What to do with the tax
code? What to do with the Federal budget? How to pay for the Medicare,
Medicaid, Obamacare/Trumpcare, and many other government funded programs? How
to close the budget deficit?
These questions are not
new, but for at least two decades no major political party have been even trying
to start a serious discussion about changing the tax code.
Until now!
It is interesting to
think about why, in order to start tackling such a difficult problem like a tax
reform, did the Country need to elect as the President of the United States of
America such an odious figure as Donald Trump?
I have published several
posts on the matter, so I will not be addressing this issue in this post (e.g. http://the3dforce.blogspot.com/2017/04/why.html).
But what also caught my
attention is the fact the conversation
about taxes is stuck in the fight between two ideological dogmas.
The dogmas, which have been developed about forty or fifty years ago,
and do not reflect any more the current
economic and social realty.
That automatically means
that no matter which one of the two dogmas prevail, 99 % of American people
will lose anyway (unless the third path will be found).
The first dogma states
that cutting taxes boosts economy, it leads to a drop in unemployment and to a
growth in wages. Based on this dogma, no tax can be ever raised; a tax raise in
any form is forbidden.
This dogma was developed
before the globalization, the Internet, the WWW, the AI boosted robotization,
and before restructuring of the global powers. Hence, it is outdated (and there
are numerous data proving that it does not work any more).
The second dogma states
that only broad federal regulations can keep the balance between the needs of
regular Americans and the needs of big corporations and wealthy individuals.
Based on this dogma, government has to widen its regulatory actions, and grow
its regulatory entities.
This dogma is also
outdated due the same reasons, especially due to globalization.
The problem with dogmas
is that they prevent people from searching for solutions outside of the
mainstream views. Any idea which does not fit into the limits placed by a dogma
is automatically rejected without being given any consideration.
It is worth to take a
closer look at what a dogma is, and how a dogma evolves (a short detour into the
philosophy of science and the theory of human activity: http://www.teachology.xyz/pd.htm).
First, a dogma is just a
commonly accepted statement (or a set of statements) about certain principles
which govern peoples’ actions.
Those statements have not
been written in the sky, or unearthed from underground.
Those statements have been developed “by
the people, and for the people”.
Dogmas have not always
been dogmas.
At the beginning of their
time, they were paradigms, beacons of
the new ideas. Initially, only few people used them in their everyday life. In
time, more and more people accepted those principles as the governing
principles for their actions (because they worked!). Eventually, people have
forgotten that those paradigms have been
developed under specific circumstance for answering specific questions about
life, to solve specific problems of those times. Eventually, the paradigms have
become statements which had to be accepted without any questioning – i.e. dogmas.
Time passes, life changes, but dogmas remain still, and soon some people start noticing
a divide between the needs of the life and the dogmas, which only grows with
time. When that happens, the society starts to experience the need for new
paradigms.
When that happens, people
who are willing to think beyond the dogmas begin offering new ideas, new
approaches to solutions to problems at hand. Many of those ideas may be silly,
or crazy, but they create a fertile soil for a new paradigm, and one of those
ideas becomes a seed from which that new paradigm eventually grows up.
Now one can predict which
new idea will eventually outlive all other ideas and become commonly accepted
as the new guiding principle.
That is why it is so
important to not just shovel away anything which does not fit in the limits set
by the current dogmas, but give a fare consideration to many of them. Of
course, without some filtering, scientists, researcher, politicians, political
strategists may be drowned under the shower of views, ideas, propositions.
Currently, the filtering is based on the “halo effect” (https://en.wikipedia.org/wiki/Halo_effect),
which is basically asking “who says
that?” instead if “does it make sense?”.
The better process of
selecting new ideas for a further deeper consideration should be based on the
answers to the questions like:
– what do we want to achieve?
– what is our ultimate
goal?
– what is wrong with what
we have now, and what do we want to fix, what change do we want to see in the
end?
– how will we know that
our goal has been achieved?
I like to summarize this strategy
in a concept map (I like using mapping for teaching physics: http://teachology.xyz/mocc.htm, but
mapping is a universal way of representing connections).
BTW: the result of this
reflective action heavily depends on how good is the person’s imagination
(everything is happening in his or her mind!), and imagination is best
developed via reading (not via watching TV, or playing videogames, which also help
with development some psychological functions, but NOT imagination; learning physics
is also greatly boosts imagination: http://www.gomars.xyz/1717.html).
When I listen to news,
the first thing I notice every time, is that neither party offers specific
measures to assess the success achieved as the result of their proposals. I
cannot get a hand on any specific data which would be related to the future of my
life. This makes me feel afraid of that no matter which plan will win, my life
will be negatively affected.
This is when my
imagination starts acting out, because I don’t understand what is happening.
When I don’t hear a clear
reason, when I don’t see a clear picture, my mind starts creating its own
arguments, which would make sense to me.
When those arguments
become relatively clear, I write them down, and publish on my blog (my way of
venting out, I suppose).
There is nothing special
about that.
By design, all a human
brain does, is absorbing information, processing information, and producing new
information. Then, consciously or subconsciously, the new information affects human
actions. If the new information stays inside, it affects actions of only one
person. If the new information is brought outside (in the form of a speech, a
gesture, a picture, written words, signs, symbols, songs, a physical contact), it
may affect several people, or even a massive number of people (an example of
such effect is the case of Facebook and Twitter political ads of 2016 elections
cycle).
But let’s return back to
our conversation about taxes, and apply the described strategy to designing a
new approach to a tax reform.
What is the ultimate goal of the tax
code?
Everyone involved in the
debate must give an answer to this question.
My answer is: “The ultimate goal of the tax code is
regulating wealth distribution in such a manner that all citizens would be able to live a decent life”.
This answer has two words
which are more important than all other, which are “all” and “decent”.
These words need a
further description, a further detalization.
For me “all” literally
means “all” – no exceptions under any circumstances.
The meaning of “decent”
is not so easy to establish. For example, it may be different for people who
currently serve a conviction due to a committing a crime.
For this conversation,
the exact meaning of “decent” is not important.
What important is that my
definition of the goal for the tax code immediately differentiate all people
into four categories: the ones who agree, the ones who disagree, the ones who
do not care, and the ones who are not sure.
There is no point in
trying to make people who disagree or don’t care to change their mind. That
would be just a waste of time and energy. The main goal is finding people who
are agree, and the main target should be people who are not sure, i.e. who
could be swung (a.k.a. swing voters).
If you and I are agree on
the main goal, we can start talking about details.
For example, what does “decent”
mean?
How much does one
(anyone) need to maintain a decent life?
What are the biggest obstacles
to achieving the goal?
What are the biggest threats
to achieving the goal?
Etc.
The other day I watched
an interview with one of the Nobel laureates in economics (do not remember the
name). He said that he sees only two options:
1. eventually all taxes
will have to be raised,
or
2. eventually all federal
programs will essentially be closed.
That made sense to me.
That statement represented a clear model:
1. more money into
federal chests, and keeping working federal programs.
or
2. no money into federal
chests, and having no federal programs.
Closing all major federal
programs would be disastrous for the Country, because that would significantly
lower the quality of life for many Americans (that is my belief).
That would be moving away
from the goal.
That means, that whether
we like it or not, but the biggest
threat to achieving the goal is low taxes.
That means, that whether
we like it or not, but we have to call for higher taxes (and, of course,
simpler and more transparent tax code).
Colling for raising taxes
is exactly what all politicians are
afraid the most.
The reason they are
scared of calling for higher taxes is that they do not believe that American
people are wise enough to use a common-sense logic.
Simply saying, many American politicians believe that American
people are stupid.
From my point of view,
that makes many American politicians to be unwise (at the least).
For example, talking
about “income inequality” is unwise.
People who talk about
various aspects of “income inequality” do not know what people with a low
income actually want. If all those pundits would ask anyone who lives a
paycheck to a paycheck what do they think about “income inequality”, those
pundits would learn that people do not care about how much Warren Buffet makes
a year; they care about how much they
make a year, and that it is not much at all.
Instead of talking about
“income inequality” those pundits should have been talking about income insufficiency.
That was just an example
of the fact that many politicians and political analysts do not know psychology
of a common man.
Naturally, saying “your
tax will go up” will not gain any support.
But I am sure that most
people would at least think about options, if they heard: “To save the economy
from a crash, to keep the safety net provided by the government, everybody will have to pay a higher
tax. Every American will have to do his or her part. Well, people who are
well below the “decent life” line, will not be affected, and the raise will greatly
depend on the individual income, and for the most of Americans the change will
not be significant. However, this action will allow us to restructure our economy
in such a way that we will not only prevent economic crash, we will be able to
gradually move all Americans above the poverty line. People with an insufficient
income will be getting help from government to sustain their life at the “decent”
level, but with the help of the government and in collaboration with the businesses
the number of Americans with an insufficient income will gradually decline to
zero. That is the ultimate goal of the tax reform!”
Can this be done?
I believe it can.
Our
politicians also do not know the psychology of the wealthy Americans. That is
why they treat them either as enemies (the Democrats), or as gods (the Republicans,
who call them “job creators”, although I doubt that it is a correct name for people
who closed about 60,000 factories; the right term should be “wealth creatures”,
and those are NOT the CEOs of big companies! “Who are the real wealth creators?”
http://the3dforce.blogspot.com/2017/09/wealth.html).
Of course, wealthy
Americans are neither gods nor enemies; they are just people who want to maximize
their wealth, or to preserve their wealth by affecting the political process
into their favor. Which is absolutely natural intention for such people. This
intention should be used in order to navigate their energy into the direction
leading to general social gains.
A tax reform cannot
happen without addressing two big problems: healthcare spending and entitlement spending.
The Republicans want cut the programs to save money, the
Democrats want to increase the spending.
They cannot find a common ground because they see those spending
as a necessary part of the federal budget.
Hence, let’s move
all the healthcare and entitlement related spending outside of the budget (more in this matter is in this
post: http://the3dforce.blogspot.com/2017/10/porg.html).
In that case there will be no
problem to discuss (well, tax code still will have lots of loopholes to be
fixed, but that requires a different conversation).
Note, I do not suggest to eliminate
healthcare and entitlement programs.
Of course, we have to keep them and
make them effective and broadly accessible.
Of course, we will need money to pay
for them.
But those money should not be
regulated by the congressional or White House budgetary committee (or whatever
committee regulates the budget).
Instead, the Congress needs to establish
two more “federal reserve”– type entities: a “healthcare federal reserve”, and
an “entitlement federal reserve”.
Each “reserve” will be run by the
board of independent appointees.
Each year each board will be
calculating the amount of funds needed to pay for the related spending.
Then, that amount will be
distributed among “income holders” (individuals or establishments/corporations)
accordingly to the equation the board will come up with (higher income means
more money).
Each “income holder” will have to
send a specific amount of money directly to each “reserve”.
That moeny cannot and will not be
called a “tax”; it will be a “fee” every “income holder” will need to pay.
That individual amount of money,
each “income holder” will have to send to each “reserve”, will depend on the
total amount of funds the reserve will need to accumulate on an annual basis.
Hence, every year that amount of
money may be different, depending on the needs of the “reserves”.
That means, everyone paying this “fee”
will be interested in decreasing the amount of funds needed for each “reserve”.
Everyone, including big
corporations!
Imagine, one runs a big company, and
one has to pay a healthcare cost for one’s employees, and it is huge. Maybe one
will begin to reaching out to insurers and hospitals and start pushing them to
drop the cost down?
Imagine one runs a big company, and one
pays the employees so little, that they have to apply for federal help from the
“entitlement reserve”. Maybe one will begin to think about raising their wages?
Naturally, the path from
an idea to a legislation takes long time and a lot of effort, but someone
somewhere sometime should start trying out creative approaches.
And that requires imagination,
creativity, knowledge of human psychology, and ability to step outside of the well-established dogmas.
BTW: that requires a good
education (on a massive scale: http://www.gomars.xyz/cash.html).
FYI: that requires reforming
the way education is being reformed (http://www.teachology.xyz/np.htm).
P.S.
Currently, progressives of all sort are busy with fashioning a big fiery GALA (http://the3dforce.blogspot.com/2017/11/3dforcedown.html).
At the same time Regressive Republicans developed a network of disinformation: http://the3dforce.blogspot.com/2017/11/disinformation.html.
Who is a real revolutionary here?
P.S.
Currently, progressives of all sort are busy with fashioning a big fiery GALA (http://the3dforce.blogspot.com/2017/11/3dforcedown.html).
At the same time Regressive Republicans developed a network of disinformation: http://the3dforce.blogspot.com/2017/11/disinformation.html.
Who is a real revolutionary here?
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