Thursday, November 18, 2004

Suggestion for the Bush Tax Reform Plan

President Bush has indicated that he wants to simplify the tax code and create an ownership society. I share both aspirations, and offer this suggestion to correct an unfairness that has existed for a long time and allow people who don’t have much to invest, because of high taxes, a chance to participate in the ownership society.

Individuals pay more taxes than corporations with the same net income because corporation are able to deduct all expenses necessary to making a profit, while the limited exemptions and deductions afforded individuals don’t even cover their health insurance and state taxes, let alone basic living and transportation expenses. Data from a recent study by the Economic Policy Institute as computed from existing federal data for all states and metropolitan areas, show the realistic basic expenses of various households and the taxes they pay vs. what corporations pay. (See graph below) Because these costs have been tabulated carefully for many different family compositions and are region specific, such an exemption will be every bit as fair as the current complicated scheme of exemptions, deductions and credits. Families that earn just enough to cover essential expenses, that is, that have no net income over expenses, pay $800 to $1500 in federal income taxes.

We could simplify the tax code by giving individuals a realistic exemption for the basic income necessary to maintain their household, while retaining the option to itemize deductions if unusual expenses exceed this threshold. This would eliminate many households from the tax rolls, permit many others from having to itemize deductions, and allow all individual taxpayers to invest the savings in the ownership society. Once they are part of the ownership society, with low taxes on investment income, they will be less dependent on government handouts and not as dependent on their wages which are not keeping up increases in the GDP.

This change could be revenue neutral if the wide array of deductible expenses and tax loopholes were eliminated along with the increase in the exemption.

Monday, November 08, 2004

Advice to Democrats after the 2004 Election

As usual, a lot of Democrats are acting as if the world is coming to end because they lost the electoral college by less than 100,000 votes in Ohio. The protesters are back organizing to cut and run before we know if Iraq can be stabilized. The “back to Bubba” crowd is longing for another Clinton or Carter to get some of those religious votes that we all know belong lock, stock and barrel to the Republicans. They remember the intelligent, articulate, charismatic Clinton and forget the sleezeball, bible thumping Bubba that couldn’t keep his pants up and brought us NAFTA and amnesty for illegal aliens. They remember the Carter who promised us hope but delivered malaise. And they’re now using all the Republican weasel words like faith, values, and morals to become more acceptable, forgetting that they are the ones holding the moral high ground defending the poor, the middle class, and persecuted minorities. Here’s my advice if you want to win the next round.

Look at yourselves and decide who you are, and not just what you want to win. Speak clearly and concisely about what you represent and do not try to be on every side of every issue. Make a distinction between religion and morality. You can be moral without being religious, and you are. You can tolerate and accept personal religious belief and expression without tolerating religious extremism, superstition, and destruction of the wall between church and state. We all have values. My portfolio has value. I value my privacy, my liberty, my friendships, my community, my country and my way of life. Your values are just as worthy as anyone else’s values and you should define them and speak up for them.

In the realm of politics, be who you are and spend your time cultivating the cultures where you can be successful. Forget the Bible Belt and Mormonland (Idaho, Utah, etc). You will never succeed in these places where religious literalists dominate. Keep an eye on Florida where more and more people from the east and Midwest retire and where the culture becomes more urban year by year. Watch states like ND whose congressional delegations are all Democrats but will vote for a born-again bubba over a northeastern liberal. But concentrate on the interior margins of the blue states where races were close – Nevada, New Mexico, and particularly the Midwest where the only other state you needed to win was Ohio. If given a reasonable choice they’ll usually vote their pocketbook.

Don’t pick Bubba candidates thinking you can win back the Bible Belt. Don’t pick candidates from the Northeast or California, including Hillary with all her baggage. Not that there aren’t good candidates there, but it’s liberalland and Hollywoodland and it scares the daylights out of some voters that you could otherwise bring into your camp, and you have those areas in hand. Your best bet for next time would be a ticket like Evan Bayh/Barach Obama. The Midwest is where you can make inroads. Midwesterners are largely political moderates. They are quite practical people who are concerned about their economic welfare at times like these.

Keep your extreme liberal wing in check. It can bring you nothing but losses. People are interested in preserving the environment, but they’re not interested in blowing up all the dams during our energy shortage to save some snail darter or make it easier for white water rafters. Promote a gradual process of energy diversification. This is not going to change overnight. Compromise on wilderness areas vs. logging and recreation interests. We need to preserve wilderness, restore polluted areas, preserve clean air and water, but not at the exclusion of maintaining a stable economy and allowing people to experience nature. Participate in the Kyoto process for global hydrocarbon reduction, but drive a hard bargain to make the process compatible with preserving our way of life. Pick your time and place for protests. Too many of them water down the effect and may antagonize more people than they persuade.

Socialism and communism are dead. You are still being characterized by Republicans as socialists, backers of big government programs, and big spenders. You are no longer the big spenders. The Republicans are. I don’t think you advocate the ownership of industry by the government or believe that America is the antithesis of everything good, so don’t hang on every word of old die-hard socialists like Noam Chomsky. There are certain things that government can do better than private industry, like seeing that everyone is treated fairly, has equal opportunity to prosper, a decent education, and adequate food, shelter, and health insurance. This can be a cooperative public and private effort. But, don’t kill the goose that lays the golden eggs by strangling business and innovators with unnecessary and cumbersome regulations. Campaign against corporate welfare and abuse as strenuously as your campaign for equal opportunity. Get on board to simplify the tax code in a way that is equitable for everyone but will prevent the drain of billions for compliance. And, finally get straight on upholding the laws. It’s not acceptable to break the law to get votes or avoid the wrath of your favorite constituencies. Get on board to uphold the laws against illegal immigration, and curb the abuse of the legal system with reasonable tort reform.

My Experience in the Red and Blue Cultures

As some of you know I was raised on a farm in a now red state, ND. The nearest town where I went to school was about 300 people until I was about twelve years old. At the time, ND was neither Republican nor Democrat. It was NPL, the Non-Partisan League, which a majority of residents belonged to. So my parents voted for the NPL guy. At the time mothers were essentially apolitical, having too many kids to attend to, too many clothes to wash, canning to do, cows to milk, etc. and they hadn’t had the vote for too many years at that time. The little town of Tioga had two Lutheran Churches and a Catholic Church. No synagogues or mosques. There was some minor feuding among the Lutherans over which had the right version of the faith, but nothing that would disturb the tranquility of the little village and the surrounding farm community. My father was the treasurer of one of the Lutheran churches for many years. He wasn’t that religious that I could tell, because before he got the job I recall us going to church about twice a year, on Easter and Christmas. But he was a dutiful servant, dressing up in his Sunday best to count the collections every Sunday once he got the job.

Of course, we kids were required to go to Sunday school, get confirmed (catechism), and go to the baccalaureate (religious) ceremony upon graduation. Since everyone else did, and particularly the girls we were interested in, we went to bible camp a time or two and belonged to the Luther League youth organization. All the wives belonged to the Ladies Aid which put on the pot luck dinners after all the weddings and funerals.

My first adverse reaction to the religious “treatment” came at one of the bible camps. Long daily sessions at the disposal of strict clergy had me convinced after a couple weeks that either I was going the hell or I better start believing in Christianity. Fortunately, I had a lot of friends, most who didn’t attend, who starting ribbing me about my transformation, and after a few more weeks I was back to being a normal kid.

Up until my sixth grade, there was nothing about this rural experience that interfered with my conforming to societal norms. Everyone from the farm community thought essentially alike, and not just in Tioga, but in all the other little villages as far as one could travel in those days. Everyone was from similar European backgrounds, settled the area together, and carried on the same religious and cultural traditions of the old country. But in the summer between my fifth and six grade, my first cultural change occurred. An oil company prospecting in the area struck oil on a farm a few miles south of Tioga. By fall the town had close to doubled in population, and we were sitting two to a desk in my sixth grade class. Most of these new kids were different! They spoke funny, liked some foods we had never heard of (okra, black eyed peas, grits, collard greens, etc.), had a different attitude towards blacks, (We didn’t call them that at the time. There was another word that was popular then.) and God forbid, they were building a Baptist church right in the middle of town! Other than that, they were pretty much like us, from rural places with similar values and we started to get along just fine. I recall we discussed race relations quite a bit, and had completely different perspectives on the subject. I had only met one black person up to that time. His name was Joe Bond, and he worked the harvest circuit from Texas to ND every fall, and my father owned a threshing rig so we got to meet all the “strangers”. Joe was a real oddity to us. And I remember the time we had a hearty laugh when my father was paying off the crew and he asked a guy for his name and he said “Stubblefield”! Having met only a few people whose names didn’t end in “son” at the time, this struck us as pretty hilarious. This guy certainly was in the right occupation, spending most of his time in stubble fields loading shocked wheat bundles into his wagon and hauling them off to the threshing machine.

As time passed, the NPL was absorbed into the Democratic party, causing some more independent souls to join the Republican party. As I recall, my father, who had voted for Henry Wallace in 1948, became a Republican until the late fifties, when he switched to the Democrats. It all depended on who was supporting the small farmer the best. At the time most people voted their economics, not their religion.

Then I moved to the big city. What a shock! Never having been very far away from Tioga, I headed out to CA with a buddy of mine in my new 1957 VW bug loaded to the gills with practically everything we owned, and we set up shop in Inglewood, CA which at the time was the most white town in SoCal. Boy, did I meet a lot of “different” people. But I relished it, not realizing that some of these different people were thinking, who is this hick from the sticks with this sing-songy accent. I didn’t know anything about other cultures or what they valued or accepted. It wasn’t until I was up at Berkeley finishing my education where I came to the shocking realization that a girl I was dating, who liked me quite a lot, and we always had a good time every time we went out, informed me that we couldn’t let the relationship go any further because she was Jewish and it was not accepted at the time for her to stray to far from her heritage. This was a real eye opener for this green as grass farm boy from ND. Up until that time I really hadn’t realized the substantial impact culture and heritage could have on people.

After 45 more years of water under the bridge I think I have become pretty wise to the ways of the world and understand the difference between people who have had a wide range of cultural experiences and those who have remained in their original culture most of their life. It think it accounts for quite a few of the differences in the red and blue cultures. I should point out that there are really no true red or blue states, or even red or blue counties. I think it’s primarily red rural areas and blue urban areas. There are still very red areas in CA, like the San Joaquin and Imperial Valleys, while the urban areas are very blue. Even in Nevada, Clark County (Las Vegas metro) is blue and everywhere else is mostly read.

I think this can be explained by the people born in cities or moving to cities eventually encountering a wide variety of races, religions, cultures and values. You come to realize that the values you were raised with might not be the only values that are meritorious, and that you may hold prejudices against strange people, values, and behavior. Your devotion to a religion you may have grown up with is challenged when you see that people having a different religion or no religion at all are equally good people and treat you as humanely, friendly, and respectful as those of your own stock. It’s like the old adage that people who don’t have mountains, make mountain out of molehills. Even if they are essentially alike they find small difference to separate them from others. Whereas experiencing great diversity tends to wash out small differences and make only substantial difference important.

Some people, more than others, long for simplicity and eschew complexity. They long for the time when things didn’t change as quickly or as much. Or they long to get back to simpler times and recapture simpler values. They seek simpler answers and a more specific plan for how to cope. But, the past is past and the future is more complex. We know more about the world, more about people, more about how things work, and what’s real and what’s myth. In my opinion it is time to cast off our longing for the past and our fear of the future and look to make changes within ourselves to adapt a world that is changing ever more rapidly.

Words we once considered offensive are no longer considered offensive to some but more offensive to others. Behaviors that once were unacceptable become more acceptable to a larger number of people. We should closely examine whether we are resisting these changes because they are remnants of a past tradition that no longer serves us as well, or because they are genuinely destructive to our future. What is often referred as elitism among urban people by those with a narrower cultural experience is probably no more than a recognition that change is less threatening to them, and they can’t understand why people who haven’t had their experiences are so resistant to change and so protective of values and traditions, which they see as having outlived their usefulness. To bridge the gap between the red and blue cultures will require greater understanding of one by the other and less resistance to changes which are almost sure to be upon us sooner or later and which may actually enhance our life experience.