Author’s Response to “Tax Principles” Blog Comments

I am pleased so many of you have expressed your opinions about the four Principles Based Taxes papers I posted. Your comments have been both of concern and of great interest to me. I may have raised the blood pressure of many of you. For this I am concerned as I wish no one harm. I am certainly not upset by your (mostly negative) comments, since anything as emotional as “taxes” is bound to evoke strong feelings. Unfortunately, I do not have time to respond to each of you. So here is an initial summary.

F.Y.I.: I have repeatedly written in my book and blog (see information at www.Save Our SystemNow.com) that many of our nation’s systems are at tipping points. To save our nation:

• Spending must be brought under control, i.e., reduced to balance spending with revenues.
• Debt — the economic rape of our young and the ultimate ruin of our nation — must be reduced to historical levels of 20% of GDP.
• Congressional rules must be changed since career politician have provided their own rules to allow, e.g., “legal bribes,” exclusion from laws they impose, etc.
• Taxes based on short-term political expediency must be replaced with taxes based on the long-term best interest of the nation.

My four papers focused on the last bullet. In fact, effective solutions to today’s problems require spending, job, and economic growth policies that include taxes based on long-term principles.

Of most interesting to me has been the amount of dialog on this VERY Important and timely topic. I believe as many of you do that our nation is in big trouble. We need to reduce deficits, if not now, very soon. Eliminating ALL discretionary spending (all federal departments and agencies including Defense) is not enough to cover our present and projected deficits. Two types of mandatory spending exist. One is spending to fulfill promises made to citizens who have already paid into or worked for the privilege, i.e., S.S., various retirement programs, Medicaid, etc. The other is spending for welfare. Elimination of ALL welfare does not begin to cover the deficit. So, the real question is how can we achieve near zero deficits.  Principles based taxation and reducing the 80.000 pages of (special interests) tax code must be part of the equation.

I have tried to decipher your comments to see if there are areas of consensus from which to develop a united conservative position or of weaknesses that require more work. I’m still working on it, but here are six of my observations.

Close to a consensus:

• Most government leaders cannot be trusted — their self interests trump constituent and long-tern national interests. We are going to have them for 2, 4 or 6 more years. How can we change the rules of the game now?
• Taxes of any type except for those things implied in the Constitution are counterproductive to creating jobs and growth. So what can be done in the short-term?
• Any tax increases on the wealthy are not acceptable (even though their wealth may be a result of special privileges).

Needs more work:

• Few solutions to today’s time urgent debt problems were offered. We need solutions now that we can market to the all citizens. Several of you are planning posts with your solutions, e.g., “TM” has provided one post and plans another. This is GREAT!
• Different tax solutions like FAIRTAX, flat taxes, no business taxes, etc. were suggested, but no clear consensus exists. Is an implementable consensus possible?
• Correcting special interest tax advantages was not discussed. What tax loopholes do we want to see plugged?

We must continue this dialog to reach a conservative consensus that fixes the immediate problems.  “Solutions” that may be a long-term fix are of little use if they do not solve time urgent problems, include a viable transition or are not marketable to the general public. Old rhetoric is not enough. How do we fix the immediate problems while transitioning to a more stable, healthy nation?