McCain = Greenspan + FairTax
Republican John McCain said Thursday that as president he would appoint Alan Greenspan to lead a review of the nation’s tax code — even if the former Federal Reserve chairman was dead.
“If he’s alive or dead it doesn’t matter. If he’s dead, just prop him up and put some dark glasses on him like, like ‘Weekend at Bernie’s,’” McCain joked. “Let’s get the best minds in America together and fix this tax code.”
The 81-year-old Greenspan served as chairman of the Fed for 18½ years.
Campaigning in early-voting South Carolina, McCain was asked about his support for a flat tax.
“If the fair tax crossed my desk, I’d sign it. If a flat tax did, I’d sign it,” McCain said while noting criticism of the concept. “What we all agree: It has to be made simpler and fairer.”
Not bad words to hear from a presidential candidate, if you ask me.
How’s Hillary coming along, Hayden?
McCain is not yet convinced that the FairTax is the way to go. With Huckabee, there is no question:
http://snipr.com/fthuckabeeonirs
The clearest comment I have heard yet about taxes from any candidate
I am still not convinced on the fair tax however I have watched a bunch of bloggers suddenly cut it up since Huckabee rose in the polls and now I am starting to buy it. Whenever those that don’t necessarily know as much as they think they know attack something, I am more interested in it.
As for Greenspan, I am not sure why McCain is so impressed. I believe his record is quite mixed. He set the train for the sub prime mess by lowering rates so low for so long. Here is how I analyzed Greenspan.
This is good news, a little more to make me comfortable with McCain on economic matters (He’s had to work his way back since voting against W’s tax cuts. Brining Phil Gramm aboard was a good step). But didn’t he say at a debate a few weeks ago that he does not support the FairTax? I favor a flat tax more, but either one is better than what we have now.
The dire need for immediate, drastic tax policy change in the US is undeniable. I submit the following reasons:
1. Group behavior is clearly shaped (even more than individuals admit) by governments that punish and reward. Punish saving by taxing it, and people will save less. We have done this on a personal and national level until we have little or no reserve available when needs arise, so we borrow. Debt takes away freedom, and I believe we are becoming a nation of debtors to the point of not being able to recover. There is also a clear link between national debt and personal debt. For example, our subprime mortgage problem has weakened the value of the dollar, resulting in our government paying higher interest on new debt.
2. Technology has made the movement of money and the formation of shell entities very easy. This has exacerbated the already brisk departure of money from the United States, where income by individuals and corporations is taxed. You can see evidence of how this affects economies by looking at tax rates of countries (try http://en.wikipedia.org/wiki/Tax_rates_around_the_world ) and comparing known “boom “ economies (Ireland, UAE, etc.) with slow ones. An additional potential problem related to this is the increasing foreign ownership of business and real estate here.
3. Our security is at stake when we do not have the capacity to manufacture weapons for defense. Heavy industry has declined rapidly in this country since the late 1950s. There are advantages to the post-industrial society, but we are near or past the point where we may not be able defend ourselves if certain countries and/or groups became more aggressive. Tax policy has been a factor in the cause of reduced manufacturing here.
4. Too much productivity is wasted trying to figure out who owes what, and what to do to owe less. I believe some of our greatest minds spend their working life helping others comply with the tax code. There are also highly productive people who stop creating goods, services, and jobs because of high taxes.
5. Illegals usually do not pay income tax, so they are rewarded for coming here to work where they receive a high quality of life. Legal citizens lose jobs and pay for their services.
6. Our tax policies are contributing to China’s potential dominance over us. Generally, they are loaning us money to buy their goods and services, while they save and invest in business and industries that take jobs away from us. They give their companies incentives like government housing of workers that helps counteract their small corporate taxes while we tax our corporations heavily. Because the US and China are the only two superpowers, the consequences of any tax policy on that relationship should be considered. To illustrate the philosophy of the Chinese government regarding the US and potential conflict, consider the words of the ranking Republican on the House Armed Services Committee, Duncan Hunter: “China is cheating on trade. They are piling up over 200 billion U.S. dollars each year as a result and they are buying ships, planes and missiles with American trade dollars. They have purchased Russian Sovreignny Class missile cruisers designed to destroy American aircraft carriers. They have built between 750 and 1,000 medium range ballistic missiles and they have 17 submarines under construction. How are they cheating? China gives 17% tax rebate to their exporters and a 17% penalty to our businesses who export to them. In addition, they maintain a 40% currency devaluation just to make sure the U.S. business doesn’t win. This is not free trade. This is not fair trade. It’s cheating and if we put up with it, then we are disserving not only business and workers, but also our security. If this was a football game, it means China has put 74 points on the score board before the opening kick-off. Our own head of the Federal Reserve Board, Mr. Bernanke, went to China a few weeks ago and wrote a speech describing China’s currency manipulation as a subsidy. Then he pulled those words out so as not to anger his Communist hosts.” If there is a way to reduce our dependence on (and possible submission to) China by simply changing the vehicle that we use to collect taxes, that is a giant reason to do so. China is the biggest threat to our freedom.
The Fair Tax improves all of these situations. It encourages saving and discourages spending. It makes the US a tax haven, in fact the most desirable tax haven in the world for all of the reasons that this nation is great. If there was a clear economic incentive to put money here, incorporate here, build here, manufacture here, etc. all of the other things that make it attractive to business like freedom, quality of life, infrastructure, security, natural resources, diverse climate, able workforce, etc. would cause every global corporation to want a large, heavily capitalized location here if not their headquarters and their entire financial operation. Manufacturing would spring back to life here, and we would be able to respond if we needed to make planes, ships, weapons, etc. for defense. Our brightest and most creative minds could spend their precious time earning large amounts of money so they could afford to do good in the world. In fact we would all be more able to fund charities and global projects to feed, heal, and educate the needy of the world. Illegals would have incentive to become legal (which I think should be easier to do) because if they are not citizens they would pay more tax since they would not receive the monthly check that all legal citizens would receive. We would be less likely to lose freedoms to a more dominant China.
I can find things about the Fair Tax to criticize. Some of its features are not great. But until someone shows me another plan that will accomplish all of the above objectives; a plan that has been thoroughly researched and already has hundreds of thousands of supporters, I will actively promote (and vote for candidates supporting) the Fair Tax. In regard to criticism, I think it is good to know what the negatives could be. Someone at FactCheck.org seems to dislike the Fair Tax and has tried to shoot holes in it. But it is illustrative of how difficult that is to do when you read in the middle of their critical piece the statement “Moreover, even FairTax critics like (William) Gale agree that consumption taxes increase the size of the economy. Many studies show that long-term incomes would rise under a consumption-based tax system. Optimistic accounts show a 10 percent rise in income over time, but even the more cautious studies show gains of 5 percent to 7 percent.”