Critics of Donald Trump once counted tax evasion among his many faults. But it turned out that he wasn’t breaking any tax laws. He was simply utilizing the complex web of exemptions, deductions, and other rules available to reduce his tax bill to near zero.
It would be hard to imagine a worse tax system than our federal government’s. It is based on taxing economic productivity, which in a free-market system, benefits us all. Politicians use taxation not only to generate revenue but to pursue a grab bag of policies ranging from welfare programs to “climate change,” home ownership, and subsidization of state and local taxes.
The tax code is hopelessly complex and expensive to operate. Individuals and businesses spend around $37 billion and over 3 billion hours annually in tax compliance, up to 10 times as much as taxpayers in other wealthy countries.
Phil Gramm was right 25 years ago to suggest that the best option would be to scrap our entire tax system and replace it with a single national sales tax. He didn’t succeed, of course, but the concept is so sound it still remains active in academia, think tanks, and government white papers.
Representative Buddy Carter introduced the Fair Tax Act of 2023 in Congress this year and was promised a floor vote. This bill would eliminate all personal and corporate income taxes, payroll taxes for Medicare and Social Security, estate and gift taxes, as well as the Internal Revenue Service itself.
Instead, there would be an effective 30 percent consumption tax, but households would get a tax rebate check each month adjusted for family size and income. The rebate would have the effect of exempting all purchases up to the poverty line from taxation. The tax rate and rebates could be adjusted to make the tax revenue neutral and roughly as progressive as our current structure.
Still, Democrats and their media buddies immediately attacked the proposal as “tax cuts for the rich, period” and a “Republican dream to build a wealth aristocracy.” Even the Wall Street Journal criticized it on political grounds, worrying that even though it “made sense,” it might hand Democrats a juicy campaign issue.
But its critics, perhaps intentionally, misunderstand the bill. Americans would not on the net pay more taxes. Nor would low-income earners be punished. The tax burden wouldn’t grow but only be redistributed.
Outsized deductions and other tax shelters would vanish, meaning the ultra-wealthy and the big spenders would pay taxes more appropriate to their incomes. Savers would obviously benefit. Investments could grow tax-free.
Some critics argue that tax evasion would be a problem. But that’s true of any tax scheme, including the one we have now. The IRS estimates that Americans underpay their taxes by $500 billion annually, in addition to the billions of fraudulent claims in programs like the Earned Income Tax Credit.
The Fair Tax wouldn’t have to be perfect to be more efficient and less cumbersome than our current system of self-reporting buttressed with audits. Avoiding the stressful hassles with the IRS would be a welcome relief to many Americans.
A more substantial concern is that future legislatures may try to augment the consumption tax by adding back income and other taxes so that we end up with the worst of both worlds. A constitutional amendment prohibiting an income tax would be preferable. Otherwise, careful consideration must be given to rigid self-activating safeguards to protect taxpayers.
The Fair Tax has never passed because of political opposition from groups that have too much to lose by giving up the status quo. Yet if government wants to subsidize things like housing, electric vehicles, or healthcare, it would be more transparent and accountable to appropriate the money rather than disguising it as a tax deduction or credit. Likewise, if Americans want to financially support charitable causes, and they do, they should do it with their own money, not a partial government subsidy that comes with strings attached.
Tax reforms are always opposed by those who benefit from the current structure. But the Fair Tax would be a far more equitable and transparent way to fund government. It deserves a look.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
While the White House touts the success of “Bidenomics,” American families are drowning in debt, especially on credit cards. The latest data from the Federal Reserve Bank of New York show Americans ended the first half of this year with over a trillion dollars of credit card debt for the first time ever. At the same time, credit card interest rates are at record highs, pushing many Americans to the financial brink.
How we got here is a lesson in basic economics, something the Biden administration has willfully ignored.
Contrary to the White House talking points, President Joe Biden did not inherit a “reeling” economy and inflation was not “already there.” When he entered the Oval Office, the economy was growing at a $1.5 trillion annualized rate and inflation was 1.4 percent, comfortably below the Federal Reserve’s target inflation rate. But Bidenomics changed all that.
In just a year and a half, Mr. Biden managed to deliver two consecutive quarters of negative economic growth (a recession). Moreover, inflation reached 40-year highs, with prices rising in a single month about as fast as they rose in the entire year before Biden took office.
This is the bitter fruit of the Bidenomics tree. The seed was trillions of dollars in excessive government spending; it was watered with trillions of borrowed dollars and fertilized by the Fed’s printing trillions of dollars. The results are fast-growing prices, a sluggish economy, and family budgets getting squeezed.
Since Mr. Biden took office, prices have risen about 16 percent, but average hourly wages have risen less than 13 percent, and average weekly hours have been cut back. That has left the average American with an effective pay cut of about 5 percent, and families have been using credit cards to make up for that lost purchasing power.
In just two and a half years, outstanding credit card balances have exploded 34 percent, but it gets worse—much worse. The Fed has been steadily raising interest rates to combat the very inflation which it helped cause. That has pushed up borrowing costs, especially on credit cards; their average interest rate is now at an all-time high.
The combination of large balances and high interest rates is a financial death spiral for many American families. When the financing charges on your credit card bill are equal to or greater than what you can afford to pay each month, it becomes impossible to pay down your balance. You are effectively trapped in debt. On top of the higher cost of living, you’re now paying higher financing charges too.
And it’s not just credit card debt that has exploded during Bidenomics. Consumer spending during the last two years has been partly fueled by higher balances for auto loans and mortgages, the latter of which has grown almost $2 trillion in just two and a half years.
Mr. Biden’s false promises of a student loan bailout along with a moratorium on student loan payments have also encouraged young people to take on additional debt for schooling and not pay those loans back. In fact, instead of using the savings from the moratorium to responsibly pay down their debt, most borrowers have been further increasing consumer spending.
American families going deeper into debt is a hallmark of Bidenomics, so much so that even members of Mr. Biden’s administration are beginning to say the quiet part out loud. Vice President Kamala Harris recently claimed that most Americans would go “bankrupt” if they had a $400 emergency expense.
While there is no evidence to support Ms. Harris’ claim, her statement is an indictment of the administration’s economic agenda. For most Americans, a much more likely scenario than bankruptcy is that they would have to put that emergency expense on a credit card—which many families have already had to do.
The squeeze on Americans’ family budgets will continue until we clean up the federal budget. If Washington doesn’t cut trillions of dollars in spending, the bills will keep piling up, both at the Treasury, and in your mailbox.
E.J. Antoni is a contributor to The Daily Caller News Foundation, a public finance economist at The Heritage Foundation, and a senior fellow at Committee to Unleash Prosperity.
Clean and accurate voter rolls are a cornerstone to safe and secure elections. And they are required by both state and federal law. Section 8 of the National Voter Registration Act (NVRA) specifically obligates states to conduct a general program that makes a reasonable effort to remove the names of ineligible voters from the official lists of eligible voters due to death or change of residence. The U.S. Supreme Court even backed this up in its 2018 decision in the case Husted v. A. Philip Randolph Institute.
But Arizona’s current Secretary of State Adrian Fontes and its former Secretary of State (now Governor) Katie Hobbs have failed to perform the necessary voter list maintenance. And right now, 14 Arizona counties are in violation of Section 8 of the NVRA…
Is the much-hyped “energy transition” starting to crumble at its foundations now? In recent weeks we have seen the following:
Ford Motor Company warns investors its electric vehicle division will lose $4.5 billion in 2023;
Reports that China has commissioned another 50 GW of new coal-fired electricity generation capacity;
The British government led by Prime Minister Rishi Sunak beginning to back away from absurdly aggressive transition timelines amid public outcry over rising energy bills and other deprivations;
The German government continuing to reactivate mothballed coal plants and facilitating new mining for coal;
The Scottish government forced to admit it has facilitated the felling of 16 million trees in this century to make way for new wind farms;
The Japanese government moving to reinvigorate its own coal-fired power sector;
Global demand for crude oil rapidly growing and outpacing supply growth, surprising all the supposed experts;
The U.S. Department of Energy forced to admit its initial estimate of consumer “savings” from converting from gas stoves to more expensive electric models was grossly overstated.
This list could go on and on, but the macro view is clear: Everywhere one looks, the aggressive timelines and heavily subsidized plans for a rapid transition are falling apart. Nowhere is the dynamic becoming clearer than in the wind industry.
In an Aug. 7 report titled “Wind Industry in Crisis as Problems Mount,” the Wall Street Journal catalogues $30 billion in planned investments in new wind projects in the U.S. and elsewhere that have now been delayed due to an expanding variety of factors. “After months of warnings about rising prices and logistical hiccups, developers and would-be buyers of wind power are scrapping contracts, putting off projects and postponing investment decisions,” the story says, emphasizing that the problems are becoming especially severe in the offshore wind business that has been so heavily promoted by the Biden administration.
I wrote a story in July detailing the fact that some of the so-called “Big Oil” companies have recently made big inroads into the offshore wind business, winning bids in the U.S. and Germany for licenses to develop large projects. But the Journal’s story quotes Anders Opedal, CEO of Norwegian oil giant Equinor, saying, “At the moment, we are seeing the industry’s first crisis.”
Along with British oil major BP, Equinor has plans in place to develop three wind farms off the Atlantic coast of New York, but recently warned state officials they would need to renegotiate power prices or the projects would not be able to obtain the needed financing. This demand by the two oil companies echoed a call by traditional wind developer Orsted in June for more subsidies from the U.K. government if its planned projects in the North Sea are to remain viable.
Make no mistake about it: Developing these offshore wind projects doesn’t come cheap. Orsted pulled out of a competitive bidding auction in Germany last month for government licenses to develop 7 GW of new offshore wind capacity when BP and French oil major TotalEnergies ran the final bids up to almost $14 billion.
“Orsted very deliberately chose not to pay record high concession prices for new offshore projects in Germany,” Orsted CEO Mads Nipper said in a post on LinkedIn. Orsted objected to the process that awarded the licenses based on the willingness of developers to pay the government for the right to develop — the same process used in oil and gas leasing all over the world — rather than the government offering more and more subsidies to incentivize development.
Therein lies the central conundrum for this subsidized transition: At some point, wind, like solar, electric vehicles and all the other rent-seeking solutions being promoted in this energy transition will have to become viable without an expectation of permanently rising subsidies, since governments already seeing their credit ratings downgraded due to overwhelming debt won’t be able to just keep printing money forever.
But, at the present moment, the business models in play do not appear to be headed for that outcome. And that’s why this energy transition seems to be falling off the rails.
David Blackmon is a contributor to The Daily Caller News Foundation, an energy writer, and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
“The Department of Education shall terminate on December 31, 2023.” If you’ve read this far, you have completed HR899, introduced by Rep. Thomas Massie.
Abolishing the DOE isn’t a new idea. The department was created in 1979 by the Carter administration, fulfilling a campaign promise to the NEA, the teachers’ union, which in turn gave him their first ever presidential endorsement.
But skepticism over the department was present even at its inception. The bill passed by just four votes in a heavily Democratic House. Ronald Reagan, always concerned about over-centralized power, immediately campaigned to unwind it. Several Republican education leaders since have endorsed its elimination.
1979 hardly marked the beginning of a glorious new age for American education. Per pupil spending on education since then has more than tripled, inflation adjusted, but there is little to show for it.
Achievement scores have been stagnant and still lag many of our peer nations in the developed world. The racial gap in academic achievement persists in spite of the department’s high-profile efforts. The bureaucrats and interest groups receiving the funding are fine with it, of course, but for the rest of us, it hasn’t accomplished much.
The DOE isn’t really designed to make an impact. It doesn’t establish or approve a curriculum. It doesn’t operate one school or educate one student. It doesn’t administer or create tests. It doesn’t establish standards for colleges and universities. We wouldn’t want it to do any of those things, but it naturally raises the question: is the DOE needed at all?
The department has over 4,000 employees who do research and write policy papers on education that are read mostly by each other. They administer the beleaguered student loan program and federal aid for education. Over 500 workers toil in the Office of Civil Rights.
Senator Joni Ernst notes that 94% of the DOE‘s staff were deemed nonessential during a government shut down. As one official summarized, “it really is just a grant making entity with a huge bureaucracy.”
Americans rightly respect the importance of education and are apprehensive about failing to support anything labeled “education.” The department doesn’t stir public animosity like Justice, Homeland Security, and other cabinet departments often do.
J. Luke Wood, president of Sacramento State University and a former professor of education at San Diego State University, asserts the attempt to eliminate the DOE has nothing to do with federalism or any legitimate substantive argument. No, the real motivation is…racism!
Yes, those darn Republicans are at it again, advancing unrelated pseudo-arguments to provide cover for their race hatred. They are engaging in “racelighting” i.e., racial gaslighting which is an “act of psychological manipulation where people of color receive racial messages which distort the realities and lead them to second-guess themselves.”
Opponents claim HR899 is just an attempt to shape curricula that teach a “fairy tale” history, omitting the ills of slavery as well as ignoring Jim Crow, miscegenation, and redlining. Furthermore, they say it is purposely intended to strip civil rights protections for minority students.
Yikes! Just being around Republicans, you would never imagine that they are such over-the-top bigots. Then again, maybe it is Professor Wood and his ilk who are the racial dividers, seeing racism as the explanation for nearly everything.
If they are so concerned about the civil rights of minority students, why not embrace school choice and charter schools? These reforms have demonstrated their capability to actually improve educational outcomes and lift children out of poverty.
Some see HR899 as a quixotic endeavor. Maybe it is. Bureaucracies, whatever their failings, are skilled, aggressive, and usually successful at defending themselves.
But there is one overarching reason why the DOE needs to go. We can’t afford it.
America is in big trouble financially. We have normalized intergenerational fiscal theft to finance so much wasteful, politically motivated spending that we are now $32 trillion underwater. Interest on the debt is crowding out other priorities and $50 trillion is in view. Still the Biden administration, with an election looming, continues to propose yet more new spending programs.
Instead, we should be desperately seeking out nonessential expenditures that could be cut without any significant harm. The Department of Education is an ideal place to start.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
There has been a lot of talk recently about rural groundwater bills not getting a hearing at the Arizona State Legislature.
Over the years, proposed legislation has gone by many names, including “Groundwater Conservation Areas,” “Special Management Areas,” “Rural Management Areas,” and “Local Groundwater Stewardship Areas.” It also includes “Sustainable Groundwater Management Plans.”
Regardless of the name, the concept is the same, and all are bad.
While the idea of “local control” might sound good, the actual provisions are far from local or voluntary.
Instead of requiring a local vote of the community, these bills would allow as few as two people in some counties to establish irreversible groundwater control districts throughout the county.
Instead of being elected by the people, the members of these districts would be appointed by the Governor.
Instead of requiring a unanimous vote of county supervisors to adopt the most stringent assured water supply regulations in the nation, these bills would require only a simple majority.
Instead of applying equally across the entire watershed, these bills would allow only “portions” to be designated, meaning that individual properties could be singled-out for their water use, such power plants, farms, mines, hydrogen production facilities, or any business.
Instead of reducing the size of government, these bills would create new layers of government and give additional taxing, zoning, planning, and condemnation authority to a small group of unelected, unaccountable bureaucrats to decide the community’s economy and tell you what you can and cannot do with your private property.
Instead of voluntary conservation requirements, these bills would allow mandatory reporting requirements, groundwater supply rations, and groundwater withdrawal fees (taxes).
Instead of holding government officials accountable for public funds, these bills would allow the Governor to give up to $50 million each year to any non-profit organization or Indian tribe, regardless of geographic location, political ideology, or conflict of interest.
Instead of respecting the right to privacy, these bills would intrude into the personal lives and affairs of rural Arizonans and require active monitoring devices on private wells, including ranchers and farmers litigating water rights in ongoing stream adjudications.
Instead of authorizing temporary measures to help restore aquifer health, these groundwater control districts would be forever.
Instead of limiting absolute power, these bills would allow the unelected members of the board to essentially rule by fiat by establishing “local management goals” that would allow them to do whatever they want as the board.
Instead of requiring water to be put to “beneficial use,” these bills would open the door to “water markets” wherein water could be turned into a “commodity” and sold to the highest bidder, hoarded, and exported out of the district to big cities, environmental non-profits, and private corporations.
Instead of narrowly tailoring government power to prioritize human life and prosperity, these bills would allow the board to expand the definition of an “assured water supply” to require not only enough water for human activity over 100 years, but also enough water to protect endangered species, streams and rivers, and fish and wildlife habitat for 100 years (or longer). In other words, no water for people; only for the environment.
All of these are fraught with abuse and are unworkable for Arizona.
Thus, “local control” (in this context) is a wolf in sheep’s clothing, designed to trick voters into thinking the bills do something other than what they actually do.
We must do everything we can to identify bad legislation before it gets a hearing. And we must find solutions that make sense for Arizona and help strengthen our responsible use and management of water and natural resources.
We do have solutions moving forward, and we will continue to explore additional solutions that can help to address rural groundwater in Arizona.
As an elected official, I am committed to working with anyone who is willing to work with me and others to find reasonable solutions.
Until then, I will continue to fulfill my duty to the public to support good legislation, and oppose bad legislation, on rural groundwater management in our state.
Gail Griffin is a Republican member of the Arizona House of Representatives serving Legislative District 19, which includes areas of Greenlee, Graham, Cochise, and eastern Pima Counties. Griffin chairs the House Natural Resources, Energy & Water Committee and is co-chair of the Joint Legislative Ad Hoc Committee on Water Security.
