Liberty MavenTake a Train to Tax Cut Town
July 1st, 2009 8:15 am | by Chad Fent | Published in Big Government, Commentary, Economics, government spending, inflation, national debt | 13 Responses
I was perusing the Federal Budget recently, and I had sort of a knee jerk reaction to most of the items I saw. Keep in mind, what I propose below is only a starting point, and it is in no way meant to be a “final draft”. I’m extremely interested in your input!
1st draft tax plan:
- GIVE AWAY AMTRAK. Privatizing CONRAIL worked, this will too. Savings: $1.4 Billion annually. Privatizing it also has the effect of generating tax revenues, as private ownership will make it profitable.
- Sell (at a minimum) 1/2 of all land owned by the Federal Gvt. “We the people” currently own an estimated 999,390,920 acres, about 44% of ALL US landmass. By the way, the Bureau of Land Management has no idea how much land it (we) own(s) anymore. Sell for $500/acre, generating $499,695,460,000, yep, that’s almost $500Billion. Besides, why does the Federal Gvt need all that land? Why are they aquiring more every day?
- Eliminate the Department of Education. Savings: $178 Billion annually.
- Eliminate the Department of Agriculture. Savings: $124 Billion annually.
- Bring ALL troops home, including closure of all foreign military bases (we don’t need troops in Europe and Japan. . .), estimated annual savings: $325 Billion (half the annual budget).
- Cut the Deparment of Health and Human Services. Thanks so much for telling us to wash our hands to avoid the pig flu! Common sense costs us: $71 Billion annually. They administer Medicare and Medicaid also, both complete failures that are underfunded (and we want to Nationalize healthcare? – we’ve already proven we can’t manage it!), which constitutes $666 Billion annually. It, as should social security, be a voluntary, not mandatory, system.
- Eliminate the Department of Homeland Security (this can be taken care of in our normal military budget). Savings: $44 BN
- Cut Department of Housing and Urban Development in half at a minimum. There’s $300 MN in there for housing for persons with AIDS, enough to buy 1,500 homes for $200,000 each. Savings $105 BN
- Cut Department of Labor in half at a minimum, savings: $27 BN
- Cut Department of State in half at a minimum (we fund foreign military to the tune of $5 BN a year, and disburse loans to foreign governments in the amount of $15 BN – which we’ll never get back). Savings: $35 BN.
- Eliminate, at a minimum, the entire IRS, as you’ll see reasoning for below, from the Treasury Dept, saving $11 BN
Total Savings / Earnings: $1.422 Trillion
12. Eliminate graduated scale federal income tax and replace with fair tax based on purchases – no tax on food, at all!! Set Federal fair tax rate @ 10% max (we could delve into this more and probably wriggle it to 8% or less). Total sales taxes (when including local) capped @ 20% (I don’t think any local ST is over 10%, is there?). Furthermore, you don’t need a complicated system to file returns, etc. You make your purchase, you’re done. Businesses file sales tax returns, this would just be one more line.
13. Reset marginal tax rate for businesses to 12.5% – matching the lowest in the world – we are currently the highest @~36%, and I think it is going to be raised to 38%. Can someone help me verify that? (This is a big reason why jobs get outsourced. Nonsensical regulatory compliance is also a major cost driver.)
For those who ask about the federal jobs that will be lost due to cuts in departments and budgets – think about all the jobs that will be created because you have a noticeable increase in your take home pay (more to save and invest, or more to spend), and all of the business activity that will be created because businesses will not be taxed on a third of what they produce! Even Barry O. knows that it is a good idea to cut taxes – but an extra $7 a week is meaningless. Let’s get out of this box of an ever-larger government! People – entrepreneurs – create wealth and prosperity, governments restrain it!!
Items 12 and 13 could be reduced over time as well, as I know we’d find PLENTY of other things in the fat trimming process to cut from the Federal Budget.
I would like to know anyone’s opinion, specifically, on the short term possibility of price inflation when tax cuts are massive and fast. I would actually like to state an immediate rebuttal before I get any commentary for you to consider.
If the spending is merely shifted from the government to the private sector, it is at worst a net zero effect. At best, the tax cuts would lead to lower consumer prices in the short term, as old debts could be paid off first. Further, many might actually save something, which is capital formation, the foundation of sound productive capacity investment. Then you must also consider a government that suddenly lives within it’s means.
This, therefore, would not necessitate the need for the government to continue borrowing – meaning less inflationary pressure, both monetarily, and at the price level. There are numerous effects that one could go on at length about, to which I will digress from at this moment.
What say you?
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July 1st, 2009 at 1:52 pm (#)
As we all know, cutting taxes and eliminating public programs does not create a net increase in jobs due to profit-taking in the private sector. Plus there are elements of our society that should not be left to private enterprise, profit does not make for good defense, schools, roads, rails, and health care.
July 1st, 2009 at 2:36 pm (#)
Wow, I disagree with that entirely. In fact, I think it is the furthest left side comment I've read on this site. Stating, "as we all know" assumes that there is some inherent truth in socialization in "some" programs.
1. Defense. Most of our "defense" is contracted out to private companies while the money simply passes through government hands. This process is ripe with fraud and abuse.
Apparently, I need to break this up a bit. . .
July 1st, 2009 at 2:38 pm (#)
Continued. . .
2. Schools. Proof is in the pudding. It still amazes me that people defend public schools, unless they are shilling for a teacher's union, or something else. I know personally public school employees (including principals) that KNOW our public school system is an outright failure. They crave to have the opportunity to go work for a Charter or Montessori. Charter, Montessori, and other private schools are a landslide success in comparison to public schools. Not only do the children turn out better test scores, they are more focused, more idependent, and most importantly, they can make decisions for themselves! All too often to we hear anecdotal stories about how public schools are now indoctrinating our kids into believing that global warming is fact, with absolutely NO scrutinization. Regardless of your position on global warming, the fact is that there is a huge amount of dissenting evidence against it, including restatements of data / opinion / facts from scientists who formerly claimed to have "believed" in it.
July 1st, 2009 at 2:39 pm (#)
Last Part
3. Roads. Toll roads seem to work just fine. You may complain about paying a toll to use a road, but it is only because the cost is in front of you. The real cost of "public" roads is still being burdened on you. The difference is you cannot see the cost of it, because it is hidden from you either through taxation or inflation, or both. In only 1 instance has a toll road been in worse repair than some public roads. Save that, all other toll roads I've been on (and that's a lot – all across the US) have been in much better condition than the best public roads, even the new ones.
4. Rails. I just gave you the best example of government fraud, abuse, and corruption. If you cannot see the difference between the efficiencies of AMTRAK compared to the UPRR or BNSF, I have no idea how I can convince you.
5. Health Care. Okay, are you some liberal blogger who just wanted to drag me out for a grudge match? Have you read nothing else on this site? I'm not even going to touch this one because if you don't know that you're wrong on this, you will never be a fan of liberty or freedom.
July 1st, 2009 at 5:59 pm (#)
I believe what was meant was:
As we all know, cutting taxes and eliminating public programs does create a net increase in jobs due to profit-taking in the private sector. All elements of our society should be left to private enterprise, profit is the only means for good defense, schools, roads, rails, and health care.
The author simply erred in the use of negatives…
July 2nd, 2009 at 4:03 pm (#)
AHA, I knew that must have been it.
July 4th, 2009 at 2:04 am (#)
Leaving every element of our society to the private sector is a bad idea. Some elements, sure, but not all. Scientific research for example, is a pretty bad one to leave up to private business as evidenced by the numerous delayed reports on ineffective drugs or harmful side effects. Besides, the history of science is full of examples of basic research with no foreseeable link to a marketable product leading eventually to huge breakthroughs.
July 6th, 2009 at 2:29 pm (#)
There is good and bad with everything. Nobody is really saying government is "all bad". They certainly have a role lin things like prosecuting force and fraud. But I think all of the authors / contributors on this site want the government to stick only to it's role as outlined in the Constitution.
Please give us your examples of "huge breakthroughs" that were carried out by government. Do you speak of programs such as NASA? To what end does this serve? We were racing with Russia on our space programs 5 decades ago. And for what? Did it serve the "greater good"? Or does it strike you as a classic example of proving who has a bigger. . . ego?
Continued. . .
July 6th, 2009 at 2:32 pm (#)
Part 2:
Here's the bad. The FDA, which is run by the wonderful government, is intended to be a line of defense for those products which you have labeled ineffective or harmful. While I agree that there are many harmful and ineffective products out there, why on earth would they be approved by the FDA? They are supposed to have the resources in place in order to perform due diligence so that ineffective and harmful drugs / food products do not make it to the market. Have they failed? Miserably. Numerous times.
Continued. . .
July 6th, 2009 at 2:32 pm (#)
Final part (could I write any more?):
Plus, they like to change their story (recommendation) at just the right time. I'll give you an example. Mercury is toxic when inhaled, ingested, or absorbed through the skin at even a small level. This has been known for years. The effects are especially harmful for pregnant women. Now, the federal government has been priming to pass this cap and trade nonsense for quite a while. One piece of that legislation is to effectively outlaw old incandescent light bulbs. Therefore, CFL's (compact flourescents) will practically be "mandated". Forget about the government overreach here. Do you know that technically, the amount of mercury in that CFL is toxic? If you drop one on the ground and it breaks, under the "old" FDA guidelines, you practically would have been required to hire a hazmat crew to come and clean up the broken bulb. Now, conveniently, the FDA has increased the level of "acceptable" mercury content ingestable. Is that just a coincidence? Maybe. But personally, I'm going to err on the side of skepticism and believe that it is a little too convenient.
July 8th, 2009 at 7:21 am (#)
I'm not speaking only of scientists employed by the government, but scientists at universities and private institutions funded by the government as well through grants. One only needs to look through the history of Nobel Prize winners to see people who have made significant contributions to biomedical research, often working on problems that had no forseeable marketable products. For example, the 2008 prize in Chemistry was given for the discovery of a fluorescent protein that enables scientists to "light up" cells. The only marketable products are made for scientists to use in research, but the actual discovery itself facilitated many other forms of research that have led to greater understanding of pretty much any disease you want to name. It was a huge advance. A publicly funded scientist has no boards or shareholders to appease when trying out radical ideas. Without the constant push for profit, they are free to perform research private corporations can not. That's not to say private companies serve no purpose, as both are needed. The point is that a well funded public science program is essential for scientific progress and for America to retain it's technical edge in the world.
July 8th, 2009 at 7:29 am (#)
Harmful and ineffective products are approved by the FDA for any number of reasons. One is not enough data, another is data actually being withheld by companies who would prefer to not lose a cash cow. Given the immense cost of developing a new drug, that's understandable, but the cost could be thousands of lives (as in the case of a drug like Vioxx). The FDA has its successes as well as its failures. What organization doesn't? It would be better to institute reforms to make the FDA a better organization. Besides, what is the alternative to a government run program like the FDA? Private companies policing themselves? No thank you. Their records are much worse, especially if you count the supplement and homeopathic industries.
July 13th, 2009 at 3:17 pm (#)
Thank you for clarifying.
I'm interested in this "flourescent protein". Is there any component of mercury? That could be a stumbling block. I could also point out Nobel Prize winners (Al Gore is just one example) that are completely out of their minds, convincing people that they have proven science when the debate is far from over. But I'll digress.
As an aside, I wanted your comment before I added this, contained in Article 1, Section 8 of the Constitution:
"To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries; "
This is merely the right of patent, but it has been twisted in such a way that many think it is the duty of government to fund and solve scientific problems. We could go on for a long time, but I thought you might like to read this.