America, April 11, 2012
Rebutting Ryan
by Kevin Clarke
Wisconsin Congressman Paul Ryan was back in the news today, promoting his
budget proposals and his take on Catholic social teaching ... Ryan
equates subsidiarity with the American political concept of federalism and
he limits Catholic concepts of subsidiarity and solidarity, which he seems
to jumble together, to essentially individual and community based
expressions of civic engagement. ... “To me, the principle of
subsidiarity, which is really federalism,†Ryan said, “meaning government
closest to the people governs best, having a civil society of the principal
of solidarity where we, through our civic organizations, through our
churches, through our charities, through all of our different groups where
we interact with people as a community, that’s how we advance the common
good. By not having big government crowd out civic society, but by having
enough space in our communities so that we can interact with each other, and
take care of people who are down and out in our communities.â€
2-4-8 Response
The “Ryan†budget is a political response to the
“Obama†budget. Neither budget is a genuine attempt at tax and spending
reform. Rep. Ryan’s beliefs should not be inferred from the budget and he
should not be personally accused of shredding the safety net or eliminating
Wall Street oversight. Better spending and smarter oversight can be virtues
to the open minded. Remember it was only a short time ago when Paul Ryan’s
Roadmap for America’s Future called for an 8.5% VAT to replace the corporate
income tax. Now the Ryan budget calls for a reduction of the top corporate
and individual rates to 25% with little indication of what tax expenditures
(a/k/a “loopholesâ€) will change. The vagueness of both budget documents was
deliberate because it encourages political contributions to both parties in
the hope of maintaining the favorite loopholes of the donors. The
uncertainties of the budgets also enable businessmen like Mr. Romney to
project an open mind by saying he intends to look at each tax expenditure at
the appropriate time.
A Catholic social advocate might look past the speck in
his brother’s eye and be ready to think out-of-the-box. Please consider
better federal taxes and better federal government spending when the
political theatre takes a curtain call in November.
Better taxes:
Individuals - If we taxed individual income at 8% and
individual net wealth at 2% (over $15,000 and excluding retirement funds) we
could replace all current federal revenue and eliminate regressive payroll
taxes. Economic mobility would be created by keeping 92% of income and the
concentration of assets would gradually diminish. [Payroll, capital gains,
estate and gift taxes would not be needed].
Business - An 8% corporate income tax and 4% and
business value added tax (VAT) could bring in an extra 0.5 trillion (with
rates lower than all major competitors). [The VAT would apply to the 8 out
of 10 businesses which escape the C corporation tax].
Better spending:
Rental Assistance – “in fiscal 2012, it spent $35
billion to continue rental assistance to 4.7 million families†is something
that is done because the government zoning restrictions on housing prevents
fair market rents. Government rent control is also counterproductive. If
there were no such thing as “family†zoning of homes and occupancy was
restricted by safety concerns rather than pedigree, the rental housing
market would free up. The Supreme Court has upheld restrictive local zoning
but it could be changed to promote racial and economic integration and
revitalize the housing market (and at great savings to the taxpayers).
[Better housing, less tax money].
Seniors – Stop encouraging late retirement with higher
social security payouts and excessive retirement exemptions. [More good jobs
for younger people, less tax money].
Safety Net – Replace food stamps and most other federal
“safety net†programs with government part time jobs at salaries a little
below minimum wage. Government and not-for-profit entities would train and
supervise workers in a supportive environment. [Be creative!]
Education – Provide copyright free digital books,
educational videos and tests to all; and leave public education to the state
and local government. [Some education help for all at very little cost].
Infrastructure – The federal government should not take
tax dollars from one community and give them to another (including highways,
mass transit, empowerment zones, education, farming, fisheries, police and
most other congressional earmarks). [Reduce the role of federal government].
Sin Taxes – Eliminate all federal taxes (except as part
of a VAT) on cigarettes, gasoline, alcohol, carbon, etc. State and local
governments will tax as needed.
Research and Development – Patent Law encourages
private investment in new technology and rewards success. R&D tax credits
gives most rewards to research efforts which are not successful and should
be eliminated. Tax credits are not needed for successful R&D.
Health Care – Catastrophic health insurance (with
co-payments and limited provider choice) should be provided to all for free;
or via voucher toward better insurance. Health insurers should be required
to receive and maintain digital health records of all patients, identify
create best practices (i.e. interactive online patient questioners, nurse
and physician assistant triage, video examinations, and doctor referral
scheduled as needed), and steer patients to cost effective providers through
lower co-payments. [Current federal health care law under court review].
Eugene Patrick Devany, JD, MPA
www.TaxNetWealth.com
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