Wednesday, March 28, 2007

The Tale Of Two Parties: The Two Issues Neither Want To Discuss

There are two distinct things that the GOP and the Dems most certainly agree on.

These two areas of concurrence have to do with the future of our country; and if not given some serious consideration towards meaningful change, the things that average Americans have enjoyed over the many years, will be in jeopardy and great peril. In my view, the future of this country rests on these two things and both are (for the most part) domestic in nature.

Yes, there are two things that we will not hear (either) the GOP or the Dems talk about on the stump. They will not be discussed in any great length, therefore the people will not hear what they need to hear, in order to better understand why the vast majority of people are not being heard. And we can be damned sure that both sides will dodge any meaningful questions on the subjects -- no one will get much of a straight answer.

You see, both major political parties have the same goals in these two issues, both for two entirely different reasons. For them, the ends justify the means.

What are these two things?

1. The first thing both parties agree on is the undermining the prosperity of the middle class.

Both parties cater to rich people. The big difference is, some rich people like one side better and some, like the other better. Both are subject the personal ideologies of the two different sides.

The GOP attracts supporters that are favorable to big business and large multi-national companies, because there is a buck to be made. The Dems do too, just ask Teresa Heinz-Kerry about her corporation. The Heinz Corporation reportably gave loads of money to the GOP, in 2004. Then, ask Barbara Boxer about her stock in Halliburton. And whatever you do, be sure to ask Nancy Pelosi about her ties to Del Monte. Her relationship to that corporation may provide an answer as to why one U.S. territory will be exempt from the new federal minimum wage.

Don't get me wrong here, business is what the nation was built on. Free market capitalism and the cultivation of such, has been a key factor in the wealth and prosperity of many people. The incentive to create wealth is necessary to encourage risk-taking and entrepreneurship. Risk-taking and entrepreneurship are two major components of job-creation for those that do not want to take risks and the fostering of great opportunity, for those that do.

But, many times big donors and supporters are the people that run big corporations and the deck gets stacked against the little guy, trying to compete. One such area is the area of taxes. Rich people (of both parties) pay little, because they have so many write-offs. This is why neither party is talking about the Fair Tax (as it is coined), which is merely a consumption tax.

Just try talking to someone in Washington about having the rich pay their fair share, by taking their write-offs away. See what kind of response you get. Blah, blah, blah... the need to study it further... blah, blah... the poorest of people will suffer more...blah, blah, blah. Just present the issue and that's just what you'll get. But here's the thing, there are people that hold and own great capital, yet are able (through creative accounting that is legal) show no income. Therefore, they skate. They pay little to nothing in taxes, while the tax burden rests on those that have to work. This means it's primarily the middle class that shoulders the load. As the rich get by with paying less, someone has to pick up the slack. That's where small business owners and labor comes in. They are the only other ones that can produce the revenue, at least in this day and age.

With the consumption tax, every time someone buys a yacht or a Lear Jet, they will pay taxes. Every time someone buys a Mercedes or any other high ticket item, Uncle Sam will collect. There will be no more need to wrest away part of the average American's paycheck before he/she even sees it, no more need to look for deductions to keep from paying. And most of all, there will be no more need for the IRS, as we know it today.

But, the rich Republicans and the rich Democrats do not want to pay their fair share, nor do they want their donors to, either. They both would love to keep the middle class in their place, to pay the salaries of those that count and distribute the money, and to keep their own while doing it.

Another reason the consumption tax is so intriguing and takes on a different perspective is simple. Think of all of the illegal immigrants that are here, working, and not paying taxes of any kind (except state sales tax). The middle class is footing the bill for this one too, but that's another post.

This, in turn, leads me to the second reason:

2. The second thing that both parties agree on is the securing of the border.

Both want it open and porous, for two entirely different reasons. The GOP wants it open for cheap labor. The Dems want it open, because they see those that cross it illegally, as potential votes for them. For these two reasons, neither side will discuss it at any great length or depth.

A 2006 Zogby poll showed the overwhelming majority of people in America want stricter immigration policies. Most of the categories in this poll showed that two-thirds or more were not happy with the policies of that time. Today, I bet you could take another poll and it would show equally similar numbers, maybe even more in favor of controlling the border. So, the government is clearly demonstrating that it is ignoring the will of the people, just by refusing to engage in meaningful debate on the subject. No one talks about, except for a brave few that risk being labeled as a heartless group of xenophobic bigots.

Yet, it is this issue that will define the parameters of this nation for many years to come, If it is not dealt with soon enough, our healthcare systems will not be able to continue absorbing the costs of treating the medical conditions many that come across our border bring with them, when they cross it. As it stands now, it is the middle class that must pay more in premiums and more on out of pocket expenses to help the hospitals recuperate their enormous losses. So, to ask the illegal population to pay a tax when they buy a car, a stereo, or even a case of cerveza, doesn't sound like much to ask (if you ask me).

In all of this, we can all rest assured in one immutable truth. Nothing--repeat nothing-- will get done about these two difficult problems, unless the people demand more from their elected officials. And if there is an ambitious soul out there somewhere that wants to ride a wave of popular support, I highly recommend looking at these two issues and coming up with some good solid proposals to correct these two things that the current bunch in government thinks we are all too stupid to notice. If someone can display that kind of courage, they just may get my vote (and many millions more).

11 comments:

Greg said...

Actually, the two issues (big business control of our elected officials, and porous borders) go hand in hand. Big business likes open borders and illegal aliens b/c it allows them access to what amounts to slave labor - people with no legal status and no standing to complain about wages or working conditions. In turn, their overhead is lower, and they can continue to compete a little with third-world countries where every worker is a slave.

There is one simple fix to all of this: campaign finance reform. If no one can give more than, say, $500, big business won't be able to control the politicians. The rules would have to extend to the candidates themselves, or elected office would be reserved for only the very rich (and it's almost to that point already).

Then maybe the consumption tax and the open border issue will have a chance. I like the consumption tax more than the flat income tax.

BEING HAD said...

I think back in the good old days, back when the idea of community investment rules in banking and an income tax that went up the more money you made, there were a lot more small businesses and therefore more of a feeling of connectedness between people and their home towns. Ideally, taxing goods and services only raises the prices. Low wage earners therefore will suffer because the higher amount of money they will get in their pockets will not necessarily compensate for the say, 20% extra that everything will immediately cost more. They have a VAT in England and it makes things terribly expensive.

LASunsett said...

Greg,

//There is one simple fix to all of this: campaign finance reform. If no one can give more than, say, $500, big business won't be able to control the politicians.//

Sounds like a good idea to me, but you and I both know it won't happen.

1. It won't happen because the politicians won't let it happen. Never in a million years.

2. Even if it did happen, they'd find loopholes to get around it. (SEE: McCain-Feingold)

LASunsett said...

BH,

//Low wage earners therefore will suffer because the higher amount of money they will get in their pockets will not necessarily compensate for the say, 20% extra that everything will immediately cost more.//

Although this is a normal reaction, this isn't the case here with this proposal.

This is covered in the book "The Fair Tax" by John Linder and Neal Boortz, so I will not go too much into it here or Neal (being an attorney) might sue me for copyright infringement. ;)

Let's say a corporation makes the good old proverbial widget. The widget sells for $1.00. Twenty cents of that dollar goes to pay the massive amounts of CPAs and tax attorneys it takes that corporation to keep the company in compliance with the U.S. Tax Code.

When you get rid of the Tax Code as this proposal does, the cost of producing the widget goes down twenty cents because there is no longer a need for so many attorneys (sorry Greg) and CPAs. The company can then lower the price to the consumer. Then add the 20% sales tax (which is coincidentally, twenty cents) to the price after the cost is reduced and you will find it will be a wash.

In addition, the consumer will not have federal income tax withheld from their check. That will (in essence) be a raise for them. This will not eliminate withholdings for retirement, healthcare, or state/local tax withholdings. But the largest chunk of withholding is (by far) done by the federal government.

There's more to it and the book explains it very well. But realizing that it may be a bit hard to come by in Belarus, here is the Wiki entry on this.

LASunsett said...

Greg,

//I like the consumption tax more than the flat income tax.//

I do too.

Many people think that it was Steve Forbes that brought the flat tax proposal to the forefront, in recent years. But, it was Jerry Brown that made it part of his platform 4 years prior to Forbes' run for President.

Greg said...

When you get rid of the Tax Code as this proposal does, the cost of producing the widget goes down twenty cents because there is no longer a need for so many attorneys (sorry Greg) and CPAs.

LOL. No offense taken. I'm a government hack lawyer. There will always be work for me. Tax lawyers should find themselve a more honorable line of work. Like personal injury claims....

LASunsett said...

Greg,

//Tax lawyers should find themselve a more honorable line of work. Like personal injury claims....//

LOL. I hear that Keller & Keller have openings, that is, until real and meaningful tort reform becomes a reality.

A.C. McCloud said...

The prospect of the Fair Tax causing hard times for lawyers and CPAs might intrigue some blue collar folks, which is probably the reason it will never happen. Lots of politicians are lawyers.

BEING HAD said...

I hear what you are saying LA, but I also think that Mr McCloud is right. What would we do with all of the CPA's and tax lawyers? What are they going to do for a living?

I also just read that Dick Cheny's oil company is moving to the UAE because they will save millions in taxes. That's the vice president skipping town rather than paying his fair share to the country that allowed him to become rich. This is really who America is: Inevitably, rich people will find a way and the working classes get screwed.

LASunsett said...

BH,

//I also just read that Dick Cheny's oil company is moving to the UAE because they will save millions in taxes.//

True, but it isn't his oil company. He has divested himself of his shares, before he became VP.

AC,

//The prospect of the Fair Tax causing hard times for lawyers and CPAs might intrigue some blue collar folks, which is probably the reason it will never happen. Lots of politicians are lawyers.//

It would happen if the people would clamor for it, like they do other things. One thing I have learned over my years dealing with politics is, the squeaky wheels get the grease when the squeaks are loud and plentiful enough. This is especially true, when there is an election.

A.C. McCloud said...

I'm just coming at this from a pragmatic perspective, LA. I like the plan--I think it's the fairest of them all--but powerful people have ways of quashing things.

Interstate 40 in Memphis comes to mind, which had to be built well north of the city due to the threats of influential people (not all Republicans, mind you) in the original pathway. This might not be an exact analogy to Fair Tax, but let's just say after cries about immigration reform have fallen on deaf ears I'm very skeptical here, too.