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Liberal Democracy

Liberal Democracy
The Free State

Wednesday, September 14, 2011

Rep. Paul Ryan: Tax Reform is Key to Fixing the Economy: How to do it



I believe everyone on the American Political Spectrum believes that America needs Tax Reform at the Federal Level. Its just a question of how to do it, socialists believe that we should have Tax Reform. That closes a lot of loopholes and also raises rates on everyone, to provide
a lot more Public Services. Which they believe would benefit the economy for everyone. Conservatives believe in the Flat Tax, basically one Tax Rate for everyone or perhaps just three rates. There are also conservatives that believe in what's called a "Fair Tax", which is a Consumption Tax taxing what people spend money on. Rather then taxing money that they make, that tax if done right I as a liberal would be in favor of as well. Liberals believe in simplifying the Tax Code, closing Tax Loopholes and lowering Tax Rates in exchange. Libertarians, some believe in eliminating the Tax Code all together and having no Federal Taxes. Others who I believe are adults and reasonable, believe in the "Fair Tax", something that Gary Johnson is running on for President. Ironically in the Republican Party, even though he's a libertarian but thats a different blog I've already written. So there's broad agreement for the need for Tax Reform in America and its a matter of how to do it. But I believe there's at least one step that has to be done first before we have Tax Reform. Figuring out exactly what the Federal Government should be doing. And then how much money through taxes should we raise to fund the Federal Government and then can we afford to do it. For the economy and our broader Fiscal Policy, if you want the Federal Government to do more. Then your going to have to raise more money to pay for that or get the economy strong enough to pay for it. If you want the government to do less, then you have to figure out what to reform or cut and based on that. How much lower taxes will be.

I have a two step plan that I've laid out in previous blogs that I call Government Reform, first step is reforming the Federal Government. To get it back to doing the things that only it can do. And that at least historically has done very well and been efficient and just by reforming the Federal Government and making it work better. You would make it smaller and cheaper with a smaller workforce, whether thats your goal or not. My goal in this is to make it more effective and efficient which would make it cheaper and smaller. And to give you a few examples of this, decentralization, independence and consolidation. Or Dic if you prefer but also some reforms as well but I think Dic sounds better so I'm going with that. Decentralization, take all of our Social Insurance Programs and pass them down to the States. But not for the States to run and this is where independence comes in. Each State would have their own system in how these programs operate, that would have to meet basic Federal Standards. But each of these programs would be Semi Private Non Profit Self Financed Community Services and each State would have their own version of each these programs. To address the needs that they work on for the people of their State. Consolidation, the Interior Department, Energy Department and Agriculture Department into one new Department of Natural Resources. Take the Public Health Service out of the Health Department including NIH. And make it and Independent Service. And put the Education Department And combine it with the Department of Human Services that would become a regulator of the Community Services in America. Reform, pull all of our Armed Forces out of Developed Nations that can afford to defend themselves and put that money into Deficit Reduction.

And after that the Federal Government would have saved a lot of money and not need a Federal Budget of 3.7T$, because we would have saved 200B$ a year alone in defense. About 1.5T$ in Social Security and Medicare because the Federal Government would no longer be running these services. Each State would have their own system for them that would be Self Financed, the FEDS would regulate them instead. I believe this plan would save the Federal Government and Tax Payers about 2T$ a year. And then I would move to Tax Reform, eliminating most if not all Tax Loopholes but I would settle for most. And then have a Consumption Tax, taxing consumption instead of income. With low rates on the essentials that people need to survive and higher rates on Luxury Items. And keeping the same Tax Credits that are aimed at helping the Working Poor.

Click on the link of the blog to see Rep. Paul Ryan Chairman of the Budget Committee on Tax Reform