Two More Debt Ceiling Facepalms

1.  If one didn't know any better, one might conclude that our elected officials don't care whatsoever about the American people.  I know it may sound shocking, but I have this sneaking suspicion.  As evidence, I give you this Washington Post-ABC poll which asked people, among other things, if they would oppose or support certain items in an effort to reduce the national debt.  Here's a summary:

Cut spending on Medicaid:  26% support, 72% oppose

Cut military spending:  43% support, 56% oppose

Raising taxes on Americans earning over $250,000 a year:  72% support, 27% oppose

Gradually raising Medicare age from 65 to 67:  46% support, 54% oppose

Changing the way SS benefits are calculated so they increase slower:  42% support, 53% oppose

Raising taxes on oil and gas companies:  59% support, 39% oppose

Means testing Medicare:  61% support, 36% oppose

Removing SS tax income cap currently at $107,000:  66% support, 33% oppose

Raising taxes on hedge fund managers (essentially changing capital gains taxes to income taxes):  64% support, 25% oppose

In sum, Americans support raising taxes on the wealthy and corporations to match recent historical levels and only making very small changes to Medicare, Medicaid, and Social Security (such as means-testing, which I'm okay with) to help fix the national debt problem.  The only quibble I personally have with the majority of Americans is that I think military spending needs to be cut dramatically.

Yet, in the debt ceiling negotiations in Washington the exact opposite is being considered.  Tax increases for the wealthy and corporations are off the table and big changes to Medicare, Medicaid, and Social Security are a near certainty.  Up is down, left is right, sane is insanity, and what the American people want is irrelevant.

2.  The House recently passed their pie-in-the-sky Cut, Cap, and Balance bill.  The bill was so draconian that it had no chance, absolutely zero chance, of passing the Senate or not being vetoed by the President.  It was a waste of time and Harry Reid, bless his soul, called it "some of the worst legislation in the history of this country." the worst piece of legislation every passed by the House.

It worked by first making massive cuts to government spending starting next year and going into the future.  Second, it capped government spending at around 18% of GDP per year and required 2/3 vote in Congress to ever raise taxes.  Third, it required the passage of a balanced budget amendment to the Constitution before the debt ceiling was raised.

All three of those ideas are bad.  The first because the cuts come at the expense of the poor and elderly almost exclusively.  The second because it gives no flexibility to respond to crises like the one from which we are still recovering.  The third because it gives even less flexibility than the second and degrades the beauty of our Constitution.  It would ruin our economy, I have no doubts about that.

It was, then, seen as a way for the please-don't-compare-yourselves-to-the-real-Tea-Party Congresspersons to show their ultra-conservative chops.  It was a political stunt, nothing more and nothing less.  They knew it didn't have a chance for passage because it was so conservative, they knew it was just to satisfy their base.

But the Republicans control the House and it is their right to pass whatever they want.  I think it is a dangerous bill and a waste of time when we are so close to an economic meltdown, but they've earned the right to be irresponsible I guess by winning elections and anyway everyone knew it never had any chance to become law.  So it is not the mere passage of the bill that I consider a facepalm.

What really bothers me is that Utah Democrat Jim Matheson voted for it.  JIM MATHESON VOTED FOR CUT, CAP, AND BALANCE!  Are your *&%#^@ kidding me?  Even all of his Blue Dog Conservative Democrat associates called it a horrible bill just meant to give ultra-conservatives a message vote.  I would rather, much much rather, have a Republican in that seat than Matheson.  He's an embarrassment.  He is the worst Congressperson in the country.  I hope the state legislature redistricts him right out of office, I really do.

The Debt Ceiling Drama Makes Everyone Look Incompetent

The debt ceiling stuff makes me sick to my stomach.  Despite the fact that the warnings about default are clear and dire, our elected leaders seem to be only interested in political showmanship and not actually solving the problem.

On the one hand you have the Republicans who are the party much more responsible for our unwieldy debt, refusing to raise the debt ceiling unless all of their suddenly austere measures are met without any inkling of desire to compromise on any issue.  They are the major cause of the problem, are completely hypocritical about government debt and size now that they believe it is politically advantageous, and are unwilling to negotiate like responsible adults to avoid the catastrophe they precipitated.  They are more interested, it seems, in pleasing their corporate overlords than doing what is right for the American people.  Here is one graph, among many many many, that illustrates the level to which Republicans are at fault for the debt:

From the New York Times

On the other hand you have the Democrats who seem to only care about reelection, not solving problems, caving on almost every issue because they think the more they move to the right the more electable they will become.  Every time they make a move towards a compromise, without anything offered in return, the Republicans pull the chair out from under them and move it a little further to the right.  The Democrats get up, brush themselves off, offer fresh cuts to Social Security or offer trillions in cuts without any increases in revenue (e.g. raising taxes on the wealthy), without any compromises from Republicans in return, and go to sit back down again only to come crashing to the ground as the chair is pulled out from under them yet again.  Too stupid to learn, I guess.

Meanwhile, the public is overwhelmingly in favor of raising taxes on the rich; closing huge tax loopholes for corporations; keeping Social Security, Medicare, and Medicaid intact; and raising the debt ceiling to avoid another economic downturn.  Somehow the Democrats have turned all that into a losing hand and seem destined to weaken the liberal legacy in return for some non-existent political victory.

I am all for big cuts in spending in order to get the debt under control.  I'm all for cutting out some of the enormous amount of fat in government.  But it has to be done responsibly, and that means raising taxes on the rich and corporations and not gutting the social safety net for millions of poor and elderly Americans.  It mostly means doing everything we can to make the economy strong again, which hinges mostly on creating local and sustainable jobs for average Americans and not showering the wealthy and corporations with more tax breaks and kickbacks.

No one wins no matter what happens in the next few days.  What a miserable time to be a political partisan.

Nearly Half of Americans Aren't Paying Income Taxes: Bad But Maybe Not in the Way You Suppose

It has recently exploded all over the internet that nearly half of American households do not pay income taxes.  There are enough deductions and credits for families making around $50,000 and less to avoid the income tax completely, though they still are paying federal payroll taxes, sales taxes, property taxes, and others.

While some see this as a broken tax system, I see it as a broken economy.  While some gripe that half of Americans aren't pulling their weight, I see it as nearly half of Americans are not making enough money to pay income taxes.  They live below the line where we have decided that a person is only making enough to cover basic expenses and should not bear the weight of income taxes on top of it.  Instead of trying to figure out how to get those people to start paying income taxes at their current salary, lets instead focus on how to get these people making enough money to be able to afford taxes after their basic needs are met.

If we want to broaden the tax base, and I agree that that should be one of our goals, we need to narrow the gap of income inequality.  We are more free as a nation, and have increased agency as individuals, when the wealth and income gap is narrow.  That is perhaps part of why the Lord said, "For if ye are not equal in earthly things ye cannot be equal in obtaining heavenly things."  Here is a site, called Business Insider, with all the charts you will ever need to help understand just how serious an issue this is.  Here is an example:

State of the Union Highlights

I was at scouts last night and couldn't watch the State of the Union Address, but as I've browsed through it there are several items that I believe are worth highlighting.  The theme was Win the Future, which I guess is the new Hope and Change.  In both cases, President Obama wants to exude optimism, which is something, as I've said before, we dearly lack around here.  So with optimism in mind, here are a few things worth looking at.

As some of you know, I'm a proud and moralistic environmentalist, so I appreciated the renewed emphasis on renewable energy:

Already, we're seeing the promise of renewable energy. Robert and Gary Allen are brothers who run a small Michigan roofing company. After September 11th, they volunteered their best roofers to help repair the Pentagon. But half of their factory went unused, and the recession hit them hard. Today, with the help of a government loan, that empty space is being used to manufacture solar shingles that are being sold all across the country. In Robert's words, "We reinvented ourselves."

That's what Americans have done for over 200 years: reinvented ourselves. And to spur on more success stories like the Allen Brothers, we've begun to reinvent our energy policy. We're not just handing out money. We're issuing a challenge. We're telling America's scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we'll fund the Apollo projects of our time.

At the California Institute of Technology, they're developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they're using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015.

We need to get behind this innovation. And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if — I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's.

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they're selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America's electricity will come from clean energy sources.

Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all — and I urge Democrats and Republicans to work together to make it happen.

First, there is almost nothing so offensive, in my mind, as the billions of dollars in tax relief that we give to oil companies.  Those should end immediately.  Second, I've been contemplating a post about the world's population crisis, and one of the most important points in that discussion is energy.  Where are the billions of people we are going to be adding to our world's population going to get their energy?  How can we add billions more people to the Earth and not completely destroy the environment in the search for and consumption of cheap energy?  Renewable energy, of course, is the answer, and the longer we wait to make the President's goal a reality the harder it will be.  We simply have no choice but to invest aggressively in renewable energies.  And it will be good for our economy in the long-term, as well.

As to education, and to allay concerns that liberals are masked communists who want to destroy the family:

That responsibility begins not in our classrooms, but in our homes and communities. It's family that first instills the love of learning in a child. Only parents can make sure the TV is turned off and homework gets done. We need to teach our kids that it's not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair. We need to teach them that success is not a function of fame or PR, but of hard work and discipline.

As a parent of children who are starting to make their way through school, I simply could not agree more that the most important factor in determining whether our schools are successful is the efforts of the home.  We wouldn't be talking about failing schools and teachers if families bore more of the burden and responsibility of education.  That is nearly impossible, however, when parents are facing foreclosure, unemployment, insurmountable medical bills, neighborhood violence, and the like, and where the stresses of oppressive poverty crowd out most other concerns.  The stability of the family is one reason why it is so important to build and maintain a robust social safety net.

Finally, one point that I wish was hit more forcefully.  When the president spoke about reducing the deficit he spent quite a bit of time talking about reducing non-discretionary domestic spending, which he acknowledged made up only 12% of the nation's budget.  Then he blithely stated, concerning the deficit commission:

And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it — in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.

I believe I've linked to this before, but take a look at the a visualization of the budget found at the New York Times.  What jumps out immediately?  National Security and Social Security.  Those are certainly worthy of a lot of money, and we talk all the time about ways to control Social Security costs.  What we never talk about is controlling National Security costs.  It is virtually unheard of for a politician to seriously suggest bringing defense spending down in any meaningful way, which is a travesty.  Here are an assortment of charts to help put our military spending in context

From the Center for Arms Control:

From Think Progress:

From the Daily Mail:

If we want to seriously get the budget under control, we should cut defense spending, which is filled with corruptions, special interests, and waste.  Pres. Eisenhower correctly predicted this in his farewell speech where he warned:

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

I thought the State of Union was good.  I think it had the right tone and struck the right balance between government waste and government investment.  A focus on families, peace, and renewable energy, among other things, is the kind of liberalism I support.

Progressive Taxation

A recent poll showed that over 60 percent of Americans think that the government should tax the rich in an effort to reduce the budget deficit.  Polls also consistently found that a majority of Americans wanted the Bush-era tax cuts for the wealthy to expire.  Conservatives, inexplicably, won that battle in their larger war against progressive taxation.

So with all the recent talk about taxes, I wanted to try to explain why liberals, and a majority of Americans generally, support a progressive tax scheme.  A progressive tax is one where the tax rate increases with taxable income.  So a person making a smaller salary pays a smaller percentage in taxes than a person making a larger salary.  Currently in the US, we have a progressive federal income tax that ranges from 10% for the lowest income earners to 35% for the highest marginal rates.

Mainstream conservatives typically oppose a progressive tax for moral reasons.  They argue that it is unfair to tax the wealthy at higher rates just because they have a lot of money, that it is a form of class welfare, that the poor are getting off easy, and that it disincentivizes hard work.  These arguments miss the point.
As a starting point, let's look at tithing, which is a conservative's dream flat rate of 10% for all.  Tithing is nothing like taxation, of course, and an analogy between the two is fundamentally flawed for that reason.  Tithing is a spiritual commandment, and is a matter of faith, unlike taxes which are a matter of public policy.  But it provides a nice, simple example of what I want to talk about.

Lets say there are two people, Person X makes $1,000 per month and Person Y makes $10,000 per month.  If they both pay 10% tithing, X pays $100 and Y pays $1,000.  It is tempting to say that since X and Y pay the same rate it is equally difficult or easy for them to pay, that their burden is equal.  That, however, would be wrong.  X makes very little money and thus a higher percentage, probably approaching 100%, of her income goes towards needs like rent, food, clothing, utilities, etc.  X's tithing check comes at the expense of items she needs, but will sacrifice nonetheless.  Y's 10%, on the other hand, will come almost exclusively from money she was going to use for savings, luxuries, and non-necessities.  It is much harder for X to pay 10% than for Y.

Tithing, then, in my opinion, is disproportionally more beneficial to the poor who gain greater blessings because it is a greater sacrifice.  The wealthy, again in my opinion, had better seriously step up in fast offerings if they want similar blessings, because the more wealthy a person is the easier the law of tithing becomes to keep.  There are plenty of scriptures that warn the wealthy that their wealth is a hindrance to their righteousness, and I think tithing was specifically set up to test how generous the wealthy will be with their money beyond the strict minimum required by tithing.

So for taxation, you can see why a progressive scheme is favored by liberals.  For another example, say that the we all agree that a nation of three people, for simplicity, needs $10,000 for its government to function properly.  Three people, A, B, and C, make $10,000, $30,000, and $60,000 per month respectively.  How should the tax burden be divided?  If there was a flat rate of 10%, A would pay $1,000, B $3,000, and C $6,000 and they'd get there.  But, again, this is actually a disproportionate burden on A who makes less and has a much more difficult time making ends meet under this scheme than B or, especially, C.  In this situation A actually has a higher tax burden.  A progressive tax of 5%, 10%, and 11% evens out those burdens.  You'll see that A had her tax burden cut in half and to make up for it C only had an increase of one percent.  This is more fair to everyone.

There are, of course, other reasons to support a progressive tax system.  The wealthy have increased access to influence and power, and thus more ability to shape public policy to their benefit at the expense of the poor.  Progressive taxation can even out that inequality.  There is also a persuasive argument that the wealthy receive greater benefits from the government, such as the protection of property rights, defense and security, infrastructure, and market regulation, than the poor and thus should shoulder a greater tax burden to support societal order.  Wikipedia has a nice rundown of the pro and con arguments.

What is overstated is the amount of animosity and hatred felt towards the wealthy, and the use of progressive taxation to punish them.  Some people no doubt feel this way, but the best and most useful arguments for progressive taxation do not rely on emotions or retribution.  Progressive taxation is a sound rational policy.

In fact, despite all of the hand-wringing about raising rates on the wealthy and the detrimental effect it will have on the economy, this is the least progressive tax system we've had since the Great Depression.  Throughout the steady economic growth of the 40s, 50s, 60s, 70s, and 80s the marginal tax rates were typically in the 70-90% range, instead of the 35% we have now.  During the Reagan era the top marginal rates were around 50%.  Here's a chart I think I've probably posted before from that link above.

Pres. Obama and Congress were wrong, from a public policy standpoint, to extend the Bush tax cuts for the wealthy.  In two years the best thing to do for the country would be to let them expire and properly redistribute the tax burden.  The tax system in America needs to be vastly simplified and more progressive.  I don't want to necessarily go back to a 90% marginal rate, but we've certainly gone too far in the other direction.

Rant Time: Pres. Obama is No Liberal

And he's certainly no socialist, despite the popular conservative argument otherwise.  Here's what we have seen so far:

1. He gave away the public option before the debate even began.  Health care reform ended up being a huge win for the health care industry which will soon be flooded with new customers thanks to the mandate.
2. The stimulus was too small and included too many tax cuts for corporations at the Republicans' behest.
3. He has failed to follow up on, pursue, and prosecute Bush Administration illegal activities such as torture and illegal wiretapping.
4. The war in Afghanistan, which pretty much everyone agrees we can't "win" militarily, has been escalated instead of ended.
5. The financial reform bill was watered down in the face of the powerful financial lobby to the point of likely being completely ineffectual to prevent the sort of the economic meltdown we are currently working our way out of, over two years later and with no end in sight.
6. He is now backing down from his stance of letting the tax cuts for the super-wealthy expire and extending the tax cuts for the vast majority of Americans permanently.
7. And now, reports are that the administration is stepping up covert attacks in Yemen.

What makes these items so infuriating for liberals is that public polling shows that Americans supported the liberal position in nearly ever single one of this issues.  Americans wanted a public option, at the time a big stimulus was popular to drag us out of the recession.  Americans hate torture and our Middle Eastern wars.  Americans wanted tough new regulations for Wall Street to avoid another economic meltdown.  Americans want the tax cuts for the wealthy to expire.  They want Pres. Obama to deliver on his promises, but he appears to be politically gutless.  I can't think of an issue where he has drawn a line in the sand and stood up for what he believes is best for America.

Compromise is inevitable, of course, and I'm glad we have a president who is willing to compromise to get things done.  The problem is he never seems to compromise from a position of strength and vigor.  When he was elected America had given Democrats complete control of the government because they didn't like where Republicans were taking them.  Instead of taking that mandate and arguing with strong voices for the policies that got them elected, Democrats capitulated and seems to retreat at every possible occasion.  As Pres. Obama is the leader of the Democratic party it was up to him to set the agenda and the tone.  He has so far failed.

I don't expect or even necessarily want a victory on every major point above, but certainly a few victories would be encouraging for liberals.  A few moments of inspiring leadership would be much appreciated.  A mere occasional reason to gloat wouldn't be the worst thing on earth.  If the President and Democrats had managed just a couple big wins in those issues they may have had a base that was more energized for the election and more willing to work hard to defeat the tea party surge.  But since there does not seem to be either 1) any real and deeply-held liberal convictions by Democrats or, worse, 2) any real difference between the two parties and thus no real choice, liberals largely stayed home on election day.

Pres. Obama has two more years to show some real leadership, but I'm not convinced he has it in him.  And I know Congressional Democrats don't.  The liberal renaissance we thought was coming in 2006 and 2008 has flatlined.

Ending the Bush Tax Cuts for the Wealthy

The Bush tax cuts are set to expire at the beginning of the year and the bombs are starting to fall in the political war over this issue.  Democrats want to let them expire for those making over $250,000 while extending them for everyone else.  Republicans want to extend them for everyone.  So, essentially, the argument is whether or not to extend the tax cuts for the very wealthy.  The two top marginal tax rates would go from 33% and 35% to 36% and 39.6%, respectively.

A second area of disagreement also has to do with taxing the wealthy, this time in the form of capital gains, which are disproportionally slanted towards the rich.  Those rates would go from 15% to 20%, and eventually to 23.8%.

Read up on the issues from both sides here, here, here, and here.  Another excellent resource is the Center on Budget and Policy Priorities, which lays out the argument for how letting the tax cuts expire for the wealthy and extending them for everyone else will reduce the deficit ($300 billion per year), almost universally benefit small businesses, and spur the economy and job growth.

 President Obama has come out forcefully with a plan to allow the tax cuts to expire for the wealthy and to extend them for the poor.  Here is the best and simplest argument I've seen for his plan, from Salon:

Not only did the wealthiest Americans benefit the most from the anything goes Wall Street boom years, but they paid the smallest price for the economic collapse. While millions of Americans lost their jobs and their homes, they sailed right through. By calling for the repeal of the Bush tax cuts for the wealthy, Obama is putting down a political marker, and declaring that the rich must pay their fair share of the burden. Here's a message anyone can understand: I'm going to raise taxes on the rich and spend money directly creating jobs through infrastructure investments.

Remember, even with the expiration of the tax cuts for the wealthy they will be paying a lower tax rate than during the Reagan years, so save the cries of socialism.  This country became great because of the work of the lower and middle classes.  If we want to regain some of that greatness we have to secure them first by creating jobs and opportunities for them, and this move is a way to do that.  We've covered this issue a little bit before here.

Over the past 30 years, however, after decades of convergence in income distribution, the gap between the rich and poor is getting bigger and bigger.  That means America is less free because those poor have fewer and fewer meaningful opportunities to make their lives, and the lives of their families, better.  It also means America is much less righteous.  That might seem like a statement out of crazy land, but look at these principles from the Book of Mormon:

2 Nephi 9:30 - But wo unto the rich, who are rich as to the things of the world. For because they are rich they despise the poor, and they persecute the meek, and their hearts are upon their treasures; wherefore, their treasure is their god. And behold, their treasure shall perish with them also.

2 Nephi 9:42 -  And whoso knocketh, to him will he open; and the wise, and the learned, and they that are rich, who are puffed up because of their learning, and their wisdom, and their riches—yea, they are they whom he despiseth; and save they shall cast these things away, and consider themselves fools before God, and come down in the depths of humility, he will not open unto them.

Jacob 2:13-14 - And the hand of providence hath smiled upon you most pleasingly, that you have obtained many riches; and because some of you have obtained more abundantly than that of your brethren ye are ^alifted up in the pride of your hearts, and wear stiff necks and high heads because of the costliness of your apparel, and persecute your brethren because ye suppose that ye are better than they.  And now, my brethren, do ye suppose that God justifieth you in this thing? Behold, I say unto you, Nay. But he condemneth you, and if ye persist in these things his judgments must speedily come unto you.

Helaman 6:17 - For behold, the Lord had blessed them so long with the riches of the world that they had not been stirred up to anger, to wars, nor to bloodshed; therefore they began to set their hearts upon their riches; yea, they began to seek to get gain that they might be lifted up one above another; therefore they began to commit secret murders, and to rob and to plunder, that they might get gain.

3 Nephi 6:10-12 -  But it came to pass in the *twenty and ninth year there began to be some disputings among the people; and some were lifted up unto pride and boasting because of their exceedingly great riches, yea, even unto great persecutions; For there were many merchants in the land, and also many lawyers, and many officers.  And the people began to be distinguished by ranks, according to their riches and their chances for learning; yea, some were ignorant because of their poverty, and others did receive great  learning because of their riches.

There are many, many others just like this.  One of the overarching themes of the Book of Mormon is that when a society becomes stratified between the rich and the poor, the rich will become prideful and wicked and push the poor down further and further until they are ripe for destruction.  This is where we are inevitably headed unless we make the decision, as a society collectively, to narrow that gap voluntarily.  Extending the Bush tax cuts for the poor and letting them expire for the wealthy is a step in the right direction.

Lets Take the Government Spending Rhetoric Down a Notch

In the wake of the recent Tea Party Convention, I infiltrated the Tea Party Nation website by obtaining a username and password. My life may or may not be in danger if I am found. You have to be a member to poke around and see what they are up to. I've made my feelings known before, and I renew those sentiments now, that I will not sully the good name of the original Boston Tea Party with this movement. I fully support the current government protesters' right to organize and protest, but don't equate it with the original Boston Tea Party, they are not similar.

One of the things that I don't understand about the government protesters is how they were overwhelmingly likely to support huge government expenditures to rebuild a foreign, non-threatening nation, but protest like mad against government expenditures to rebuilt our own nation in the worst economic collapse since the Great Depression. The Iraq War has now cost over $700 billion, with much of the cost deferred to where the total cost will end up in the trillions. And yet when a similar amount is spent by our government to shore up the financial system, assist the millions that have lost their jobs, and spur new growth, Sarah Palin has to show up and read off her hand that government is destroying our liberties.

It may surprise you to learn, though, that I am concerned about the spending and debt of the federal government. I don't think this is an ideological concern, I think most Americans are at least uncomfortable with our national debt. Some Americans are downright angry about it, which I don't understand, but I think it is important to understand the problem and react appropriately. Unfortunately, the government protesters, with all the vitriol and hyperbole, have made it difficult to discuss the issue intelligently.

And as far as I'm concerned, here is the problem: Americans don't want to pay for what we demand. As a result, politicians from both parties promise the benefits of government without requiring the requisite sacrifices from the public. This is no shocking revelation, of course, but consider the following facts, taken from a Washington Post article from last year:

• The average family pays only nine percent of its income to taxes (down significantly from previous decades).
• The middle fifth of taxpayers pay only three percent of their income to taxes (again, down significantly).
• A majority of Americans considers their tax burden either too low or about right.
• About a third of all taxpayers pay no taxes at all (excluding Social Security and Medicare).

Here is a nifty image from wikipedia which shows the marginal income tax rate over the years, demonstrating that it is about at its lowest since the years leading up to the Great Depression.

Also note that, contrary to popular belief, corporations in America actually pay less taxes than in the average developed country (average 16.1%, US 13.4%), largely due a graduated tax rate and generous business deductions.

I am among the many Americans that want health care insurance for all Americans, programs to help low and middle income Americans pay for college, Social Security for low income retirees, a safety net for the poor that cannot find any work or cannot find work that pays for the basic necessities of life, etc. I'm a liberal, therefore I want programs that help level the playing field. That is not to say that everyone should make the same amount of money or that we should pay for people to be lazy, but that everyone should have equal opportunity to get ahead if they so desire.

Remember, as we've pointed out here many times in the past, only a very small, minuscule fraction of Americans are intentionally lazy and living off the government for years on end. Most Americans are hard-working and have self-respect and pride, and try their best to survive on their own. But the system (i.e. market) is set up for poor people to become more poor, no matter how hard-working or talented they are, and for the rich to become more rich, no matter how lazy and incompetent they are. The rags to riches story is a heart-warming exception to the rule. So we turn to the government to make some new rules which are more equitable.

But we stopped paying for it. We give corporations huge tax breaks and promise the middle and upper classes lower and lower taxes until they are hardly paying any at all. And then we borrow money to pay for the things we want. So we have two choices to lower the debt: we eliminate those playing-field-leveling programs or we require more taxes from Americans.

Liberals and conservatives alike can agree that we should require more accountability and efficiency from the federal government. Pres. Obama has said that he is going through the government now and looking for ineffective programs to eliminate, and I hope that this is true. There should absolutely be pressure on him, once the economy is righted, to balance the budget and eliminate waste, like Pres. Clinton did. But Pres. Obama is right that we first have to stabilize the economy, and that requires spending. Then, in prosperous economic times we should have every expectation that government will scale back its spending, again, like what Pres. Clinton did.

We shouldn't let the government protesters hijack a meaningful and important conversation about government spending and deficits by injecting vitriol and absurd arguments about how government spending equals a lack of personal liberties. Everyone can agree that fiscal responsibility is best in the long term, but right now is the time for the government to build our country up again after a terrible economic disaster. If we are committed to doing it in Iraq and Afghanistan, we should be committed to doing it in America.

Liberalism and Agency

Of all the reasons given for why a person can't be a good Mormon and liberal, the one used most often is that liberalism takes away free agency. This is the one conservative Mormon activists tend to favor. I attempted to refute this argument in my post "Agency and Democracy," wherein I argued that as long as we live in a democracy where we are allowed to vote, we retain our agency. I also pointed out that conservatives have taken a lot of my money and used it for things with which I disagreed, such as torture, the Iraq War, illegal wiretaps, and tax cuts for the wealthy, thereby highlighting the hypocrisy of this accusation.

I continue to encounter the liberals-as-anti-agency accusation, though, and so have thought a little more about it and want to take a different angle. The conservative Mormon activist argument, by the way, is that liberals want to take away our agency by raising taxes to pay for government programs. The person, then, has less agency because she has less money in the bank.

This argument says way more about the conservatives that put it forward than the liberals they are accusing. What it says is that they only think of agency in economic terms, whereas the idea of agency in scriptures and religion is in entirely clothed moral terms. Our eternal progress is dependent on our using our agency to make good decisions morally, not good decisions with our temporal wealth. Do we treat our families well? Do we honor our covenants? Do we live Christ-like lives? The use of our agency in these important areas has nothing to do with taxes, government regulation, or any other temporal, man-made, economic consideration.

Under a system where capitalism is regulated in order to level the playing field just enough to get people out of poverty and have health security, we are still able to exercise our agency completely, fully, unfettered. We are still able to make those most important decisions that will enable us to receive the gift of eternal life.

To suggest that liberals deprive individuals of the full range of their free agency based purely on economic motives reveals, in my mind, a fundamental misunderstanding of the principle of agency and the very purpose of this life. It is time we (including myself, of course) spent less time worried about our money and temporal possessions and more time worried about living Christ-centered lives.

I have no problem with an argument about taxes, social programs, and government regulation in terms of public policy, there is legitimate room for debate there, but I cannot see merit in opposing liberal ideology in terms of deprivation of free agency.

A National Sales Tax

I tend to keep out of tax reform debates because, frankly, I'm not smart enough to keep pace. I used to brag about how I haven't taken a math class since high school, but now that my kids are getting to be school-aged I am beginning to fret about when, exactly, they will surpass me. I'm thinking I have until junior high before I have to start learning (or re-learning) along with them to help out with homework.

So I'd heard of the proposal for a national sales tax, but didn't think too much about it, until I recently heard it boiled down to this: "We should tax consumption, not productivity." Stated that way, it seemed incredibly sensible to me, so I decided to dig a little deeper. You can play along by Googling consumption tax or national sales tax.

Basically, because that's the way my mind has to work in this area, a national sales tax would eliminate the income tax, so you would get the full amount of money you earn, and replace it with a tax on new goods and services purchased.

One of my pet peeves with our society is how consumption-oriented it is. We have to have the bigger house (with higher energy bills), we have to buy the bigger car (with lower fuel efficiency), we feel like our self-worth is measured by possessions and owning more and more. Wouldn't we be better off learning how to live more efficiently and focusing more on the simple pleasures of life? And even though I am a liberal and, as the stereotype goes, love big government, I think we all would love a more efficient government.

A national sales tax would seem to be a step toward both. First, it would likely encourage saving and investment over consumption. Here are some quotes from modern-day prophets on staying out of debt and living within our means:

President Heber J. Grant: “From my earliest recollections, from the days of Brigham Young until now, I have listened to men standing in the pulpit . . . urging the people not to run into debt; and I believe that the great majority of all our troubles today is caused through the failure to carry out that counsel.”

President Ezra Taft Benson: “Do not leave yourself or your family unprotected against financial storms. . . Build up savings.”

President Harold B. Lee: “Not only should we teach men to get out of debt but we should teach them likewise to stay out of debt.”

President Gordon B. Hinckley: “Many of our people are living on the very edge of their incomes. In fact, some are living on borrowings. . . I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage.”

Americans, as a whole, spend more than they earn. Bankruptcies continue to climb. Very few people had created a safety-net for the current economic crisis (which I have heard many refer to as the Great Recession). A tax on consumption (ranging anywhere from 15-30%, usually pegged at about 23%) might encourage more savings, thus creating a more stable society and economy. It would also encourage investment, leading to greater capitalization of business. Increased savings would reduce stress, interest payments, and becoming beholden to banks.

Second, under the current income tax system, individuals and corporations spend hundreds of billions of dollars every year just complying with the income tax requirements. The code is so long and so complicated that it is astonishing to me that the system even works. A national sales tax would virtually eliminate the tax code bureaucracy, eliminate the need to ever file a tax return again, and some have even suggested it would eliminate the need for the IRS completely under certain conditions.

The downside, and there are always downsides, is that it is inherently regressive. The poor must spend nearly every penny they earn in the marketplace, whereas the rich spend an increasingly small amount of their wealth on goods and services. This means that the poor would spend a larger percent of their money on taxes than the wealthy, which is the opposite of what our income tax has always been.

This alone is enough to torpedo the idea, for me and most Americans, but there are ways around it. The most common is the annual or monthly prebate or rebate check which would eliminate the tax for those living below the poverty level, and lessen it for those making otherwise low incomes. Another idea is to eliminate the tax on essentials, like food and medical expenses, and/or create a higher tax on luxury items.

So I like it because of its simplicity and its propensity to encourage Americans to save and invest. I am leery because it is potentially very oppressive for the poor. I am by no means completely sold on it, but it is an interesting way to look at tax reform. Thoughts?

The Great 2009 Tea Parties

I am going to fight every urge in my body and refrain from turning the subject of today's Tax Day Tea Parties into a verb. I'm not going to do it as it would be crude and puerile. I will, however, point out the ridiculousness and offensiveness of it all.

As of 3:00 pm MDT, KSL wins the award for most mind-numbing coverage in Utah. The story starts off on the right foot by stating, correctly, that as part of the stimulus the vast majority of Americans, 95%, got a tax cut. Then the proverbial train comes off the proverbial tracks:

Not everyone will be seeing those tax cuts though. People making more than
a quarter of a million dollars will be seeing a tax increase, and that is
leading to a number of protests across the country, including several here in
Utah.

Now, either KSL has completely lost its sanity, or the tea protesters have. People would really go out of their way to organize little tea parties all over the country to decry the tax increase for people making a quarter of a million dollars or more? I would be astonished if not every single one of those protesters got a tax cut. So the jist is: get a tax cut, protest against the one who gave you the tax cut. Brilliant. This simply is too good to be true for Democrats.

One such protest is happening in Salt Lake. It's just like the Boston Tea
Party more than 235 years ago. They're protesting taxes, but these people are
upset with the Obama administration.

It is so not like the Boston Tea Party 235 years ago. It is, in fact, diametrically opposed to the Boston Tea Party 235 years ago. The Boston Tea Party was a protest mainly against taxation without representation. The colonists believed it was their right to be taxed only by elected representatives, not the British Parliament which did not allow representation from America. Today tea partiers have no such qualms.

They just don't like President Obama. Which is fine, I didn't like Pres. Bush. They have every right to protest, that is the American way. In fact, we should encourage more peaceful protests to raise public awareness on certain important issues. But please don't insult us by equating today's highly organized, weak turn-out* protests with one of the most iconic patriotic acts in American history.

*I'm fully aware that the pathetic turn-out in Utah is at least partly due to the horrendous weather. I like to think it was a higher power crying over the lameness of the event, but it could just be dumb luck. But turn-out was weak all over the country, so maybe it was just a contrived idea that failed to meet impossibly high standards.