All this debate over who gets credit for the “Bush Tax Cuts” is deck-chair rearrangement. The real issue is that the tax system is broken, and that in order to fix it we have to return to a debate about the fundamentals of government finance: what should be paid for and who should be paying for it.
Ours is not the only system of taxes in the world, and many things have changed since the country decided to tax incomes in 1913.
Next year wil be the 100th anniversary of the permanent income tax. Is it not time for us to re-examine the assumptions under which it was imposed, and begin to consider alternative tax constructs?
Worst case scenario: even if we wind up back where we started, we will have at least reminded the American public that while our system of government finance is not ideal, it is the best choice available given our national circumstances.
Best case scenario: we make everything a whole lot simpler, and we improve the implicit equity of the system so we don’t have to make taxes a constant political football.
National Public Radio (NPR) is running a series on the status of the American Dream as we move into the general election. The series is balanced to a great degree, something that I am certain requires some effort on the part of the Morning Edition team.
The program frames the disagreements between Republicans and Democrats as a difference between “opportunity” and “entitlement.” That may be the case, but if it is, it misses the point.
I haven’t taken any polls recently, but anecdote and experience suggest that the only liberals who disagree that the path toward prosperity is paved with opportunity are on the far left of the American political spectrum. In the same way, those who oppose any form of government assistance to Americans in dire straits sit on the furthest right extreme of that same political spectrum. What we need to do is to agree upon principles that will guide government’s approach to both opportunity and entitlements.
Ours are these:
1. Equal opportunity, not corporate welfare. Government should work to ensure equality of opportunity for all, without favor. Government should not be in the business of bestowing opportunity or of denying it, but of ensuring that neither government nor private entities can either bestow or deny it.
2. Entitlements should be a safety net, not a hammock.Government should provide entitlements only to the extent that they are necessary to ensure against the impoverishment or destitution of the citizen. Government should not be in the business of providing a comfortable life to its citizens, and the focus should be on ensuring that citizens are can provide for themselves.
The question, then, is how do we ensure equal opportunity and a social safety net, and stop both parties from spending tax dollars bestowing opportunity on politically connected corporations or politically powerful defenders of entitlements.