A Pro-Free Enterprise Tax & Law Structure
The power to tax is the power to destroy. .
Seems like we want to be careful about what we let our government destroy.
Sort of an enumerated powers applicable to all levels of government might be useful at least as a thinking tool.
It seems that social engineering is always divisive, toxic and provides opportunities for corruption.
Social engineering by taxes, tax breaks, and subsidy is no different but more so.
The removal of that propensity towards corruption is worthy but has hard to quantify costs and benefits.
Saving the work-life being wasted in the industry having propensity
towards corruption is easier to measure.
A) I wonder how much our productivity and production would increase if 99.5% of tax accountants, tax lawyers and tax bureaucrats where doing something actually productive rather than gaming the system. . . my eyeball survey of certain parking lots guesses that there are 3 persons so employed for every farmer. If farmers are still 3% of workers then it seems we could have 9% more real labor force time, perhaps equivalent to 9% increase in real GDP, just by blowing that stuff into some useful truly useful employment.
B) I wonder how much of that other 91% of the labor forces time would be available for doing actually good things if we could get our tax collection system that right and simple. Lets call that yield 2% of the labor force time, estimate it as a 2% increase in real GDP.
The misspent work-lives and other resources caused by tax distortions on the market I cannot even begin to measure directly.
My guesstimates on components, and proxies for components, that compose that economic waste created by tax distorted markets varied so wildly that I have tentatively settled for the proposition that this waste my not be as significant as I thought. The reality check on the high guesstimates would be the cost of economic dislocation that would become apparent if the tax distortion was to suddenly stop. Just like stopping a speeding car the cost of the speeding is dependent on the rate of the stopping.
If the above 11% of GDP [ 9% in A) + 2% in B)=11%) was shifted from frothy illusory GDP to real substantial GDP by legislating a five to ten year
phase out of the corruption & waste inducing tax driven distortion then
both the stability of the law and the certainty of a tax distortion sunset
would encourage those persons in that 11% of GDP to change jobs to something
more productive at an orderly rate.
Likewise the business and investment tax driven distortions would also
be removed at so orderly a rate that the market is not traumatized. That practically free 11% increase in our real GDP increased the base of all future growth by that amount - a drag laden 3% economic growth in GDP would be able to produce a drag pared 3.33% economic growth in GDP.
Let us assume that our country suddenly recognizes that all delegations of legislative authority embodied in the Code of Federal Regulation is UNCONSTITUTIONAL & VOID as is ALL the past legislation that delegated that authority.
Now the IRS has no legal standing and no employment short of felony in the personal capacity of IRS employees.
Now Constitutional replacement legislation is needed immediately. By
Constitutional congressional model legislation authorizing interstate compact
the states are authorized and required to collect federal sales taxes on all
new product sales at a country-wide uniform rate. Existing tax breaks would be
implemented by tax refund. Tax refunds are limited to citizens, legal aliens and citizen businesses. The tax is made as an effective savings account for the relatively impecuniary.
There are other details to smooth the transition and other taxes to eliminate and roll into one collection mechanism for all local, state and federal domestic taxes but they need not be raised now.
NOW we have no less that an 11% increase in our REAL GDP.
RELATED BUSINESS RISK REDUCTION
And we reduce that amount of government induced risk that business face by removing the CFR and its capricious enforcement under possible criminal penalty that was used to shakedown business and punish those out of political favor.
Those portions of the federal executive branch, like the EPA, that also fall when the CFR is discovered to be largely UNCONSTITUTIONAL & VOID. Constitutional replacement legislation is needed immediately By Constitutional congressional model legislation authorizing interstate compact the states are authorized and required to implement country-wide uniform if they wish for their citizens to have remedy to violations by citizens in other states.
Reducing businesses risk premium on investment that they need to cover the government caprice induced risk to every new investment will have benefit every year. State enforcement of interstate compacts rather than a capricious mix of state and federal enforcement will likely cut the full cost of every new investment by 5%, reduce the lead time required to embrace a business opportunity by 80%, and reduce the required total annual return on investment to justify an investment by some 3% per year. Those are just my eye ball estimates - what are your estimates?
Maybe we can dig our way out of the current mess we are in! We just need to say NO! to BHO’s crew & RINOs before we can honestly say YES! to our children and grandchildren.