Saturday, May 21, 2011

Response to E-Mail "How to Fix Congress"

I received this e-mail below from a friend. It starts out with a quotation from Patrick Henry. I've seen this e-mail, in various forms, quite a few times. I agree with parts and disagree with other parts.

“The Constitution is not an instrument for the government to restrain the people; it is an instrument for the people to restrain the government - lest it come to dominate our lives and interests”.
- Patrick Henry -

I have totally cleaned this e-mail from all other names, sending it to you in hopes you will keep it going and keep it clean. This is something I will fight for and I hope you all read it all the way through. You will be glad you did.

The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971...before computers, before e-mail, before cell phones, etc.

Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land...all because of public pressure.

I'm asking each addressee to forward this email to a minimum of twenty people on their address list; in turn ask each of those to do likewise.

In three days, most people in The United States of America will have the message. This is one idea that really should be passed around.

Congressional Reform Act of 2011

1. No Tenure / No Pension.
A Congressman collects a salary while in office and receives no pay when they are out of office.

2. Congress (past, present & future) participates in Social Security.
All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all Americans do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the American people.

7. All contracts with past and present Congressmen are void effective 1/1/12.
The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

If each person contacts a minimum of twenty people, it will only take three days for most people (in the U.S.) to receive the message. Maybe it is time.

THIS IS HOW YOU FIX CONGRESS!!!!!
If you agree with the above, pass it on. If not, just delete. You are one of my 20+. Please keep it going.

Here are my thoughts and recommendations concerning the e-mail:

Some items that the petition proposes to "fix" are very misleading. For example: the one about social security -- see Snopes:
http://www.snopes.com/politics/socialsecurity/pensions.asp

I agree with the proposal about medical care -- I think everyone in the US should be covered through the Government equally. The 30% of the money that the US spends on medical care "insurance overhead" could then either be saved -- our partially converted to improvements in actual care.

On the other hand, I think we do need some sort of financial incentive to compensate or reward people who are willing to devote a big chunk of their life and their time to serving in public office. In order to get to US Congress/Senate, they really need to spend time in a city, county or state legislative body, which often pays very little. US Senate & House pay needs to be better than the lower tiers of Government to attract the best from those lower offices, and compensate them for having to maintain two households.

Do you think the rewards are adequate enough to attract you into running for office? Would you risk spending years of your time working at lower offices, and then spend a lot of your money and time campaigning for a "shot" at the office? If we don't pay them well, all we will get are the people who are already wealthy, who can afford to spend the money to get into office or people who are "sponsored" by the wealthy or large contributors (or corporations). I think that situation would be very good for the right-wing, but not good for the true, grass roots of the country.

No, I think the absolute best way to "fix" congress is to extend their terms of office and simultaneously enact some term limits. Two year terms in congress is much too short to be able to learn "the job" -- It also requires much too frequent campaigning. When the country was founded, the congressmen had to make a long trip home to talk to constituents every two years. Now, with internet and CSPAN we are in continuous communication.

I could see Congressmen be elected for 5 years with 2 term limit and Senators have one 12 year term. That way, they won't be continuously campaigning, won't need to be raising money etc. They should receive a pension that is commensurate with their term of service -- but not exorbitant, of course. I believe I have seen e-mail circulate with similar provisions included.

Sunday, May 8, 2011

U.S. tax burden at lowest level since '58 - USATODAY.com

The latest news confirms what I've suspected for a long time. Our US taxes are very low. See this article in USA Today.

U.S. tax burden at lowest level since '58 - USATODAY.com

Our taxes are not only low from a historical perspective, but they are also low compared to the rest of the western world.

I'm not sure why they need to go lower? Our nation's infrastructure is crumbling --other countries have brand new or better roads, education, security, consumer protection etc. Why do we need to sacrifice? We can afford better!

Monday, April 18, 2011

Why we need a Value Added Tax (VAT) in the US

There was a recent Associated Press report that the super rich are paying even less income tax now and over half of the US pays no income tax. (See this link)
Can we continue like this? No, I don't think our current income tax system sustainable in the long haul. Not only are wealthy individuals able to dodge the income tax, the corporations are also avoiding taxes and doing even better! There was a good report on 60 minutes a few weeks ago about how all of the major corporations are now "offshore" and avoiding most of the state and federal income taxes. (If you didn't see it, click here: http://www.cbsnews.com/video/watch/?id=7360932n&tag=cbsnewsMainColumnArea.10

Our income tax laws are far too complex! They are welfare programs for the accountants and lawyers --and, of course, the tax preparers. Filing taxes invades our privacy, and makes us "guilty" until we prove our innocence by filing our deductions. The incentives in our tax system to encourage social improvements are no longer very effective because of the complexity in the system. For example, if I buy a new solar panel for my roof, what is the net savings in taxes? It is difficult to figure out without running Turbo Tax on a pro-forma tax situation. When an individual or corporation makes a decision it is not obvious what the tax implications of that decision will be. It used to be much more simple.
I think it is time the US converted to a Value Added Tax (VAT) similar to what most other Western nations use. It is self-auditing and easy to administer. It taxes "consumption" and rewards saving and conservation. It promotes quality products rather than "throw away" VAT also "taxes" the people who work "under the table" since everyone has to buy stuff. Illegal immigrants, drug dealers, smugglers, and homeless bums will all have to pay VAT when they buy something.
There should be a small tax on interest and dividends that is collected by the banks and corporations and deducted before being sent to individuals. Eliminate capital gains tax -- that encourages people to invest for the future, rather than spend today. That helps to reduce inflation.

A lot of economists like the VAT. See this article on CBS News. However there is plenty of opposition and resistance to change.
  • Liberals in US have traditionally fought against it because it looks like a "sales tax" and argue it would affect the "poor" more than the "rich" -- But helping the poor through taxes isn't as effective as direct help for medical, housing, education, or food.
  • Conservatives like the laws as they are, because they can take advantage of it and pay very little corporate or personal income tax.
  • All lawyers, accountants and tax preparation companies, of course, would be against a VAT for job protection. (Majority of our Congress/Senate are lawyers). The tax preparation companies have huge lobby budgets and contribute to most politicians re-election funds.
  • Most people wouldn't care or be affected on their "bottom line"--but we are all concerned that if a new tax (VAT) is created, the old one (income tax) should be completely eliminated --otherwise it results in simply more taxes and more complications. Once a tax is created, it is difficult to "kill" it.
A VAT will eliminate a lot of wasted effort in our economic system. For example: Most corporations need to keep two sets of books for tax laws. It will also discourage the "off shoring" of our corporations which is also just a big tax scam and waste.
Finally, it will put our companies on an equal footing with competitors in other countries. VAT doesn't have to be collected when the end item is exported which puts our US corporations at a competitive disadvantage.
Our taxation system is going to "choke" on the baby boom generation now starting to retire. As more of us retire, there will be a smaller percentage of workers with "taxable" income. However, since everyone "consumes" a VAT will be able to tax us baby boomers even though we're not earning much income.
I think it will be a tough sell to the US citizens to get a VAT implemented. However if we could get some real leadership in our Government, with careful explanation, I think it could be done. Maybe Obama could pull it off in a second term.