Getting ready to do a live interview on Capitol Hill with Rep. Frank Wolf (R-Va.) That's congressman Steny Hoyer buttoning his coat, photo left.
Like many of you, I've wondered what can be done about our nation's deficit and debt problems. I've also pondered what kind of future we face if congress and the president can't find a functional solution.
I don't believe America is so weak that this can't be fixed.
Yet, after everything that's been reported, written about, and discussed recently, the $3.8 trillion budget proposed by the president for 2011 includes the largest deficit--you and I would call it an overdraft--in U.S. history. It is estimated at $1.6 trillion.
There is no use recriminating against the president, either party, or congress. They are all responsible and the responsibility goes back a very long way.
I covered what appeared to be an honest attempt at tax reform during my Washington years, and looking back on it has taught me a great deal.
The idea was to fix everything by having one tax rate for everybody. Then, to eliminate all the loopholes. I think I've written about this before.
It was called the Kemp-Roth "flat tax" and it seemed like a pretty good idea at the time. It reduced the percentage just about everyone would pay in taxes, but it ensured that everybody did pay something.
Except it didn't come out like that. First of all one big lobby insisted you couldn't eliminate the deduction for home mortgage interest and with that, congress and its lobbyists were off to the races. Oil companies weighed in. Yacht builders got in line. And pretty soon only some of the deductions had been eliminated.
And then there was the "flat" part. One rate wouldn't do, because some said that wasn't fair to those at the low end of the income scale. A small percentage for the poor was more difficult than a larger percentage for the rich.
So there were going to be two tax rates.
And in a form something like this, the "flat" tax was approved and signed.
In just a few years, another percentage was added. Now there were three different rates.
And gradually over the years, all sorts of deductions and regulations that favored this or that industry were voted back into the tax code. Rates were tweaked and tweaked and tweaked again. Much of this was done in omnibus bills so it wasn't evident immediately.
Came the Dawn.
The unintended consequences of budget item being piled upon budget item being piled upon tax rates that increase and decrease depending upon which way the wind is blowing is so impracticable one wonders how anyone could imagine it wouldn't crash.
A first step, just to show America they are serious, would be for lawmakers and the president to give themselves a ten percent pay cut, effective immediately. The amount of savings would be symbolic, but it would be a start.
Then, I'm beginning to think only a constitutional convention could really reform the tax and budget process, but I'm aware that this is also a very risky proposition.
Of course, we could just keep doing the same thing over and over again expecting a different outcome. But that, I believe, is the definition of insanity.
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