that can be associated with such a policy is the impact on the poor. This is easily addressed by the creation of a yearly stipend for every US citizen. The stipend, in turn, can be used to individualize the entitlement programs that are destroying our nation’s finances.
We could, for example, transition away from income taxes all together, while providing citizens with the means to pay for market-based health and retirement systems. This allow for the eventual devolution of Medicare and Medicaid, along with Social Security.
Placed in this context, we should be considering gas, BTU, consumption, and sin taxes as complete replacements for Income and Social Security taxes. If we get our swap, we should even consider a VAT/National sales tax. This is good policy.
And again, whether you are Tea Party Activist or a Free Market Think Tank employee, I have some advice for you. Sitting in a corner, with your hands over your ears, shouting, “I’m not listening to anything you say about taxes” isn’t an economic policy. It’s only a guarantee that you’ll get all those tax increases, and then some.
We are in a position to make massive free market gains in the next few election cycles, providing we deal with fiscal reality in an intellectually honest manner. We can force the spending cuts that will yield tax cuts in the future. We can swap good taxes for bad ones. Lastly, if we do it right, we can individualize the welfare state through scholarships, stipends, and individual health and retirement accounts.