A simple case for repeal and cut
Any time anyone describes an issue as "complicated," run, far and fast, or at least hide your wallet. Such is the state of affairs in Washington, as the denizens of Congress tie themselves in Gordian knots over the two pressing problems of the times: health care and tax reform.
The solution to each of these apparent conundrums is a single word. Health care: repeal. Tax reform: cut. Here's why.
Anyone who has ever remodeled an old home or laughed to the 1986 movie The Money Pit (or for old cinema buffs, the 1948 Mr. Blandings Builds His Dream House) is aware that anything that is tragically flawed is far easier and much less costly to bulldoze than to patch up. Rickety laws are not at all different from rickety houses. Why Democrats are adamant about rebuilding the imploding health care system of their own creation is beyond comprehension and suggests just how deep in the obstructionist mud they're stuck. What member of a debating society would enjoy defending the virtues of Obamacare? Democrats, as well as Republicans, should be demanding repeal. Given a clean slate, all parties can put forward their vision of the future of medical care, saddled only with the baggage and dry rot they choose to bring to the table.
A tax cut is a simple concept – unless you talk to an economist. Tax cuts stimulate the economy. Money is redirected to the pockets of job-creators, investors, and consumers, fostering economic growth. But the majority of economists swear that tax cuts don't completely pay for themselves, arguing that in spite of spurring economic growth, tax cuts result in a decline in revenue.
This bit of economic wisdom rings hollow. Any realist would trade an upswing in growth for a dent in government revenue, but even if we assume that lost revenue is undesirable, when we look at both sides of the tax coin, economists' prevailing overview of tax reform makes no sense.
If tax cuts result in reduced revenue, what happens when taxes are raised? Economic wisdom dictates that the more you tax something, the less of it you get. In the short term, you get more, just as if you hold a weapon to someone's ribs, you will probably achieve a short-term gain, but your donor is unlikely to revisit you anytime soon.
The 2012 French levy of a 75% tax on the wealthy offers an apt parable. Revenue bumped up, but only as a meager percentage of forecast, and the tax quickly folded under its own weight as capital and talent vowed to flee for greener pastures, taking the revenue with them.
Prevailing economic wisdom poses a curious paradox: when we cut taxes, revenue declines; when we raise taxes, revenue declines. If we follow this logic, we must conclude that any current tax rate is near ideal for generating revenue, and that any change will upset this optimal condition – an absurdity. Top U.S. federal tax rates have ranged from 7% in 1913 to 94% in 1944; which rate was ideal?
Keep life simple.
Repeal Obamacare. We need to be rid of its bloated structure and the termites it has bred in order to unclutter our vision for the best way forward.
Cut taxes. Ignore economists; they tie themselves up in more knots than the Congress. Put capital back in the hands of the people.