Thursday, August 13, 2009

On taxation: fixing the heart of the problem

There's been a lot of talk recently about big changes in the US. We are running the largest deficit in history, increasing at a record rate which is around 4x higher than the previous administration (which was ridiculed for their enormous deficit spending by the people in the current administration). Our economy is in tatters, still losing jobs as debt-fueled personal consumption is not recovering, no new bubble is appearing, and our production base has been all but destroyed. Our public education system is horribly inefficient and ineffectual, our more liberal states are struggling to correct years of over-spending, and our de-facto global economic leadership is being questioned.

In response to this, our government under President Obama has taken bold measures. We have increased deficit spending, giving out Trillions of dollars to the banks which helped caused the reckless gambling economic meltdown. We have virtually nationalized our automobile industry, helping to ensure they will never again be competitive, or even solvent without government subsidization. We have stepped up efforts to tax industries and business owners, to accelerate the destruction of harmful and polluting employment. The administration is pushing to nationalize our health care industry, to ensure that the cost rises to match the level of frustration people have getting effective insured medical care. Next year the administration will push plans to impose enormous crippling new energy taxes, to insure our industry will never be able to recover. The Obamanation hopes publicly, without logical basis, that one or more of these bold initiatives will magically restart our economy, while privately delighting in the opportunity this crisis have given them to push the Socialist agenda more than any other period in nearly the last century.

At this point, you might be asking yourself: why is the government doing everything they can to make the problems worse? Well, the answer is two-fold: first, the government generally makes problems worse when they act, regardless of their nominal intentions, and second, in this case the Obamanation is not trying to fix the problems, they are trying to use the problems as an excuse to instigate a Socialist government, and in that respect they are succeeding. More depressingly, even if the citizens manage to defeat this brazen attempt at a government takeover, there's nothing to prevent the next attempt (promised already in the form of Tax and Cap), or subsequent attempts. What we, the people, really need is something which goes to the heart of the problem, and seeks to cripple the government's ability to do damage like this not just now, but in the future as well.

One of the big, underlying problems which is a common thread in the recent actions of the Obamanation is the relentless expansion of government, and aggressive pursuit of social manipulation through monetary, and primarily tax, policy. Now, most people (from all political ideologies) don't have a problem with the government spending money to "help" the people in general; the primary source of disagreement stems from how much money to spend, and on what things. When the income tax was instantiated in the US, the purpose was to fund a war effort, and the enormous burden placed upon the taxpayers was a staggering 2% of income. With the nature of politicians, this naturally grew from there, reaching nominal rates above 90% in some cases. This carte blanche to expand and manipulate the tax base gives license to the government to pursue spending and wealth redistribution programs of various forms, with no obvious check or limit, and it's getting worse. This is the problem which I would propose to solve, as a stepping stone to addressing many of the other problems.

Now, many people would argue (myself included) that the only legitimate purpose for taxation is to fund the government's operations. This obviously conflicts with the current usage of taxation, which is as much about dictating and manipulating social policy as funding operations. Moreover, the operation themselves are often social policy based, rather than what could be considered legitimate fundamental government operations. My proposal does not address this problem, however it would, I think, provide some incentive for people to fix this problem, and a platform for the people to exert leverage against problems like this in the future.

I would propose a Constitutional amendment to limit the total amount of taxation each individual in the US is subject to, per year, based on income. To wit:


The government shall not, though all direct taxation, collect more than 25% of any person's income per tax period.

Furthermore, the government shall not collect more than 20% of any person's income during a tax period without declaring a state of fiscal emergency at the beginning of the tax period, and stating the maximum percentage of income which it will collect during that tax period (not to exceed 25%).

What this would do, and not do:

Obviously, this would impose an upper bound on income collected by the government through direct taxation (income, property, other). It does not limit indirect taxation (sales, tariffs, etc.), so the tax rates could, and probably would, still be ridiculous. It also, notably, does not dictate that the tax rates need be uniform, or the collection not have favored activities (eg: deductions), or that the money need be used only to fund essential government operations; all of these are noble goals, but all are beyond the scope of what I think is essential to have in our Constitution, at least at this point.

What the first part does is impose a hard limit on the government's ability to drain money from its people, which would necessarily impose a limit on the expansion of government, and wealth-redistribution programs. This ignores devaluation of the currency, of course, which is an ongoing problem I hope the government will eventually solve, but is beyond the scope of this effort. Is would be, however, a good first step, and would be sure to cause some consternation in the halls of special-interest payouts and corrupt favor mongering.

The second part forces the government to acknowledge, publicly, that they are doing a bad job, fiscally-speaking. While I don't think that will dissuade anyone or cause any immediate change, it does set the stage for further initiatives, which could be tied to the state declaration. For example, you could limit the scope of additional spending while in that state, or not pay the members of Congress, or limit terms to one while the government is in that state; all of these would just serve to re-enforce the concept that it's "bad". Note that I would prefer a number more like 10% as the "soft-limit", but I realize that with the current state of our enormous government services set, that's unrealistic. This, however, would be a good start.

BTW, I need to acknowledge that this post was somewhat inspired by Penn & Teller's BS episode about taxes, which is highly recommended. There might be a followup later about the other excellent point they raised: the complexity of laws, tax code included, serves the interest of the police state, and true freedom means eliminating all the ways you ambiguously "might" be guilty of something from the laws; but that's for another time.

Anyway, thanks for reading; feel free to add your thoughts. I have no idea how anyone could/would go about starting a process to get a change like this done, and I certainly don't have enough time/effort to do so, but in the spirit of making a more perfect union, this is something I would do.

Tuesday, August 4, 2009

On the Obama/Joker poster...

If you're reading blogs, I'm sure you've seen it; if not, here's a good reference article.

Couple of quick thoughts:

- All the outraged liberals should be ridiculed for being hypocritical scum; there was a nearly identical image of Bush published in a magazine during his tenure, and Bush/Cheney have been called much worse explicitly.

- To say that the "socialist" label is hurtful and dangerous is like saying an expose of illegal activities is hurtful and dangerous to the perpetrators; it may be so, but it's accurate, and free speech is a right we still (mostly) enjoy in the US, at least for now. Whether or not socialism is good for America is debatable, but anyone who doesn't at least acknowledge that Obama's policies are socialist is too stupid to vote, in my opinion.

- There are many potentially applicable quotes from the movie which could be applied to Obama, but I particularly like this one: "And in their desperation they turned to a man they didn't fully understand." It kinda sums up the whole Obama administration pretty well so far, and we've got several years to go.

Monday, August 3, 2009

Another wacky idea: bonds for civil suits

From the "my wacky ideas" file:

I think there should be a couple more qualifications in civil suits rather than simply a judgment against the accused or lack thereof. Specifically, I think the court/jury should also have the right to say (in addition to the regular judgments) that the lawsuit had no merit, and that the legal representative for the plaintiff should have been aware of this before bringing the action. This, in and of itself, would not change the system at all, but that brings me to my associated idea...

I think to file a civil lawsuit, against anyone, you should first be required to post a bond in the amount of reasonable court and defense counsel costs. This bond would be forfeit if you drop the action (at least in the amount of incurred court/counsel costs at that time), or if your case is dismissed for lack of merit. If you win, or the case is determined to have merit but is decided against you, you get the entire bond amount back.

The actual bond itself could be handled somewhat like bail is currently, with independent companies available to front the money in exchange for a percentage of the settlement if you prevail (similar to the lawyer's percentage for taking the case with no money up-front). Law firms could also pay the bonds, of course, if they are taking cases on behalf of clients.

The obvious benefit of this is that there's a certain amount of financial risk associated with filing a lawsuit, highly discouraging any lawsuits without obvious legal merit. Of course, wealthy individuals and businesses could still file frivolous lawsuits at their own expense, but the cost to both the accused and the court system would be minimal, since the bond would cover the normal and reasonable expenses of both. If the system works well, frivolous lawsuits would be virtually eliminated, which would be a huge benefit for our society; if it doesn't work, it doesn't make the system much worse than it is today.

Anyway, that's my wacky idea for the day.

Sunday, August 2, 2009

Sadly largely lacking from political information: accurate accountability

Another contemplation of late: it's a rather unfortunate situation, in the voting population today, that there's a distinct lack of accurate long-term accountability for actions and policies, and their effects. This is certainly a phenomenon not restricted only to the political spectrum (eg: some people are baffled about how typical executive compensation packages destroy large corporations in the long-term), but it's especially noticeable and distressing in the political arena. How would Americans ever expect to be able to elect competent leaders, or judge their actions, I wonder, if they cannot even accurately correlate policies to effects?

For example, consider California's budget. The state has a massive deficit, which is causing much distress, and is proving very difficult to address for the current politicians. As a resident, one might be inclined to get rid of the politicians which created this mess, but to do so, one would have to understand the underlying causes of the problem. After all, California has some of the highest property, income, and sales tax rates, so it's highly doubtful that the problem is caused by not enough tax collection; yet you still have morons saying the state needs higher taxes to fix the budget problem! Now, I don't think you'll ever be successful at expunging all the morons from the state/media, but perhaps if the general population was somewhat more educated and cognoscente about the underlying causes, those idiots could be appropriately laughed at, instead of lauded as insightful.

Take, as another example, inflation. Inflation is an economic phenomenon which destroys wealth, creates a "hidden" tax on all assets, creates turmoil in financial markets, and generally encourages people to have destructive financial habits (such as shunning "saving" money, hording assets purely for investment purposes, and engaging in reckless borrowing and speculation just to preserve their wealth). It's generally a "bad thing", but is considered somewhat inevitable in all fiat currency societies, so much so that the government has official inflation targets, and some government officials periodically extol the "virtues" of inflation. If the general public understood that the misery associated with inflation was entirely preventable, that inflation was entirely created/controlled by government monetary policy, and that the loss of wealth and purchasing power they experienced was directly attributable to policies which created inflation (eg: printing a Trillion dollars to fund agenda waste spending), they might have an entirely appropriate unfavorable view of the politician(s) who stole their and their children's money by adopting such policies. Instead, we're cursed with a voting population which accepts such policies as "necessary" without appreciating the damage they cause, and is willing to accept when politicians predictably blame the damage on unrelated actions of the other party.

There are many more examples, of course, and no easy solution. One might argue for an IQ requirement to be part of the voting population, for example, but people not meeting the requirement would feel disenfranchised, and that could lead to discontent and civil unrest. It would be nice to have a non-partisan foundation operating in the public interest to provide unbiased information, but as long as the general population can vote equally, it wouldn't have much effect. It's lamentable, though, that in as progressed and information-savvy of a society as this, we are still governed essentially by the smooth talking and/of big spending few, backed by the idiocracy of the voting population, and politicians and talking heads can continue prattle off moronic distortions as factual statement to mindless applause, rather than immediate condemnation.