I recently read excerpts of a Jack Kemp speech published in a book by Morton Kondrake and Fred Barnes titled "Jack Kemp, The Bleeding-Heart Conservative Who Changed America. The speech was delivered in 1990 yet remains relevant today. It make me think and reflect. Below are some excerpts:
"If we are to present the example of democratic capitalism and the rule of law to the rest of the world, we've got to make it work for the low-income people and distressed neighborhoods and communities right here in our own country. It is not only Eastern Europe looking to us for market oriented answers. It is also East Harlem, East St. Louis, and East LA." He said that leaving those left behind was not only a moral imperative but a winning political strategy. "Whether it's called bleeding heart conservatism, capitalism with a social conscience or populist conservatism - it's the right thing to do, their right time to do it, and we're the right people to help lead it."
He disputed the notion of "America as two cities, one rich and one poor, permanently divided into two classes. America is not divided immutably into two static classes. But it is separated or divided into two economies. One economy - our mainstream economy - is democratic capitalist, market-oriented, entrepreneurial and incentivized for working families whether in labor or management. But there is ... a second economy that is similar in respects to the Eastern Europe or Third World socialist economy. It is almost totally opposite to the way we are treated in our mainstream economy and it predominates in the pockets of poverty throughout urban and rural America. This economy denies entry to Black, Hispanic, and other minority men and women into the mainstream, almost as effectively as hiring notices 50 years ago that read 'No Blacks (or Hispanics or Irish or whatever) Need Apply."
If someone wanted to create poverty and make people dependent on government, he said he would do what liberal policy had done. Among other things, reward welfare and unemployment at a higher level than working and tax the entrepreneur who succeeds in the legal capitalistic system much higher than in the illicit underground economy. Also, reward people who stay in public housing more than those who move to private housing and home ownership. Reward the family that breaks up rather than the family that stays together. Encourage debt, borrowing and spending rather than saving, investing and risk-taking. And, "most of all ... weaken and in some cases destroy the link between effort and reward."
Then Kemp turned to what he called the "good news." Government policies "can change and ... good policy can lead to good results ... The poor don't want paternalism. They want opportunity. They don't want the servitude of welfare. They want to get jobs and private property. They don't want dependency. They want a new declaration of independence."
He reiterated his agenda: to encourage investment, cut the capital gains tax rate and eliminate it altogether in enterprise zones. The capital gains tax reduction, he said, wasn't intended to help the rich or secure old wealth, but "to free up or unlock old capital and old wealth to help new business, new risk takers, job creation and economic growth." He advocated resident management and purchase of public housing units, a policy pioneered in Britain by Margaret Thatcher. And he proposed housing vouchers to allow poor people to choose their own housing, plus "a new version to tax reform to remove low income families from the tax rolls and dramatically increase the after-tax income of welfare mothers and unemployed fathers who go to work."
In 1948, at the median income, he said "a family of four paid virtually no income tax and only $30 a year in direct Social security taxes. This year (1990) the same family's tax burden would be over $6,000. To be comparable to 1948, the personal exemption - the tax allowance for nurturing children - would have to be well over $6,000 today. Instead, it is only $2,000." The elements of his speech, taken together, constituted the most comprehensive antipoverty program - and the most compelling critique of existing policy - ever offered by a conservative American politician.
So, where are the Jack Kemp's of today? There might be one in Congress that can take the mantle, perhaps has earned the right to the Jack Kemp mantle. Someone who worked for Jack Kemp, looked up to him as a mentor and has spent considerable time evaluating tax reform and more recently anti-poverty programs. That person is Paul Ryan, Speaker of the House. I hope to hear him sound a lot more like Mr. Kemp in the coming months and years ahead. The balance of economic conservatism mixed with true, heartfelt and realistic programs to help people that want to work and get out of poverty, makes all the sense in the world to me.
The Locker Room and The Senate
What does a college football locker room have in common with the US Senate? Nothing you say? That's probably true. Or at least that's the view of most people. But, let's explore this just a bit deeper.
The college football locker room is a sanctuary of sorts. It's where 100 men (and maybe a few ladies) from all types of backgrounds come together to achieve a common goal - beat their opponent on the field of battle. To accomplish that goal the 100 players, coaches, ball boys, medical professionals, etc., have overcome significant obstacles to rally together as a team. Racial boundaries do not inhibit teaming, economic differences do not incite jealousies, religious views do not get in the way, and political leanings do not block the natural tendency of a sports team to come together on game day. The enemy is very clear - it's the opponent on the gridiron. It's not any member of the one hundred in the sanctuary, the college football locker room. Diversity is a strength of the One Hundred. Trust, teamwork and discipline are values learned and shared.
Now let's look at the US Senate. One hundred strong come together in the greatest place for debate in the free world, the United States Senate. This is a place where open, honest, transparent discussion is encouraged. It's a place where passionate, smart men and women enact laws at the behest of citizens. It's a place where the very best of our country demonstrate leadership through sound argument backed by facts and persuasion of their fellow man. Well, that's what it's supposed to be. But it's not really a sanctuary, at least not anymore. Too often our Senators spew vitriol at one another, treat each other as the enemy or worse, stand and talk as the cameras roll in an empty chamber. It's no longer a place to get things done, to enact laws, to listen to opposing views, to rally together and improve the lives of citizens. Sadly, diversity is not a strength, racial barriers do exist, economic differences do cause jealousies, and the political ends of left and right no longer debate, no longer compromise, and no longer listen to one another.
One Hundred come together in a college football locker room with extreme clarity on a common goal, work together to achieve it and demonstrate good values along the way. One Hundred come together in the US Senate and show us everyday how small people can be. It seems our children can learn a great deal more from a college football team than they can from our elected leaders.
This one is long overdue. The tax system in our country is complex, costly and places an undue burden on the average citizen. The 1% and perhaps the top 5% do not share this burden because they can hire professionals to navigate the 70K pages of our tax system and leverage available loopholes to minimize the tax owed. To say the system is unfair and advantages the rich is just too easy. It's not that I am against the rich, quite the opposite. Our country was founded on taking risk, working hard, being innovative and "going for it". It's a country whose culture was based on "earning it". Sadly that last sentence is written in past tense because we are shifting to a country where too many people have stopped going for it, stopped earning it and now just expect it. Sad.
Let's get back to taxes. First, a confession, I am no expert on this topic, just a guy with an opinion. Secondly, I researched various proposals from presidential campaigns, some have details while others offer platitudes. Then I had a few beers and thought long and hard about the best path forward. I like Rand Paul's proposal which he calls "The Fair and Flat Tax". But ... and it's an important but ... with a twist.
You see, Rand wants to blow up those 70K tax pages and start over. He does not want to "change" or "adapt" the existing tax model. He wants to blow it to smithereens! That sounds like a great first step. His proposal is a flat 14.5% tax on individual and business income and elimination of all deductions except mortgage and charity (I believe). He would eliminate payroll taxes too.
Many others have proposed a flat tax and they differ by one thing or another. I like Rand's idea of just starting over with a very simple method. It's fair, simple and does not leave room for shenanigans by expensive accountants and lawyers. I am not tied down to the 14.5% number. If it needs to be 15% ok fine.
Now let's get to the twist. The one thing I don't like about the "Fair and Flat Tax" is the rich pay the same rate as anyone making more than $50K - for a family of four (below $50K there is no tax which seems right). That I don't like. You see, the rich people that I know and read about don't really mind if they pay a bit more. They don't mind if the tax percentage is graduated or progressive to some degree. They just want it to be simple, straightforward, and predictable. So, let's make up a few numbers. How about income above $1M pays another 5% in taxes, or 19.5% above $1M. That doesn't sound so bad. How about income above $5M we tack on another 5%. And that's it. We can use these extra monies from the $1M and $5M steps to help fund social security or medicare or bridges and roads. Whatever is needed. The rich pay a bit more which they are ok doing and the poor and middle class get a bit of a break. Most important, we drastically simplify a wasteful and complex system that is confusing and unfair.
Phew. This political stuff isn't all that hard. We just need to listen to some smart people that have thought about our most critical issues a great deal and add a bit of a twist to get it right. Surely our reps in congress and the senate can discuss, compromise and negotiate these things. Right?
I like to read and write stories that dig deep into characters and how they respond to challenges.