Among the tax discussions on Capitol Hill this year are the proposed changes in the 80-year-old inheritance tax. Part of the Republican tax plan calls for an increase in the estate tax exemption from $600,000 to $1,000,000, with considerably larger exemptions for farmers and other small business owners. The less generous Clinton Administration proposal would provide low interest rates on estate taxes paid in installments.
As recently as 50 years ago, economists regarded the vitality of the economy as consonant with its ability to produce things people want (and would pay for). Today, the economy has been redefined into something called the Gross Domestic Product, or GDP. It measures all goods and services brought to market in a given year. But is it really an accurate measure of how well an economy is serving people's needs? Here are some outlandish ways the GDP can be boosted.
At last, the Republican Congress has proposed cutting death taxes. It wants the exemption to be raised from $600,000 to $1 million. Not bad for a start. But if Congress is serious about reducing the tax, the rate should immediately index the exemption to the inflation rate. If the inflation of the last 10 years continues over the next, the $1 million exemption will be worth a third less. Why should the government get rich by mismanaging the monetary system?
The Dole Foundation is a project of the United Cerebral Palsy Association (operating budget: $540 million). Fully 80 percent of the UCPA's funding comes straight from the taxpayer's wallet. Voluntary contributions are only 11 percent, less than the percentage the UCPA spends on pro-welfare political lobbying. The Doles do not fund the Dole Foundation. Taxpayers do. No wonder he doesn't talk about it much.
They should have called it the Federal Advisory Panel for a Huge and Sneaky Tax Increase and a Massive Increase in Corporate Welfare. That—and not "privatization"—is the real upshot of what the advisory counsel to fix Social Security recommended.
Academic fraud has never been more acceptable. Works of literature are purged of material contrary to the latest political fad. Photographs are airbrushed to exclude incorrect habits like smoking. Movies with the wrong message are cut.
The same is true in economics, and the most recent con job involves the manipulation of data that reflect poorly on the government.
Republicans seemed sincere when they argued against a minimum-wage increase. In their rhetoric they were right: it increases unemployment, especially among the poor, by making work illegal. Even the head of Clinton's Council of Economic Advisers denounced the minimum wage—when he was a private economist.
The good news is that supply-siders want to cut taxes. The bad news is...well, let's accentuate the positive for the moment. The supply-siders reject Washington's tendency to think in static terms. To most politicians and bureaucrats, the economy is a pie for the tax collectors and special interests to slice up and gorge themselves on. Then they are shocked when the economy stops growing.
In an episode of "Married With Children," Jefferson Darcy tells Al Bundy that he can get fast cash by suing a mall for his stress-related injury. "Malls set aside millions for this type of thing," says Darcy. "If we don't get it, it'll go to Social Security and then no one will get it!"
Everyone laughs, but the reality is no laughing matter.
"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.
