Saturday, January 29, 2011

What's Not to Like?

I had a lot going on this week, so I'm finally getting around to digesting the State of the Union. I enjoyed watching the speech; I like President Obama, and I felt like he was able to go back to the themes of bipartisanship that he campaigned on. The last two years were, predictably, about 1) bringing the economic collapse to a screeching halt, and 2) letting the opposition get their "I hope he fails" antics out of their system. Both sides learned a lot - I hope - and since the Tucson shooting coinciding with the beginning of the new Congress, there is a sense that the next two years will be about *actual* cooperation.

We shall see.

But my positive feelings aside, there were some things that I heard in this year's State of the Union that made me sigh. Here's a short list:

1. Bio Fools. I am keenly interested in seeing our energy policy move away from fossil fuels and toward decentralized renewable sources. As a consumer, I don't want to be dependent on a large, expensive infrastructure to deliver the power I need, and I don't want that power to come from sources outside of my control. I am mildly concerned about mankind's impact on the environment, but to be honest, I am more concerned with removing the alleged free market's ability to make decisions for me.

That said, there are energy policy ideas which I do not like that this President seems too willing to support. Bio-fuels, so-called "Clean Coal" and nuclear generation are where I feel he misleads himself. Bio-fuels/ethanol/corn-based alternatives are turning out to be a very poor replacement for petroleum-based fuels, according to environmentalists and scientists, and has an impact on farm subsidies and food supply, as well.

The case against "Clean Coal" is strong, too. It is an expensive attempt to sell environmentalists on the continued use of regular old coal, but ignores the problems of extraction and the expensive infrastructure of high-powered transmission lines needed for delivery.

I would personally like to see Nuclear power develop into the cleaner, safer source that the next generation of nuclear generation technologies promises to be, but even more than the still-young solar industry, this is a technology which is "not there yet."

2. Why Speed Trains? I would love to see public transit take off in this country. I would, as a free market consumer, LOVE to have a real choice between car and a system of reliable, timely buses, trains, etc. I pay so much in financing, fuel, maintenance, and insurance, I am certain that a competitive and profitable business of getting people from here to there within any metropolitan area could be built.

Highways are far and away the deadliest way to travel, according to the Bureau of Transportation Statistics. Congestion is increasingly costly (see Texas Transportation Institute stats). Compare fuel consumption (and see issue #1), too, while you're at it. It's pretty clear that our "free choice" to drive ourselves everywhere is not only an illusion of choice, but it is also a pretty poor one.

But are high speed trains the place to start building that? How am I supposed to get to one from my house? What about getting to and from the grocery store? Perhaps the self-driving Google car will make this a moot point? If so, then perhaps the President was right to include Google in the company of the Wright Brothers, after all?

3. The Feeble Response. Rep. Paul Ryan's response was a crucial part of the State of the Union. He had an opportunity to really make the GOP case that they have ideas and can compete with the President's agenda. But there was no "there" there. Never mind the factual inaccuracies; all he tried to do was restate the memes of "spending discipline" and "limited government" without explaining in concrete terms what either meme means.

Since the President talked about the debt and spending in some depth, and listed specific ideas for dealing with the issues, the GOP needed to address his ideas with specific ideas of their own. Instead, Rep. Ryan reiterated the tired rhetoric of the last two years - the stimulus failed (which is not necessarily the case), health care reform should be repealed (which is not necessarily a good plan or the right battle), and "unshackling business" will lead to new jobs and growth (for which there is no real evidence).

I would have liked to see Rep. Ryan come out in support of something truly innovative, like the FairTax legislation (now proposed by Sen. Chambliss). Or perhaps he could have talked about ways to make Social Security solvent without leaving those who paid into it their whole lives out in the cold? I don't know - I'm not a Republican, so I don't know what I should expect them to come up with.

At the least, perhaps they could publicly distance themselves from the odious talking heads and pundits lying to America in their name on Fox News and Talk Radio? (Just a thought.)

Let's see what happens this year.


Seeker said...

You seem like a sincere guy, with some good ideas.

Except one. You think this "fairtax" is "innovative"?

I got news for you. Seriously.

I was a big fan of this plan early one. Then I read the fine print.

In their fine print -- DEEP in the fine print -- they have a massive two tier system.

Did you know it's much more than this tax on people, for 23%?

Yes, it's a whole lot more. In fact, the biggest tax payer, by far, wouldn't be people at all.

In their fine print is a massive tax on city and state governments. They don't mention this trillion dollar tax in their books.

They don't mention this trillion dollar tax in their videos.

They don't mention this trillion dollar tax in their speeches.

When you go to their bill itself, HR25, you have to go to THREE different places, and piece it together.

That's right -- there IS no place where it says clearly "CIty and State governments will have to pay a trillion dollars a year (or so) to the federal government."

But Fairtax leaders defend this trillion dollar tax tenaciously -- I have spoken to them.

There is NO question they have this trillion dollar tax -- they defend that. They won't explain why they didn't make that clear.

They claim it's VERY clear! One of them told me just yesterday "Go look in Section 709, then look at definition of a person in Chapter C, paragraph 2" or some such.

As if that was clear. Not in any book, not in any video, not in any speech.

City and govenments can not possibly pay this - and they won't. Yet it's central to Fairtax math.

Is that what you mean by innovative?

I guess Bernie Maddoff was innovative.

Tad said...

Thanks for the links - this is exactly the kind of thing that needs to be explored and exposed. But in the process, I'm hoping that people will start thinking. Wisdom of crowds and all that - after all, the tax code we have has plenty of "easter eggs" in it, too.

Maybe, if it's possible to retain only the parts that made you (and I) big fans of FairTax, it could still be viable.

Seeker said...

Parts of it that are valid??

Keep the parts that are valid?

You arent grasping this.

Fairtax lied to you (and me) about it, because of MATH. They lied and pretend they can tax city and state governments. That's an 800 billion dollar lie.

They lie about their prebate -- another 800 billion dollar lie.

Why did they lie? Because they are pathological liars? No.

They lied because they want you to think a national sales tax is doable.

Oh, you could have a national sales tax. No doubt. ANd it would get rid of all tax forms, get those who avoid taxes to pay, all that. Yes sir.

But here is why they lied --- a national sales tax would have to be 60% or so. At least.

If you go by real math, if you add up only things you can really tax, then the tax rate is 60%.

Fairtax knows this -- thats the WHOLE REASON they lied. They want you to believe it could be 23%.

A 60% sales tax would destroy our economy. People would avoid buying things.

That is obvious but the National Association of Retailers said even their 23% sales tax would "decimate" our economy FOR YEARS. Just their 23%!

But really, it would be 60%.

A sixty percent sales tax would collapse the economy.

So what part are you thinking about keeping?

We need a new tax code. And one is possible. Bill Bradley, the former Senator, had a "Fairtax" plan 15 years ago. It wasnt a BS gimmick, he didn't make up stuff, it wasn't sexy.

And the rich would have had to pay more. SO it went no where.

Senator Ron Wyden had a plan, just two years ago, also called something like "Fairer and Flatter" tax plan.

It went no where, it was a lot like Bradley's plan.

Fairtax smart move was to take the name. Nothing fair about it, it's deceptive nonsense.

Fairtax own leaders by the way, know it's nonsense. I kid you not, the LEADERS are not trying to pass theri own plan.

Some well meaning folks that were fooled by Fairtax are trying to pass it.

Now that people like Huck and GOP House member Steve King can't blame Democrats for keeping Fairtax out (they never did keep it out -- at all) what will they do?

My hunch is Huck and King will try to tip toe back away, and they will try to blame "lobbyist" or "democrats"

They know their own plan is a massive tax on city and state governments. They don't a massive tax on city and state governments!

They would hate that themselves! Fairtax leaders only put that in the fine print so their math would add up. Do you understand that?

If you want a rational tax plan, realize it's not sexy, it's not cheap, and a lot of wealthy people would have to may much more.

Obama said he was going to do something about the tax system --- I think we need an entirely new one.

But it can't be a sales tax. A sales tax that large will just decimate sales.

Tad said...

Seeker, if you don't mind, I'd like to use this conversation as something of an object lesson for my friends.

You see, right now I am in a position that a lot of my friends complain about: swimming in conflicting information, and trying to figure out what is "true" and what is not. So, more for those friends than for your benefit, let me talk through what I'm thinking:

Staying rational: All of my emotional attachments to an idea I have liked for a long time shouldn't count in this decision; neither should the passionate argument of a stranger (or even a friend) who doesn't like it. Rationally, I have to evaluate sources.

What are my sources? I read the FairTax book in 2003, and I occasionally see conversations (like this one) involving fans and non-fans trying to convince each other that the other is crazy. That isn't a whole lot to go on, really. You have given me links which, on quick evaluation have two flaws:

1. You appear to have written one of the posts (the day before my own!) based on the second - which is a "paraphrased" conversational dialogue between a composite "FairTax spokesman" character and the poster. This is a useful device, but without citing a real source, it is suspect. I have no one to point to and hold accountable for either side of the argument, nor is there any way for me to check the claims made in the dialog independently - other than re-reading the FairTax book itself.

2. Both posts pull out scary numbers and abusive language, but (like the FairTax site itself) fail to point to any independent or widely recognized studies or scholars supporting the claims made.

On the plus side, you have a link that says "Even CPAs and Tax Experts know!" which leads to a libertarian senate candidate's site with more info that seems concrete - but still nothing from independent economic experts (at least none who aren't running for office).

But I haven't addressed the substance of your argument, Seeker. That being the assertion that the FairTax legislation taxes purchases AND wages at the city, state, and federal levels, that this is unconstitutional, and that the tax rate would have to be doubled to make up for removing that part of the legislation. If this is true, it should be easy to find in the legislation (Sen. Saxby Chambliss has submitted S-13, but it's not published online yet). If this is what the legislation calls for, I would want that to become part of the debate about the bill, and let legal experts more qualified than myself analyze it for legality. And mathematically, I still wonder whether the embedded costs that would go away with the abolishment of the IRS and existing tax code would not "wash" as the FairTax proponents claim it would. For an answer on that, I would like to see the bill's assessment from the Congressional Budget Office.

That's not just me being stubborn, mind you; that's what the Congress is *supposed* to do, after all. Moving this legislation forward to the point where it is seriously considered and debated is part of the process.

So my problem remains: I am not that great at math, and can't trust my own skills to test FairTax myself. I have to rely on information provided by others - and I'm still left having to decide whether I believe the proponents or opponents of FairTax itself - all of whom seem to want to frighten me in some way.

Seeker, I appreciate you taking the time to try to educate me; I assure you it has made me think. I also assure you that I'm not a blind follower of any ideology; I am intrigued by this idea because it sounds good - and if it is "too good to be true", then the proof of that should be thorough, honest, and openly available so that people like me don't spend a lot of time re-fighting the battle to put it into law.