Flat Tax Rate: Is it fair and will it help America?

     Over the past week there has been a lot said about current governor of Texas and Republican Presidential candidate Rick Perry’s plan for a federal flat tax. His plan calls for all individuals to pay a rate of twenty percent on their income. This would replace the current progressive tax system that starts at ten percent and moves up to thirty-five percent. It might appear as though individuals and families on the lower end of the economic scale would be hindered by an increase in their tax rate. Not so, says Perry.  He includes an option of up to $12,500 in tax deductions for the less privileged, tempering their tax rate.  He states that “taxes will be cut across all income groups in America,” putting more money in their pockets. [1]

     Herman Cain’s “9-9-9” plan also puts a flat rate on income tax. His plan calls for a nine percent income tax, with only charitable donation deductions. [2] Cain’s main focus is the idea of taxing all individuals at the same rate. But can a flat tax system work? Does this lead to equality? Can taxing at rates lower than the current system generate more revenue?

     The idea of creating a flat tax is not new, in fact, flat tax has been proposed in the past by both Democrat and Republican candidates. Currently, several countries (Russia being the most prominent) and states within our own country have flat tax systems. The current system in Russia, which was implemented in 2001, has boosted their economy and resulted in increased tax revenues. [3] Although, the economy has improved since the implementation of a flat tax there is no guarantee that it was solely attributed to the new system. Even if that were the case, the United States economy is much larger than Russia’s and our current financial crisis is much larger than theirs was at the time.

     Would implementing a flat tax rate be fair for all, or most, Americans? The easy answer is, yes, and no. Under the current tax system, individuals in lower economic brackets pay less of a percentage of their income and individuals in higher brackets pay more. But there’s a catch.  There are several loopholes and tax-exemptions that are only available to the wealthy to help them pay a lower percentage of taxes than individuals who make tens of thousands of dollars less per year. Obviously, there is a definite inequality. A flat tax system will eliminate loopholes and make filing taxes a simpler process. With certain deductions for lower income groups the system has potential to overall be more “fair”. However, both Perry’s and Cain’s plans still allow for certain deductions which could eliminate the “fairness” in the system and benefit the wealthy and their personal causes.

     Bottom line, we need a tax plan that will boost the US economy.  Regardless of differing opinions, a flat tax rate system, with provided benefits for the less fortunate, is something we need to critically consider for America. Fewer loopholes would lead to less tax fraud and tax evasion could be decreased. The system does have potential and I support the principle, but it also needs to be investigated and debated more. Any new tax system put into place will also need to implement a system that can help our government balance the budget and improve the economy.

Sources:

[1] http://content.usatoday.com/communities/onpolitics/post/2011/10/rick-perry-flat-tax-economic-plan-/1

[2] http://pacbiztimes.com/2011/10/28/guest-oped-flat-rate-would-treat-all-taxpayers-equally/ 

[3] http://www.voxeu.org/index.php?q=node/941

Solyndra and Keystone: Not All Environmental Scandals Are Created Equal

The following blog entry is in response to the editorial “Solyndra and Keystone: Not All Environmental Scandals Are Created Equal.” The article was from the October 31, 2011 edition of The Nation by The Editors. The editorial was found through the political blog, Real Clear Politics.

Ever since governments have existed there have been scandals; for many they seem to go hand in hand. Cronyism, the appointment of associates or friends to positions of authority without proper consideration of their qualifications, is often a part of government scandals.  The Obama administration is no exception - it is currently involved in two major environmental scandals where cronyism is a factor.

The Solyndra scandal involves a 535 million dollar Energy Department contract to a start-up solar panel company - Solyndra. The law firm representing Solyndra is the very same law firm that employs the US official’s wife who pushed for the contract. Clearly there is a conflict of interest.

The second, the Keystone scandal involves a pipeline project and an interweaving web of cronyism. The players Paul Elliott, Hillary Clinton’s former deputy campaign manager and currently a lobbyist for TransCanada and David Goldwyn, a former State Department official and tar sands lobbyist. There is also a major tie in to Cardno Entrix, the consulting company that led the Environmental Impact Study. The Obama administration is pushing the project forward.

The editorial “Solyndra and Keystone: Not All Environmental Scandals Are Created Equal,” is interesting and topical and address all American citizens.  It focuses on two scandals that have an impact on our environment, a topic that is getting a lot of attention and a lot of government funding.  Both show a blatant corruption of government funds. The author draws our attention to the scandals, and in particular cronyism, to force us to look more deeply.  Environmental issues are a hot topic.  We want to fund alternative energy sources, we want to improve our world, but we must, as the Editors implore us, understand to what cost and to what purpose we align our supports.  It is the job of the American people to keep the government in check and insist on responsible use of authority.

The authors have done the research and show a reporting of the facts by identifying these issues and naming specific people. They ask the reader to balance their opinion and future actions based on these facts.  Reporting facts attributes credibility.

They suggest that the Keystone scandal is more significant than the Solyndra scandal; I agree, although both set of actions grossly manipulated trust.  It is the Editor’s note of opportunity for President Obama to deliver on his campaign promise to change the culture of Washington and put a stop to the Keystone issue that the Editors focus their stand. The lesson as stated in the article is that cronyism can drive policy and used against good judgment. I feel their focus has transferred the responsibility to the reader - to act, to encourage, and to insist upon President Obama to uphold his promise and responsibilities as our leader and Commander in Chief. 

Editorial: Teacher tests separation of church and state

The following blog entry is in regards to Suzy Parker’s editorial “Teacher tests separation of church and state” for USA Today.

Throughout the history of the United States there have been many issues regarding church and state. The protections provided in the Bill of Rights give citizens the right to freedom of religion. One common misconception is that the Constitution lays out the separation of church and state.  This is not true, but instead an interpretation of the First Amendment.  What happens when the church denies Constitutional rights of citizens? Suzy Parker’s editorial for USA Today poses this question.

Parker’s editorial responds to the Supreme Court case Hosanna-Tabor Evangelical Lutheran: Church and School v. Equal Employment Opportunity Commission. The case focuses on the institutions right to fire a disabled employee who they claim could no longer perform her duties. Cheryl Perich, a teacher at Hosanna-Tabor Evangelical Lutheran in Michigan, was diagnosed with narcolepsy, a sleep disorder that causes excessive sleepiness. She missed significant time from school while on approved medical leave. She was later warned that if she missed more than six months of duty that she would be terminated. Perich received clearance from her doctor to return to work but was denied by the church to teach. According to the article, the church cited her “insubordination and disruptive behavior” and that by threatening to take legal action she damaged her relationship with the school “beyond repair.” Prior to this formal reaction, Perich was considered a secular employee of the institution, with no religious ties. It was not until her termination that she was given a clerical title. The question, as described by Parker, is under what employee status the school is determining Constitutional rights.

Courts have extended “ministerial exceptions” to religious affiliates whom they chose to become clergymen. The same exceptions do not apply to employees who work in secular positions for those same institutions. This case is based upon the fine line between the powers governing church and state and the consequences of crossing that line. Parker has done well to research the case and reference information regarding the Constitution. Her credibility lies in reporting the facts.  The very idea that the Supreme Court has to grapple with the “fine line of church and state” makes it worthy of commentary.

Parker claims that private or non-religious institutions would be in violation of the law if they were in this same situation. She also claims that the church does have the right to choose who teaches religion, and points out that Perich could have continued her duties as a secular member or lay teacher without being in violation of her contract.

Parker’s resolutions are to remove the religious titles and restore Perich’s secular status.  She further supports that there should be a financial settlement between the parties, whereby Perich is restored lost income. Her stand is summarized; the secular argument does not breach religious walls and instead makes the issue civil and not Constitutional.

I agree with Parker; this decision does not need to include religion. The decision is a simple matter of rightful employment.  This decision would include all citizens who are part of the workforce. It is important for the court to disregard the title change and not include the religious institution label while making their judgment.

How Budget Battles Keep the Economy in Limbo

President Obama proposed a $3.7 trillion budget in February. But as the new fiscal year starts, there's still no final budget in place.

This post is in reference to the article “How Budget Battles Keep the Economy in Limbo” by Marilyn Geewax of National Public Radio. The article was written on October 2, 2011.

     Congress has already caused a stir with the approval of a stopgap-funding bill to keep the government operating. With the fiscal year beginning on October 1, Congress has delayed an official budget plan for the year. This has become a popular trend since the 1970s and last year the stopgap bill lasted over half of the fiscal year. A stopgap-funding bill is a temporary spending bill until the US budget is set. It’s hard to believe that the US government would ever stop operating, but if there was not an opportunity to employ stopgap funding it could, at least theoretically.

     Stopgap-funding delays every government funded venture – people working directly or indirectly for government-funded industries don’t know their budgets, and so they delay both their business and personal plans.

     I recommend reading the article. It may make you aware or increase your intolerance to the way government works and may press upon you to have a voice in what happens in government. The stopgap funding affects multiple parts of the government including Congress and federal agencies and could have an adverse affect on public opinion. Potentially, someone you know has been negatively affected by the budget delays.

Embedded link: http://www.npr.org/2011/10/02/140961812/federal-budget-uncertainty-weighs-on-economy