Five Simple Ways To Fix An Out-Of-Control Washington

[_Droopy]

http://www.forbes.com/sites/billfrezza/ ... ton/print/

An occupational hazard of op-ed writing is dealing with demands to stop complaining about the cliff our elected officials insist on racing toward, and instead offer suggestions on avoiding the calamity. Such suggestions would, of course, be politically infeasible, since throwing those elected officials over said cliff would lead the list. Yet in full knowledge of its abject futility, and only because readers asked, here is my proposal to salvage what’s left of history’s greatest experiment in democracy.

Personal Taxes and Income Redistribution

Replace our progressive income tax and our regressive payroll taxes with a unitary flat tax of 17% on income from all sources. Why 17%? Because that’s the largest number I can think of where tax avoidance and evasion isn’t worth the bother. It’s also big enough to fund a properly sized government. Under a flat tax productive citizens can focus on maximizing their incomes (and hence, tax revenues) while filling out their tax returns on a postcard, sparing our economy billions in unproductive distortions. Offer all tax attorneys and accountants one way tickets to China.

As a hand up to the working poor, the first $25,000 of income should be tax exempt. But there should be no other deductions or exceptions, period. Not for mortgage interest, not for charitable donations, and especially not for political donations. Capital gains should be taxed at the same 17% rate but indexed for inflation so that real gains are taxed and not phantom gains.

All entitlement payments should be subject to strict means testing, with both an income test and a net worth test. If your income exceeds twice the poverty line or your net worth exceeds the net worth of the median American citizen you should not be receiving any checks from Uncle Sam, period. No, you have not been paying “into” Social Security for years. Congress stole your money. Help yourself to some tar and feathers if it makes you feel better, you know where they live.

The Social Security retirement age has to go up to 67. With life expectancy longer than when Social Security was enacted, this is a no-brainer. Longevity deniers and trust fund illusionists need not apply.

Medicaid is an impossible problem to solve at the federal level, so pass the buck to the states with block grants. Let them experiment to find the best way to provide minimal levels of charitable care to the impoverished. Remove any mandates that tie their hands. Maybe some governor will figure it out.

That was the hard part. Now for the impossible part. Medicare has got to get out of the price fixing business. This is our only hope of engaging the innovative power of competition to control healthcare costs. As long as Washington bureaucrats set prices providers will game those prices instead of undercutting each other. The federal government has also got to stop making direct fee-for-service payments to doctors and hospitals. And finally, consumers need more exposure to the financial consequences of their medical choices through appropriate deductibles and co-pays. The only way to meet these criteria is by providing vouchers to citizens that can be used to purchase health care insurance. Again, these handouts have to pass the means test. Those of us that are not poor should pay for our own insurance.

In order to create a healthy insurance market all barriers to the interstate sale of health insurance policies need to be abolished, along with federal mandates on types of coverage. And, obviously, both ObamaCare and the corporate deductibility of employer provided insurance has got to go. Painful? Yes. But not as painful as watching the nation go broke.

Corporate Taxes and Corporate Welfare

Abolish the corporate income tax. It doesn’t bring in that much money and its destructive effect on U.S. competitiveness is legion. Have no fear class warriors, corporate profits will be taxed at 17% when they flow out to individual human beings as salaries, bonuses or dividends.

End all corporate welfare, green or otherwise. Ban all earmarks. Pass a federal law forbidding the government from writing a check to any corporation for any purpose whatsoever except for purchasing a product or service via competitive bid. Yes, this will put corporate lobbyists out of business. You can put them on the same plane to China as the tax lawyers and accountants.

Do these simple things and the economy will soar, unemployment will vanish, and we can get back to whining about executive bonuses instead of worrying about bread lines.

The Debt Ceiling and Discretionary Government Spending

Freeze the debt ceiling; then lower it by 10% every year. The federal government needs to live within its means and 17% of the gross national paycheck is means enough. If Congress can’t pass a balanced budget then across the board cuts should be applied to all federal programs to close the gap. This includes the salaries of every federal employee, including Congressmen and military personnel, with the proviso that if you cut a soldier’s pay his enlistment is immediately up and he is free to go home. If any other federal employee doesn’t care to take a pay cut, including Congressmen, they can do the same.

War, Peace and Defense Spending

The longest and most debilitating war that has to end immediately is the failed War on Drugs. Unless you are on the payroll of the DEA and fear unemployment, there are no rational arguments left to sustain this futile exercise in behavioral engineering. Our prisons are full, inner city streets are unsafe, and neighboring countries are melting down in gun battles. Let’s end the public safety problem caused by drug prohibition and deal with drug abusers the same way we deal with winos. And if you’re looking for new tax revenue, marijuana growers have actually volunteered.

Then let’s re-examine our wars abroad. We can no longer afford to carry the defense burdens of rich allies. Congratulations, we won the Cold War! NATO no longer has a legitimate purpose. Shut down those European bases and get out. Japan, Taiwan, Korea, Israel and any other country that has been getting a free ride needs to start relying on their own taxpayers for defense, not ours. Sorry, we’re broke.

Iraq has almost run its course. It’s time to declare mission accomplished (really, this time) and come home.

I have no idea how to end the festering mess in Afghanistan and neither did anyone else that waded into that benighted hell hole for the last two centuries. Frankly, I’m more worried about Pakistani nukes than Talibani nut jobs. Maybe it’s time to pull out the old “Peace with Honor” card, hand the keys to Karzai, and wish him good luck.

Do the above and you can cut the Defense Department budget in half. Not overnight, but in an orderly manner. It’s time to right-size our swollen military industrial complex to fit the modern world.

Social Issues

Nope. I’m not gonna go there. I have a message for you zealots on both the left and the right that live to foment culture wars. Put a sock in it. These battles are luxury goods and we can’t afford them right now. Circle back sometime when the economy isn’t in the tank and maybe we’ll listen to your rants. Until then get off the stage, you’re distracting everybody from the real issues. We certainly have enough of them.