What you don’t know can hurt you

The devil is loose in the details. Today, there is an opinion editorial in the Wall Street Journal by Georgetown University School of Law’s constitutional expert, Randy Barnett. Professor Barnett links the tea parties that took place all over the country last week to a need to wind back federal power. In it, he suggests we should

eliminate the federal income tax, after five years, in favor of a national sales or excise tax.

It is an interesting argument, but ultimately one that might prove as muddled as the Tea Parties last week.

As with all changes to the tax code, we must identify who are the winners and who are the losers. So much of our taxation system is a coercive one – encouraging us to do certain things (for which we receive deductions and lower taxes), while punishing us for doing other things (such as extra ‘sin’ taxes on the purchase of cigarettes, alcohol, motor boats, etc.)

Then, with a national sales or excise tax we need to ask to whom this would apply. Will everyone, under all circumstances, pay the same sales tax on all items? As onerous as I find a sales tax on the essentials of life (food, water, clothes, etc.) I don’t think those will be as controversial as some others.

How about a sales or excise tax on the purchase of a house? In many countries this can add tens of thousands of dollars to the cost of a place to live. The affordable housing crowd aren’t likely to endorse that.

Can you imagine a sales tax that businesses must pay on every item they purchase? Maybe on office supplies and the office furniture, but I can hear squawks about adding six percent to the cost of large machinery such as a grain harvester or a printing press. All those taxes would, of course, be passed on to the purchaser who would, then, pay a sales tax!

If you exclude businesses from paying a sales or excise tax, then I suspect we will all suddenly develop an entrepreneurial spirit and get business credit cards to use with all our purchases. Perhaps we would no longer own our own homes but rent them from some trust or corporation set up to hold the property on our behalf!

What about hospitals, our churches and other non-profits? Many don’t pay corporate taxes today (since they don’t make a profit), so this would be a direct hit to our health care system, our charities, and the many other groups that are having a particularly hard time in today’s economic climate.

Would foreign countries buying missiles, tanks and other military hardware from U.S. companies, or would we see all those companies suddenly become offshore entities (headquartered in the Bahamas, perhaps?)

And, lastly, would state and local governments be exempt from these sales and excise taxes? Or would they have to raise the income and property taxes in their state to now fund the activities of the federal government?

The more you think about it, the sillier this proposal becomes. Yes, the devil is in the details and until we know them, the better the devil we know than the devil you don’t!

(edited April 24) Our own constitutional expert, Professor Natelson, weighs in with an endorsement of Barnett, as “a staunch friend of freedom”, here.

Socialism Revisited

I know I posted about this a few days ago, but I’ve heard so many people wrongly describe Obama as a socialist with no actual knowledge about what socialism is that I felt it important to revisit the issue.

Let’s be clear: The tax policy that Obama proposes is NOT socialism. Socialism is defined as government ownership of the means of production. Obama does not propose this in any way, shape, or form.

But let’s talk about redistributing wealth. Our country has had a progressive tax policy – where the more you make, the more you pay – ever since the New Deal. Reagan was a big proponent of this and furtherd the progressivity of our tax policy. The only truly democratic, non-redistributionist tax policy would be a flat tax policy. And in order to implement such a policy without reducing tax revenues, we would have to double the taxes of most Americans to 30%.

Obama is simply talking about letting the Bush tax cuts expire, which would mean that the highest tax bracket would raise from 36% to 39%. That’s a 3% increase in one tax bracket. And the McCain campaign calls this socialism. It is not. It is merely bringing tax levels back to where they were in the 1990s, the decade in which we saw the largest economic expansion in American history and the bolstering of the middle class. Was our country socialist in the 1990s? No. Obama is not proposing tax levels that have never before been seen.

Finally, Republicans like to wax poetic about how the only way to improve the economy is to lower taxes. Let’s look at the record. We have had the lowest tax levels ever in our country during the last 8 years, and our economy is in the toilet. During the 8 years prior to the Bush tax cuts, taxes were at a slightly higher level, and we saw the largest economic expansion of our time. Raising taxes on the wealthiest 2% of earners does not limit or hinder economic growth. Giving larger tax cuts to the middle class, who spends more than the wealthiest 2%, while making up for that lost income by taking 3% more from the wealthiest Americans spurs growth. Cutting taxes for the wealthiest Americans does not spur the growth of the middle class, which is the backbone of our country.

But some animals are more equal than others

Electoral College 101.  Not every vote counts, and not every vote is worth the same as every other vote.  Funny system, what?

We all learnt in civics class that the Electoral College divvies up votes by state.  Each of the 50 (and Washington DC) gets an elector for every Senator and every Congressperson,  with a winner-take-all in most states.  So, just like in 2000 (and in 1876 and in 1888), the candidate with the most votes doesn’t necessarily win.    Some votes are just more important than others.

For those of us in states with smaller populations, such as Montana, this is often portrayed as a good thing.  Candidates campaign here (even if we are still awaiting McCain or Palin …) It also makes the need for a recount limited only to those states where the count was close, thus saving us poorer states money.

Under the electoral college system, any swing state becomes important.  Interestingly, it doesn’t matter how many vote in those swing states as long as more people vote for your favorite candidate than for the opponent. Which might explain the tactics to squelch people from the voter roles, particularly in regions not predicted to support their candidate.

If you live in a non-swing state (such as New York or Utah?), then you might be forgiven for thinking your vote doesn’t count.  You’d be right.  Once a plurality has been achieved in that state, then the other votes for that candidate don’t count.   Win by one vote or win by a million, it’s all the same.

The Unitary Executive

In tonight’s debate, Palin said that she would like to expand the powers of the VP beyond what Cheney has done. (Lord help us all!) This theory is known as the unitary executive theory. Under this theory, the president’s authority when acting as commander-in-chief or when making foreign policy cannot be reviewed by the judiciary or checked by Congress.

President Bush and Vice President Cheney have drawn heavily on this idea during their time in office to abandon the rule of law. Bush frequently and continually stresses his role as commander-in-chief in the war on terror. When added to the idea that we have entered a perpetual state of war (as a war on terror is so vague that it could, foreseeably, last forever), the implications of this theory stretch as far into the future as we can imagine.

Bush and Cheney have co-opted the judicial branch by appointing judges (Alito and Roberts) who are largely deferential to the executive branch’s exercise of power and by their support of assaults on the independence of the third branch.

Bush has emasculated the legislative branch by issuing over 1000 “signing statements” (signed during the signing of a bill into law) that basically say he will not uphold or abide by certain parts of the law that he finds unacceptable. Signing statements have served primarily a ceremonial function throughout US history. They often extol the virtues of the legislation and thank those figures responsible for the enactment. Sometimes they include passages in which the president raises constitutional concerns with some provisions of the new law. What presidents have always avoided is delineating those provisions that the president simply disagrees with and announcing the president will not comply with them. Obviously, such a device would be unconstitutional on its face.

But this is exactly what Bush has done. He has signed over 1000 signing statements during his time in office – more than any other president combined. Bill Clinton only signed 140 signing statements, and he was working with an adversarial, Republican controlled Congress for the majority of his presidency. Bush worked with a docile and supportive Congress for his first six years in office.

An example of Bush’s disdain for the rule of law: After the atrocities at Abu Ghraib, several Republican senators sponsored a bill that outlawed torture. It passed with an overwhelming bipartisan majority. Bush could’ve vetoed the law, but Congress almost certainly would’ve overridden the veto. Instead, he signed it into law but announced that he did not, and would not, have to abide by it. No wonder he has only vetoed one bill during his time in office. Why bother when you can just pick and choose which parts of the law you’ll abide by and those you won’t?

These disturbing actions by the current administration pose serious threats to our democracy and the rule of law. In the debate tonight, we heard Joe Biden describe Cheney’s expansion of the VP’s powers as exerting the authority of a unitary executive. He described this expansion as extremely dangerous and said that it would stop (and, implicity, that the rule of law would be restored) in an Obama-Biden administration. Palin, on the other hand, said she applauded the way Cheney has expanded the role of the VP and would work to further expand the role of the VP in a McCain-Palin administration. This is completely blasphemous to everything our founders worked for when writing our constitution and forming our government, and it cannot be allowed to continue.