A year ago January—what a moment!—the two parties were in a tax cut bidding war. Each side was attempting to gain political advantage by trumping the other guy's proposal. Everything was on the table: capital gains tax cuts, income tax cuts, inheritance tax cuts, and every manner of tax credit.
"Forget the minimum wage," says Nate, a dishwasher and cook's helper at our restaurant. "It's taxes that are killing me." He is a college student by day, washes about 1,000 dishes during the dinner rush, and stuffs and rolls grape leaves until midnight.
George Wallace's famous contention that "there ain't a dime's worth of difference" between Democrats and Republicans has received ample corroboration since the 1994 elections. The $50 billion Mexican peso bailout, opposed by some 80% of Americans, has been only the most flagrant example of the real meaning of "bipartisanship."
If it had the will, Congress could kill the redistributionist monster, the Welfare State, that's consumed at least $5 trillion in wealth since the Great Society. How? Cut anywhere and everywhere, abolish whole agencies, and return the $350 billion saved from next year's spending to the taxpayers in the form of a tax cut of the same size.
The income tax has become politically vulnerable. Some politicians have said we should replace it with a national sales tax. Yet, far from reducing the total tax burden, this would merely shift the burden around from individual filers to retailers.
The Republican Congress has had nine months to reduce taxes. Even one percent would be appreciated. Instead, we get convoluted plans that will be "revolutionary" at some point in the far-distant future. Enough of welfare reform. It's time to reform taxes.
Left-liberals hate the idea, but the prosperity of everyone in a market economy depends in good part on the rich. The capital they have earned and saved generates investments and creates jobs. Their savings keep interest rates low. Their actions are philanthropic in every sense. In their professions, they help everyone prosper. In their charity, they help the poor, and allow the arts and education to thrive.
To understand the House Republicans' budget "revolution," pay careful attention to this number: $55 billion. That's the amount federal spending will increase next year. A year later, according to their plan, the budget ticks up another $38.1 billion. It goes up an average of $45 billion every year thereafter.
A poll in March reported that most people would prefer "deficit reduction" to "tax cuts." Polls and the media lie all the time, but this one refutes itself. If people really wanted to be taxed, they would pay up without being threatened by audits, fines, special agents, and jail terms.
Performance budgeting (PB) is the newest strategy to make the public sector work. Yet as with other similar strategies, PB is fundamentally flawed. Without a system of profit and loss, a bureaucracy not only has trouble motivating its employees; it can't determine the value of what they are doing in the first place.
