Our tax system is broken. We spend too much time complying with tax laws and we simply pay too much to Uncle Sam.
The nation needs comprehensive tax reform now. We need a tax system that is fair and taxes our citizenry at the lowest amount possible. Our present system puts an unnecessary burden on each of us and stifles our economy by taking too much money out of our pockets and putting it in the hands of an irresponsible Congress and unelected bureaucrats to spend it as they, not we the taxpayers, see fit.
1. Repeal the Current System and Replace it With an Entirely New System Ideally, we need to stop taxing savings, earnings and investment, and instead adopt the Fair Tax, a proposed national sales tax, or the Flat Tax. Either tax is preferable to our current system.
The Fair Tax would have to be coupled with repeal of the 16th Amendment, so we do not end up with both an income tax and a sales tax.
2. Repeal the Corporate Tax The corporate tax produces less than five percent of federal revenue, while discouraging job creation and business investment. Because it is one of the most burdensome in the developed world, it encourages a flight of capital out of the United States. We need to repeal it immediately to stimulate growth in our economy.
3. Extend the Bush Tax Cuts of 2001 and 2003 All the Bush Tax Cuts will expire on January 1, meaning higher taxes on parents with children, joint filers, small business owners and almost all wage earners. Cutting taxes is the only way we can foster the creative entrepreneurship that will help us grow out of the present fiscal crisis.
Since the Democrats took complete control of our government we have seen a continuous march by government in taking over sectors of our economy:
• ObamaCare is the poster child for the idea that Washington knows best. ObamaCare is a blatant attempt to take over 1/6th of our national economy.
• As part of the passage of ObamaCare, the Democratic Congress slipped in the nationalization of the student loan market. It is now effectively impossible to get a student loan without going through the bureaucrats at the Department of Education.
• Using the housing crisis brought on by congressional encouragement of sub-prime lending, the national government is now absorbing the entire mortgage industry. There are still private lenders, but their lending rates and practices are no longer set by a competitive marketplace, but by mandate from the quasi-governmental institutions in Washington, the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Housing Administration.
• And, of course, who can forget the heavy hand of government becoming a major shareholder of General Motors and the banking industry.
1. Repeal and Replace ObamaCare. There is no question this legislation must go. Congress must, at a minimum, defend this onerous takeover of our health care industry. But, it is not enough for us to repeal this national healthcare law and then do nothing. We must enact a series of our own market-driven ideas to bring the cost of healthcare down:
A. Create real competition and choice in the insurance market. This includes making insurance portable and increasing incentives for Health Savings Accounts.
B. Reform the legal system to cut down on frivolous lawsuits. We need to cap the amount of rewards for pain and suffering damages and bring the court awards in line with the true economic consequences in the event a doctor commits malpractice.
C. Allow the states to control Medicare and Medicaid. This will cut waste and lower administrative costs and allow the states to exert stiffer penalties on those who commit Medicare fraud.
D. Reform the FDA drug review process to encourage more innovation in the invention of drugs and medical devices.
2. Stop deciding which companies to save and which to allow to fail. We live in a free market system. Companies should receive both the potential benefits and the potential risks associated with being in business. It is not an appropriate role for government to decide who the winners and losers are. We have seen this market interference in the automobile industry and in the financial sector. The financial services bill that is now in a House-Senate conference will greatly expand the exposure of lending institutions to political pressure, and will do nothing to protect the taxpayers from the need for future bailouts. I have seen first-hand the market distortions in the energy sector, and the cap-and-tax legislation that passed the House and is now before the Senate will make that problem worse.
3. Allow the market to work in housing.
Much of the housing crisis was caused by Washington and its goal of increasing homeownership among those who were not in a position to buy. Removing risk for banks, artificially stimulating only one kind of home buying (with the $8,000 tax credit), and now initiating a takeover of Wall Street will only lengthen and deepen the on-going housing crisis. What relief we have gotten has come about as the market has dictated a return to realistic home prices. The Federal Reserve and the U.S. government must stop changing lending rules and allow the market to settle. It must divest itself of Fannie Mae and Freddie Mac, and it must initiate an immediate audit and overhaul of the bankrupt Federal Housing Administration. This will restore critical confidence and allow the market to work with much less interference from bureaucrats.
This is perhaps the biggest problem our nation faces. The national government has been growing steadily for nearly a hundred years. Recently, that growth has shifted into exponential mode, and there seems to be no end in sight. This excessive spending is continually adding to our national debt and threatens to mortgage the lives of our children and grandchildren.
It is essential we apply the brakes on spending immediately.
This is a multi-year project, and it needs to be seen in that context. We need to set a goal of cutting the size of the national government in half over a five or ten year period. We are not going to accomplish it overnight, and the uncertainty that would create is not desirable anyway, but we need to actually “bend the curve,” as President Obama suggested, but we need to bend it down, not up, as his proposals seem to do.
There are plenty of candidates for this proposed “five-year diet to extinction.” One need only look at the areas where Washington is now dominant, but where the States are better suited to action.
Where to cut:
The Department of Education.
If there was ever a local responsibility, it is educating our children. The budget of the Department of Education should be cut 20 percent a year for five years, with the ultimate goal of eliminating the department and allowing the states to use the savings to go directly to the classroom.
Savings: $46.7 billion
The Department of Energy.
As constituted, this department wastes billions of dollars on uneconomic (and often counterproductive) schemes supposedly leading back to the Garden of Eden, when the world had no energy needs. Over five years, this department should disappear.
Savings: $26.4 billion
Public Lands Management.
The Departments of Interior and Agriculture between them administer nearly one-third of the land mass of the United States, over 60 percent here in Utah! This land would be much better administered at the State and local level.
Medicaid.
This is already a State program, but interference from Washington makes it a far less efficient one than it needs to be. The States are capable of providing medical assistance for the poor, as part of their traditional welfare activities. Sectioning off medical care in this way was a mistake from the beginning, and over five years, this mistake can be undone.
Social Security.
The most crushing burdens imposed on citizens are found here. Unfortunately, these Ponzi schemes have left us with a situation where some generation is going to have to pay twice, once for their own old age, and once for the old age of those who were promised benefits there is no money to pay for.
The solution lies in using the power of the economy, but it will not be painless. We must honor the commitment we have made to those who are now on Social Security and Medicare, and those approaching that status. For example, those at a certain age (for the purpose of the debate, let’s say 50) would be paid out by the system as planned. The money to pay for these commitments will have to come from those under 50 still in the work force.
That generation will thus have to pay for the commitments made to their parents, and also provide for their own future. Luckily, the use of the productive capacity of a free market economy can generate sufficient wealth to do that. Rep. Paul Ryan has outlined the path in his excellent Roadmap for America’s Future.
As part of this effort, we need to remind Americans that they are primarily responsible for themselves, and turn back from the eternal dependence on government Franklin Roosevelt embarked upon. I have a strong faith in freedom and self-reliance as keys to a prosperous and sustainable future. Wage earners will be incentivized with greater opportunities for personal savings programs.
Federalism.
There are plenty of other programs that simply do not belong at the federal level. These programs should be transferred to the states, where legislatures are far more incentivized to keep costs low and programs lean, than in Washington. The States are going to have to face up to their responsibilities under the devolution of power I have outlined above. Transfer of responsibilities from Washington to the States will not be free. For too long States have been content to let Washington collect taxes (as it efficiently does) and then spend them, even with the restrictions and distortions imposed from above.
That will have to change. State and local governments will have to make their own taxing and spending decisions, and they will be held responsible by the voters closest to them.
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