Given that this whole ObamaCare/shutdown/who's-the-biggest-two-year-old-here thing has seen another attempt to paint the Republicans as obstructionists who only know how to say no to people, etc., it's important to point out that many in our party are in fact trying to come up with positive reform proposals. Take Mike Lee, for example.
Last month, Utah's junior senator introduced a thorough tax-reform plan, one with the potential to steal a lot of the Dems' thunder, if only it can gain traction. Probably not perfect, but the point is it has lots of goody-PR stuff. For instance:
-Lots of tax credits and tax deductions would be eliminated, but mainly for those under a certain income level. Most households making less than $300,000 a year would be unaffected. Moreover, the "charitable deduction" option would be expanded across the board. This is good because, while people like having as many tax write-off options as possible, they also like the idea of a simple tax code, and the fact that the remaining deductions are stacked towards the middle class doesn't hurt.
-Speaking of simplification, the system of tax brackets is greatly reduced under Lee's plan, with a 15% rate for everyone making less than $87,850, and a 35% rate for everyone making more than that.
-There's a lot here, too, for families with children to like: There would be a $2,500 tax credit per child, which would carry over into both income and payroll tax deduction. Lee argues that this would reduce the burden families face in raising kids, shifting it towards those without such obligations. This is a way, he says, of equalizing the de facto tax burden, and while I'm not so sure I personally agree with that, it also has the potential to play very well with middle-class families, the people Obama and Co. always claim to be sticking up for.
And that's the real takeaway here. As we all know, if we're paying any attention to the news feed from the last couple weeks, the ObamaCare trainwreck has people starting to doubt the administration's ability to help out the "little guy," something it's made its reputation on. A huge opportunity may be opening up here to show who has the better plan to strengthen the middle class--that Holy Grail of politics--and this is a place where the GOP can stake out its ground.
I don't want to give the impression that I'm endorsing the plan wholeheartedly. In a perfect world, I'd like a one-rate-fits-all kind of plan, and this particular formulation might antagonize the upper-middle-class somewhat, given the relative hike for those making 100K or thereabout. But that's not the only issue here. What's important to note is the activity some of our people in Congress are continuing to show. This idea can be batted about, revised, maybe even rejected (okay, probably even rejected). But the point is, it's the sort of thing that gets people talking on issues like tax reform. And that's a good thing.
I'm also glad to see the way Mike Lee is going. He has very conservative credentials, both objectively and in how the base perceives him; and while guys like Cruz and Rubio are drawing a lot of lightning, he and others are quietly building conservative agendas. The party needs both types, and good for him for taking the least flashy role.
Last month, Utah's junior senator introduced a thorough tax-reform plan, one with the potential to steal a lot of the Dems' thunder, if only it can gain traction. Probably not perfect, but the point is it has lots of goody-PR stuff. For instance:
-Lots of tax credits and tax deductions would be eliminated, but mainly for those under a certain income level. Most households making less than $300,000 a year would be unaffected. Moreover, the "charitable deduction" option would be expanded across the board. This is good because, while people like having as many tax write-off options as possible, they also like the idea of a simple tax code, and the fact that the remaining deductions are stacked towards the middle class doesn't hurt.
-Speaking of simplification, the system of tax brackets is greatly reduced under Lee's plan, with a 15% rate for everyone making less than $87,850, and a 35% rate for everyone making more than that.
-There's a lot here, too, for families with children to like: There would be a $2,500 tax credit per child, which would carry over into both income and payroll tax deduction. Lee argues that this would reduce the burden families face in raising kids, shifting it towards those without such obligations. This is a way, he says, of equalizing the de facto tax burden, and while I'm not so sure I personally agree with that, it also has the potential to play very well with middle-class families, the people Obama and Co. always claim to be sticking up for.
And that's the real takeaway here. As we all know, if we're paying any attention to the news feed from the last couple weeks, the ObamaCare trainwreck has people starting to doubt the administration's ability to help out the "little guy," something it's made its reputation on. A huge opportunity may be opening up here to show who has the better plan to strengthen the middle class--that Holy Grail of politics--and this is a place where the GOP can stake out its ground.
I don't want to give the impression that I'm endorsing the plan wholeheartedly. In a perfect world, I'd like a one-rate-fits-all kind of plan, and this particular formulation might antagonize the upper-middle-class somewhat, given the relative hike for those making 100K or thereabout. But that's not the only issue here. What's important to note is the activity some of our people in Congress are continuing to show. This idea can be batted about, revised, maybe even rejected (okay, probably even rejected). But the point is, it's the sort of thing that gets people talking on issues like tax reform. And that's a good thing.
I'm also glad to see the way Mike Lee is going. He has very conservative credentials, both objectively and in how the base perceives him; and while guys like Cruz and Rubio are drawing a lot of lightning, he and others are quietly building conservative agendas. The party needs both types, and good for him for taking the least flashy role.
there is no question Republicans must work extremely hard to get a message out that offers practical solutions. This is not an easy task in an era where virtually all media has become "branded" as leaning left or right. Conservatives must be willing to go on te networks to state their case, and they have to be good, since they will always be forced to defend. Left leaning stars such as Hillary will be thrown puffballs. Right now, Republicans need to be proposing legislation that will make health care reform lower cost.
ReplyDeleteJed, no question indeed. The media is always going to be against us, but that's not a reason to stop engaging with them. Meeting them on their own ground is crucial if we are to effect any kind of change.
ReplyDeleteThe GOP really needs to find someone to make health care reform "their" thing, the way Paul Ryan has made the budget "his" thing. I've thought maybe Ron Johnson could fill that role, he has some background with the medical profession.
I'm not sure exactly what Lee means by "de facto tax burden" but I could understand that as referring to the notion that parents are taking on the responsibility of producing the next generation of tax payers. That's important because our system relies quite heavily on the young supporting the old. In other words, parents should get a break because they are contributing to the general retirement plan while non-parents are not.
ReplyDeletePersonally, if we are going to go down the road of Obamacare and who knows what entitlements to follow, I couldn't agree more with his reasoning. Actually, I'd prefer that anyone who doesn't kick at least one child into the system get their benefits cut, but that's probably not going to happen.
P.S. I always enjoy throwing that concept into the faces of those who "couldn't bear to bring a child into this awful world!"
ReplyDeleteEqually giddy to "punish" those married couples for whom children are unfortunately not an option?
DeleteJed, Health care reform and immigration will be the two headline issues until Obama leaves office. They are the most critical. But the GOP needs a complete agenda that we can use to appeal to the public at large. I don't buy Lee's ideas, but that doesn't mean we don't need a program.
ReplyDeleteEric, if you're willing to contribute to the generational retirement plan, adoption is always an option. ;-)
ReplyDeleteIn seriousness, I'm not looking at this from the perspective of reward or punishment. I'm merely observing that this is the system which we've built for ourselves. Our national retirement plan--if you will--isn't being built on wealth or production, it's built on generations. The only way for this generation's retirement to be better than the last is for the next generation to be larger than the current. And so on and so on. Thus, the government needs to encourage child-rearing as we move toward a social-welfare state as those states are most prone to population decline.
Obviously, I don't like such a system. It's too precarious. Plus, taken to it's logical end, I would expect some sort of surtax on special-needs children since they are less likely to ever contribute to the "plan."
That said, I do think there remains a philosophical justification for a child tax credit even with a productivity/wealth-based retirement system. Regardless whether one does, it goes without saying that a childless individual would be able to put away more for his retirement than one with children. And ultimately, society is an inter-generational proposition.
Also, remember that extension of favor to one group is not a punishment to the remaining anymore than you getting a raise punishes your coworkers.
tryanmax, that's basically what he's getting at there. He reasons that couples with children are really paying twice over, through the taxes they already have to pay, and then the costs of raising children, which ain't exactly a walk in the park. He argues that this plan would equalize the tax burden between such families on the one side, and wealthier childless households on the other, because the tax credits would eliminate some of the income taxes the former would have to pay, and a bit of the payroll tax if anything's left over from the child credits.
ReplyDeleteI think a philosophical argument can definitely be made about the wisdom of such an approach; after all, societies have to regenerate themselves by having children, and the ones that don't reproduce (Japan, most of Europe) are headed for collapse. This doesn't mean I'm entirely on board with such proposals; in theory, I would like a very simple tax rate, without deductions and credits being used to play favorites. But promoting children is definitely something that should be taken under consideration.
Besides, if ObamaCare or any other expansive welfare system is to work at all in the long run, it depends on having lots of young people to support it. So there's that.
T-Rav, I can appreciate the philosophy behind eliminating all deductions and credits. Suffice it to say, it's something that would need to be chipped at rather than struck in a single blow. And in that case, the CTC would probably be the very last thing to go.
ReplyDeleteI looked into Lee's proposal after I wrote last night's comment. I think he does a fair job of actually explaining that they system relies on future generations to make his CTC case. I'm impressed. No, I don't expect it to satisfy the ideologically pure, but making such a case does draw on conservative principles. Too often, the right forgets that we're not going to construct a conservative framework overnight. Until then, we need to bring a conservative approach to the liberal framework in place.
>>adoption is always an option.>>
ReplyDeleteMy wife has MS and can barely take care of herself (and the dog when I'm not home -- fortunately he's mostly a good boy), so not an option. My side-gig as an ump/ref for youth and high school sports also serves as a quasi-babysitter gig for local kids, though, so I've at least got that going for us. ;-)
Eric, sorry about your wife's MS. I've known some people with that and I don't know if there's an appropriate response beyond "that really sucks."
ReplyDeleteLike I said, I mainly like to stick the idea in the craw of libs who think this world is too awful for children. (To the contrary, the world has never been better for children.) I know some who think they should get a tax credit. They don't like to consider how the social programs they champion depend on population growth, which they regard as bad.
tryanmax, that's a good point. I intend to write a post next week on the pros and cons of the whole "let it burn" theory, versus modifying the crapfest that's in place now.
ReplyDeleteI do want to modify slightly your summation of liberals' attitude toward children--it's not that they think the world is too awful for children, it's that the world is too awful and mean for them to have the responsibility of raising children. It just wouldn't be fair.
T-Rav, that's handy to have a liberal translator around. Unfortunately, they've bought into their own obfuscations so they wouldn't recognize their own motives anyway.
ReplyDeleteIMHO the declining fertility rate has little to do with ideology and much to do with the emancipation of women. Its a trend you see in modernizing countries no matter the ideology.
ReplyDeleteWomen having the freedom to do pretty much anything they want is wonderful (I wouldn't have it any other way) but it does make for more women choosing to have fewer kids later in life.
Many women choose to get a degree before marriage and I can't blame them, because if they ever find themselves in a position where they need to work, having a degree is real handy.
Anthony, that's a more than valid opinion. Unfortunately, there is no control to test it. I'm only referring to the reality that a rise in social-welfare correlates with a decline in fertility. Causality is neither here nor there. This is a reality that policymakers must deal with if not necessarily speak to if the social-welfare state is to continue advancing. At the very least, your opinion needs to be validated by a reversal of the birthrate trend in order to support the welfare state.
ReplyDeleteI don't think the two positions here are really contradictory. Anthony's absolutely right that in countries where women have been fully "emancipated" or "liberated" or whatever you want to call it, there is a significant drop in the birth rate (although it's a drawn-out enough process with enough variations that it requires some qualification). There's also clearly a similar correlation with the rise of the welfare state, though I don't think there's a direct causal relationship there (i.e., each phenomenon comes from some third factor).
ReplyDeleteThe point is, all of this is woven, one way or another, into modern liberalism, so that the demography makes it something of a house of cards. Europe has only managed to keep it stable through massive immigration, and that won't last forever. And Russia has had all sorts of outlandish theories on how to keep itself stable population-wise. So this is definitely a question that will continue to pop up.
Just to clarify, when I say Anthony's opinion needs to be validated, I mean for the sake of the welfare state, not for the purposes of entertaining it.
ReplyDeleteI agree that the positions are not contradictory and are actually quite entangled. But at base, I don't think it really matters. The crux of the issue is that social-welfare-ism (to coin an -ism) attempts to reverse the way society must function.
To quote an ancient Greek proverb, "A civilization flourishes when people plant trees under which they will never sit." In other words, each generation must look to the betterment of those who follow. All the 20th c. US social programs, as well as the lone 21st attempt to reverse this by having the younger generation work to benefit the preceding. Since this can only functionally go back a generation or two at most, a society can get away with this for a short while, historically speaking, but it chips away at generational prosperity in each cycle.
Another thought: one might consider the rise of feminism/women's lib with the exchange of paternalism for maternalism.
ReplyDeleteI should point out that in this construction I don't mean characterize maternalism as the beneficent counterpoint to paternalism. Rather, I mean to emphasize the failings of both. Whereas paternalism is marked by restrictiveness, maternalism could be said to be marked by coerciveness.
Sorry, tryanmax--I meant to reply earlier and then got sidetracked. Anyway, I was going to say that you're right, this is a basic perversion. And it is all connected, from a broad point of view--ultimately, it's about shirking one's social responsibilities and demanding that the collective take care of you. So you not only have more reliance on social welfare, you have people choosing to remain childless because raising kids would just be too much of a hassle. The two together can't last long, as you say.
ReplyDeleteOn the paternalism vs. maternalism thing, I think it's well worth remembering Jonah Goldberg's comment in Liberal Fascism that a hug you cannot escape from is just as oppressive as a fist, only in a different way.
T-Rav
ReplyDeleteWhat would the Lee plan do with the Earned Income Credit for children. Currently up until around 30K somewhere I think with one child parent get a 5K credit from the government that usually ends in a refund check as the individual does not owe 5K in taxes. Would that stay in place and the 2,500 add to or would you scrap that at replace it with 2,500 per child.
I know currently it depends on AGI and number of children but I would like the scrap idea as it takes the means testing away from the equation. Since it is a credit it is applied evenly to everyone with the poor still getting the end of year bonus and not realizing the change.
Problem is though that 15% times 2,500 is $37,500 meaning that no one would start paying tax until 37.5 AGI which is more like 45 to 50K in income before deductions. Two children is 75K a year. Seems to high to be practical. But I guess that is not a lot for a two earner household so maybe... dunno
T-Rav, Anthony and Tyranmax
ReplyDeleteThomas Sowell, in a book I cannot remember, outlined a problem they were having in India in the 1950's because the birth rates were too high. birth rate was 4.2 children. The government started handing out condoms and whatever passed for birth control in the 50's as well as started having seminars to talk to people. None of this worked.
Long story short Sowell worked out the incomes of the parents and the children (who worked back then there) and found out that for that average unskilled Indian to break even financially there had to be 4.2 children working to supplement family income.
Food for thought.
Indie, that fits right in with observable trends that national prosperity lowers birth rates. Prosperity also leads to things like child labor laws, minimum wages, and social services. In other words, as the need for children--to generate income--diminishes, so does the supply. In a prosperous nation, a child costs more than it generates. Another justification for a child tax credit.
ReplyDeleteThis has potential to be the driver of a virtuous cycle because if prosperity increases faster than population, or if population decreases, then each individual gets a larger and larger piece of a growing pie. But only if people rely on their own slice. When people start relying on the next guy's slice even as he is still relying on it, all sorts of distortions occur. It doesn't necessarily stymie growth--at least not directly--but it does encourage social loafing on an intergenerational scale.