Sunday, November 7, 2010

My Congressional To Do List

It's easy to complain about Congress and Politics. Bitching and moaning make up much of cable news and facebook status updates. I'm as guilty as the next guy, so to make amends here is my congressional to-do list.

  1. Repair the Tax Code: We are living under an onerous and cancerous tax code with too many favors for special groups (e.g., homeowners, certain businesses, etc). Much too much time and money is spent on trying to comply with the tax code and work within the tax code to save money. We need to remember the spirit of the Tax Code Reform Act of 1986 and make real reforms. Some things to be done--get rid of nearly all deductions, especially the home interest deduction, and specific industry credits and deductions; get rid of the corporate income tax and raise the rate of dividend and capital gains taxes; get rid of AMT, it is a fantasy that takes up way too much time; and on and on.
  2. Talk Seriously About our Debt and Deficit Problem: Notice that I'm not even asking Congress to solve the problem, but just to be realistic about the problem. To that end we need Congress to recognize that (a) our biggest cost driver is Medicare and something much be done about it; (b) we don't actually have a Social Security Trust Fund and that soon we'll need to use general fund money to cover Social Security payments; and, (c) that Defense Spending is the largest piece of the discretionary pie and has increased the most in the last year and therefore can't be ignored.
  3. Deal with America's Infrastructure: It's a well known fact Johnny that America has an aging and decrepit infrastructure. From cracking roads, to an overworked freight rail system, to bursting pipes, to poor transportation systems, the US of A needs some work. We need to raise real revenue (increase gas tax and other stuff) and reform our construction bidding process and start laying the foundation for our next economic boom.
That's it. There is plenty more that I would like Congress to do, such as ending farm subsidies and getting serious about our engagement with the world and a host of other issues. But here are at least 3 things they could do and can do.


  1. explain getting rid of corporate income tax and AMT. I don't know much about the arguments for/against.

  2. The USA has one of the highest corporate tax rates in the developed world. Furthermore, our corporate tax code is riddled with deductions and exemptions and credits that significantly distorts business. This creates strange situations with corporations shifting money overseas, accelerating inventory purchases, and making other odd moves to limit their tax exposure. This creates significant inefficiencies. To make up for the revenue loss we would then increase the dividend tax rate (which is artificially low which generally helps rich people) and the capital gains tax. Ideally this would be revenue neutral, but much more efficient, increasing the capacity of our economy.

  3. As far as the AMT (Alternative Minimum Tax), I'm not necessarily opposed to it and in fact like the fact that it limits many deductions. I'd only get rid of it because every year Congress spends tons of time doing the obvious and increasing the AMT threshold. At the very least they should index it to inflation. (They don't do this because when JCT did "scores" the change it will be too "expensive" and political hay will be made).

  4. Infrastructure! I don't understand why folks seriously discourage spending to upgrade the nation's infrastructure. It's just a no-brainer, isn't it?

    Anyway. Increase the gas tax. Please. And while we're repairing the roads and bridges and rail systems, why not update them for a sustainable 21st century that relies less on carbon emissions? Just a suggestion.

    As for the spirit of the Tax Code Reform Act of 1986, well, I can't say I do or do not have that spirit. But I think the phrase "the spirit of the Tax Code Reform Act of 1986" is wonderful and hilarious.

  5. Yes.
    Yes (and get rid of stupid subsidies of electric cars, instead, throw in a carbon tax).
    I aim to please.

  6. Awesome entry Nate. I can sort of see #2 happening. What do you think the odds are for the other two?