Chief
Justice Robert’s ruling on the healthcare bill two weeks ago did not expand the
government’s tax power – the federal government has already possessed, for far
too long, the ability and pernicious will to use the federal tax code to
influence behaviors either positively or negatively.
What it
DOES do is highlight the increasingly grave necessity for tax reform, and the
adoption of a more efficient code that will help eliminate such foolishness.
Few
issues are as defining in terms of political alignment than tax policy. So
let’s examine the proffered tax plans of the two Presidential candidates;
President
Obama, aside from continuing to champion what is possibly the largest
regressive tax hike in American history – Obamacare – has repeatedly signaled
his intent to raise taxes on the “Rich”; which is synonymous with small
business owners and job creators, as what is being discussed is tax on income,
not accumulated wealth (which is pillaged at death by inheritance tax, not by
income tax while the victim is still breathing).
The
problem with Obama’s approach, as demonstrated time and again over several
generations, is that it not only does nothing to raise revenues, tending
instead only to encourage increased use of tax shelters, but emplaces limits on
investment – real investment, not the Administration’s euphemism for racking up
the national credit card.
Which
brings up the other defining aspect of Barack Obama’s tax policy, which is the obsessive
use of obfuscatory language to describe the policy. Referring to the practice
of letting someone keep a greater percentage of their own money as “spending”,
while dumping millions into boondoggles like Solyndra, and billions into
welfare and entitlement programs, as “investment”, may make for a cute election
year ploy, but translates into terrible economic policy.
The
Democrat’s ubiquitous “tax the rich” incantation is a great Robin Hood-sounding
theme to play for the masses; but lost amid the rhetoric is the critical
question, the only thing that really matters – is raising taxes on higher
income earners sound economic policy?
To his
enduring credit, Governor Romney seems to understand that the answer is “No”,
insomuch as such a policy results in further constriction of the general
economy (which of course hurts the non-rich masses that Obama and company claim
such sympathy for) and to actually reduce government revenue, through a
combination of reduced employment and increased tax sheltering.
The politically
messier answer is that tax relief is more important and economically more
effective at the higher rates. Romney appears to get this truism as well, as
one of the highlights of his platform is an all-important reduction in the
marginal tax rate. This single policy would do far more to stimulate the
flagging American economy than anything the current administration has even
thought of in the last 3 years.
It is a
little unfortunate that the thought is not sufficiently carried through to
include a plan for substantive, sweeping tax reform, the sort cried out for by
the Roberts Ruling. A simplified code -- where income up to $35,000 is not
taxed, and everything above that is taxed at a flat rate of 20%, (or in that
vicinity) coupled with a removal of virtually all deductions, credits, and so
forth – would not only provide the jump start that the economy needs, but would
do away with the threat of further schemes like the Obamacare
mandate-penalty-tax that many conservatives rightly fear could slip Constitutional
scrutiny by taking advantage of the taxing power of Congress.
In
Romney’s defense, with the economy in the condition it is currently, the
emphasis needs to be on first aid – freeing energy production, marginal rate
cuts, emancipating business from over-regulation – with consideration of a long
term treatment regimen of systemic reform set aside for the near future.
The
relative treatment of the tax question illustrates the core divergence between
the two schools of thought – the liberal one is an emotional appeal to class distinctions
and envy, with little, if any, positive effect on revenue, and a measurable
adverse impact on economic growth – the conservative one, a harder sell on the
surface, but girded by economic truth and producing real, positive impacts on
the economy, and ultimately on government revenue.
This
requires someone with the acumen, ability, and courage to speak to those
crucial points, and frame the argument in a way that is digestible by the
American public. This is Romney’s job; to make the sale, and to use all the
weapons – including the SCOTUS healthcare ruling -- at his disposal to do
effectively.
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