Link: McCain, Obama stake out divergent paths on taxes
And neither of them gets it right. They are proposing different arrangements of the deck chairs, and while one may provide a slightly better view of the orchestra, and the other better accoustics for enjoying the music, neither of them understand either what needs to be done or why.
The question is not how much we should raise via taxation -- we ought to be raising enough to pay for our current operating costs, and not burdening future generations to pay for 2010's spending, including on such "investments" as wars.
Rather, the questions relate to what we should tax and, equally important, what we should not tax, and the degree to which we should tax those things from which we can rightly collect revenue to support our common spending and investment.
McCain is right that taxes on wages and corporations are poor ideas. He's wrong, however, when he suggests lowering those taxes without telling the public how to replace that revenue.
Obama is right to point out that our wealth is concentrated in a very small portion of our population, but his proposal to increase capital gains taxes for high-income people is a clumsy tool for correcting that.
So what SHOULD we tax? Let me count the resources.
1. We should be treating the airwaves as if they actually do belong to the American people, and collecting, month in and month out, the economic rent on every "inch" of the broadcast spectrum. Were we to do this, they would no longer be bought and sold at high prices from one media or communications company to another, because they would change hands with a huge carrying cost -- that monthly payment into the treasury -- and they would be well-used to meet consumer demand, because that's where the profits would be, rather than in the speculation on the scarce resource.
2. Landing rights at busy airports currently get sold from one airline to another. The user of those rights should be paying into the treasury the monthly value of those landing rights, not paying off the former corporate occupant, who didn't create that value. Would the rights continue to exist? Yes. Would they change hands regularly? Yes. Would the winner be the seller and his shareholders? No! They would have no selling value, because they come with a monthly tax bill attached which represented the vast majority of their value. Would this lead to improved service at outlying airports? Most likely. For example, Stewart-Newburgh might be developed to serve the needs of the northwestern suburbs of NYC, relieving some of the congestion at JFK, LaGuardia and Newark airports. Would it lead to fewer landings at LaGuardia? Not if that's where people wanted to land!
3. Water rights. Mason Gaffney details this at http://www.economics.ucr.edu/papers/papers07/07-13.pdf (near page 28 and again around page 39)
4. Royalties on natural resources. See the same document, near page 48.
As you read these, keep in mind one of my favorite quotes:
He who sees the truth, let him proclaim it, without asking who is for it or who is against it. This is not radicalism in the bad sense which so many attach to the word. This is conservatism in the true sense.
Powers that be may not like this. But that does not reduce the truths involved by even a tiny fraction!
Gaffney's article lists a number of other like resources:
- Fisheries
- Littoral space (I'll leave it to you to find out what that means in this context!)
- Geosynchronous orbits
- Congestion, on highways, city streets, parking, airports, harbors, flyways, etc.
- "Land-grabbing capital"
What should we tax? I'll refer you to Fred Foldvary's article, The Ultimate Tax Reform: Public Revenue from Land Rent
Is there enough there? We don't know for sure ... but we think so. And we think there is good reason to believe that even if there weren't enough to meet all the current needs of government, at all levels, the social and economic shifts created by this reform might be sufficient to reduce the need for many kinds of government spending. Much of the social safety net would no longer be put to use in good times and in bad; bad times would be ameliorated.
I hope our presidential candidates will familiarize themselves with these ideas. Their campaign staffers can do the legwork, and their senate staffers can play a role, too. If one of them -- either of them -- can take the time to offer us a solution that ISN'T simply rearranging the deck chairs for a better view or for better acoustics, we might find this election moving the country ahead.
And this may be the first post I've done in a long time that doesn't (until the final paragraph) even refer to what is perhaps the most important benefit of this reform: ending poverty.
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