Tuesday, March 8, 2005

On Election Financing

Election finance "reform" attempts to reduce the influence of special interests on elections. I'm all for that, but I also recognize that water will seek its level. Money will find a way. In addition, artificially controlling donations to any political candidate, campaign, party or cause is a clear infringement on the right to unfettered political speech guaranteed by the 1st Amendment to the US Constitution. I reproduce that Amendment in full here.

Amendment I: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

My proposal for election financing includes no artificial, anti-market controls and employs full transparency to enable political market forces to control who gives how much to whom.

1. Only eligible human voters may donate to candidates for election, political parties, or campaigns that attempt to influence public policy.

2. Donations may be in any amount, and made as frequently or seldom as the donor may wish.

3. No non-human entities (corporations, etc.) may donate any amount to any candidates for election, political party, or campaign that attempts to influence public policy.

4. All donations, no matter how small or frequent, will be reported in a public forum, such as the Internet, as they are received.

Item 1 excludes donations from foreign sources, or those who have not attained full citizenship, or have had their civil rights revoked (for committing a felony, as an example.) However, I am open to the idea that any law-abiding resident of this country, not just citizen voters, could legally donate.

Item 2 eliminates the need to shuffle money to employees or family members to increase a donor's total giving potential.

Item 3 addresses concerns about undue influence by lobbyists. However, a CEO, board members, or other officers and employees would still be able to donate any amount, somewhat limiting the benefits of this restriction. I am open to removing this rule.

Item 4 is the key to accountability for this whole scheme. It's based on the expectation that a candidate or party will research the opposition's donors and donations, bringing potentially embarrassing contributions to light. For example, a populist candidate running on the "little guy" platform could embarrass an opponent who takes large contributions from wealthy donors. A party that emphasizes cultural values could point to a preponderance of donations by Hollywood producers and celebs to the opposing party or candidates.

Unlimited donation amounts and full transparency are the keys to creating a public market for political finance.


Here are some web sites that already use FEC or public disclosures to help voters see who's getting money from whom:

  • Change Congress - Lawrence Lessig, a professor at Stanford Law School

  • Fundrace - Look up who your neighbors are donating to, from the liberal Huffinton Post site

  • Opensecrets - Center for Responsive Politics' site

Monday, March 7, 2005

On a Flat Tax

The current US income tax code is bloated and filled with money for special interests, within and outside of the government, and must be simplified. Taxes are necessary for a government to administer its functions, but that doesn't mean they should be onerous or seemingly arbitrary.

Some components of the tax code have unintended consequences (well-meaning child tax credits that get spent on big screen TVs rather than food, clothing, and education), have unfair inconsistencies (the marriage tax, where couples filing jointly pay more than if they filed separately), or intentionally kick families while they're down (by the inheritance or "death" tax). The escalating scale that increases taxes on those who work diligently to improve their lot in life and earn more is immoral.

Other tax policies attempt to reinforce beneficial behavior (for example, the mortgage interest deduction that encourages home ownership). Special dispensations written into the current code are misplaced. Beneficial behavior should be encouraged on its merits, not encouraged by bribery.

A predictable tax environment is necessary to efficiently run any business or plan any family's budget. At the same time, liberals exert pressure to raise federal, state and local minimum wages with willful disregard for the laws of the marketplace and the long term effects on labor flexibility.

Something must be done to simplify the US income tax, and control the upward pressure on mandated minimum wages.

Sales taxes affect people unequally based on their consumption, and have the effect of discouraging purchases, thereby reducing the velocity of money through the economy. European value added taxes (VAT) are similar to a sales tax added at each stage of production, with the added insidious nature of being hidden from view: out of sight, out of mind. Hidden taxes such as VAT, or gasoline taxes included in advertised per-gallon prices, are too easily raised.

As sales taxes are often the only source of income for local municipalities, cities and towns too often resort to the tactic of increasing sprawl to create new opportunities for retail which can be taxed.

I also recognize that some folks need to be helped along as they start careers, or in times of need. The tax code should still account for some amount of welfare, or remittances to low income families.

Here's my proposal for a fair tax system for individuals. This could be extended to corporations (though I'll save the discussion of double taxation and whether companies should be taxed at all for a later time).

1. No sales taxes, no VAT. No hidden taxes!

2. Revenue from each taxpayer is shared proportionately at all political levels the taxpayer inhabits: federal, state, county, city. To collect more money, governments must help their citizens earn more money

3. A flat income tax is based on all income from all sources, with no deductions. And no loopholes!

4. The poverty level is defined as a typical annual salary (2080 hours) at minimum wage. This amount is subtracted from total income.

5. A low fixed percentage (defined either constitutionally or legislatively) of the resulting adjusted income becomes either the tax owed (positive amounts), or the welfare received (negative amounts).

6. The tax (or welfare) could be collected (or paid) in quarterly, monthly, semi-weekly, or weekly installments to simplify financial planning.

Here are some example:

- If minimum wage were $6.00 per hour, the poverty level would be $12,480 per year.

- A person who earned $46,000 at a 10% flat tax rate would owe $3,352 in taxes.

- A person who earned $1,000,000 at 10% flast tax would owe $98,752.

- A person earning minimum wage would pay no taxes.

- A person who earned $5,000 at a 10% flat tax rate would be paid $748 in welfare.

This system is fair to the aspirations of all earners, while not burdening those making minimum wage with any taxes whatsoever. It has an added benefit of eliminating tax loopholes, with the effect of keeping down the tax rate.

(Note to those who are stuck on unfair, "progressive," increasing-scale tax rates: even this flat tax is ever so slightly progressive due to the fixed deduction. The million dollar earner actually pays at a 9.8752% rate, while the $46K earner actually pays at a 8.38% rate. The same relationship is true for any given nominal flat tax rate, though exact resulting rates will differ.)

Catching Up: On Larry Summers

Lawrence Summers is a former Clinton administration official, and the current President of Harvard University, a private school. Summers has come under fire for suggesting at a recent conference that physiological differences between men and women may somehow cause women to be less successful in maths and sciences. Summers has apologized time and time again to the politically correct police, seemingly to no avail.

My view on his comments is that, at worst, they are a waste of time. Summers' suggestion has likely been disproved or minimized by research.

There can be no doubt about actual physiological differences between men and women: just drop the pants or lift the skirt for evidence! However, as someone who had to struggle with the difficult coming out process which requires you to readdress accepted gender roles, it is also obvious to me that men and women are subtly (and not so subtly) expected to fill certain roles from childhood by their parents, friends, and every other human on earth.

The human mind excels at categorization. Cultures around the world have found benefits in efficiencies created by allowing assumptions about the roles of strangers and friends alike. For some reason, Western culture has generally found an efficiency in something as analytically arbitrary as men wearing pants and women wearing skirts, or driving on the right side of the road. As with any rule, these assumptions will have any number of exceptions, may be counterproductive, or even proven wrong.

The subtle nature and constant reinforcement of cultural roles can make them feel as if they are actually laws of nature, rather than nurture. Though physiological differences between the brains and bodies of men and women do exist, culture cannot and should not be discounted. Women should be encouraged to excel in traditionally male enterprises, and men should be encouraged to excel in traditionally female enterprise. We've got plenty of work to go around.

This is not to argue that any cultural norm should be arbitrarily discounted or discarded just because it is widely or narrowly held, or even truly useless. The social contract we enter into in order to make sense of our world requires that we maintain mores, taboos, laws, and even presumptions about our relationships with the people around us. But on matters of whether men or women can apply themselves to various areas of endeavor, we should expect only the best.

Larry Summers should not be fired for simply wasting time.

Catching Up: On Ward Churchill

Ward Churchill is a professor at the University of Colorado, a public school, who has recently come under fire for comparing victims of the 9/11 World Trade Tower victims to Nazis in a 2002 essay. Churchill continues to defend his position. Recently, the University president has resigned under stress.

Some have argued that Prof. Churchill was simply making a statement on the complicity of some fictional "common American" to policies Churchill violently disagrees with. His statements have also been defended as simply "controversial" and a matter of free speech (regardless of whether free speech requires public funding by way of the professor's $96K annual salary).

Those arguments miss a fundamental truth that I haven't seen noted anywhere else. The basic truth is: the professor's statements are simply factually wrong. Try this comparison: if a math professor claimed 1 plus 1 was 5, insisted on teaching his students this lie, and continued to defend the lie when it was brought to light, that professor should be fired.

Similarly, Ward Churchill should be fired.

The Year of the Vote

Though March is too early to start declaring 2005 the year of anything yet, I hope this year will be remembered as the Year of the Vote in the Arab world.

Last October saw national voting in Afghanistan, a country previously invaded by the Soviets, then oppressed by theocratic thugs the Taliban.

Early January saw Palestinians voting in the first truly free election made possible by the death of the most significant block to peace with Israel: Yasser Arafat.

Late January saw hugely successful voting across an Iraq free from Saddam's threats of torture and death, contrary to the dire predictions of those who wanted to delay that vote and give terrorists more time to consolidate their reign of fear. (Interestingly, the Iraqis actually voted for their representatives to a constitutional convention. The product of that convention likely will call for a new vote to elect the actual representatives of the government it defines.)

The Saudi ruling family even allowed limited, male-only voting in February local municipal elections.

Egypt's Mubarak has loosened his restrictions on allowing political opposition in his country's upcoming elections.

The Lebanese have found a new assertiveness, calling for Syria to evacuate its occupying troops. The Syrian puppet regime in Beirut has resigned.

None of these advances for democracy were even thought possible by proponents of the old status quo, never-ending negotiations approach to Middle East peace that had failed the region for more than 35 years. Despots understand only one language: the language of force. It was high time that we quit pussy-footing around the true impediments to progress in the Middle East. It was time that the leftist racism of low expectations that considered Arabs not ready for democracy was finally disproven. It was time that the aspirations of regular folks trying to make ends meet while staying below the death squad radar was recognized.

The Bush doctrine of domino democracy (and the fortuitous death of Arafat and it's flawless handling by the Israelis) has provided the tipping point to a lasting, peaceful realignment and redevelopment of the region.