Why Washington Can’t Reform Tax Revenue Policy
S. Douglas Hopkins is a citizen activist, determined to bring fact-based analysis and decision making to bear on the challenge of U.S. federal tax and budget policy. He is the author of A Citizen’s 2% Solution: How to Repeal Investment Income Taxes, Avoid a Value-Added Tax, and Still Balance the Budget. His critique of how Factual Distortions Derail Productive Debate on Tax Reform was published in Tax Notes this past summer. He welcomes feedback and thoughtful rebuttal and discussion at www.2pctsolution.com.
Douglas is the founder and president of Kestrel Consulting LLC (www.kestrelllc.com), a crisis management and turnaround consulting firm that provides advisory and interim management services to middle-market companies and coauthor of Crafting Solutions for Troubled Businesses: A Disciplined Approach to Diagnosing and Confronting Management Challenges.
As we approach our national day of mourning, the April 15th tax filing deadline, Americans once again are witness to an apparently spontaneous breakout of Kabuki theatre in our capital. Our leaders from Right Left and Center all seem to be heralding a common message: “Reforming our convoluted, inefficient and inequitable tax revenue policies is a critical national priority!” In the last week alone I’ve received over two dozen emails soliciting my money and signature in support of competing versions of tax reform. So if this is such a widely shared priority, why is it we can expect no real progress?
The answer is shockingly simple. Our leadership is incapable of formulating or debating real solutions to problems; because they are unable to see past the political calculus of protecting their carefully crafted voting blocs. Despite solemn proclamations that “everything must be on the table”, essentially nothing is on the table, because any change from a pre-existing position represents a threat to their established base. Compromise is betrayal and innovative thought is anathema.
Tax reform is indeed a critical priority; we need to examine and address the inefficiencies of our tax code as an economic imperative. But our current debate ignores the economic challenges we face and instead uses the issue as a means of fragmenting and energizing voters behind emotional, but flawed arguments. To clarify, let’s look at those recent email solicitations.
They came, as they always do, in four basic flavors:
1. Conservative: “Help us hold the line against Congressional spending and support the Job-Creators among us by demanding lower taxes and smaller government. We don’t have a tax problem, we have a spending problem.”
2. Progressive: “We must increase taxes on the Rich (and only the rich) in order to fund social services for the Poor.”
3. Responsible: “We have to balance our budget! It will hurt, but we must share the pain and do it now, or our children will pay for it.”
4. Conciliatory: “Aren’t we all embarrassed by how dysfunctional our Congress is? Tell your Congress-people to make nice and compromise. America was built upon compromise.”
Each of those first three messages has a strong supporting constituency, for whom it rings with truth and principle. The more pragmatic and tolerant among us, which perhaps constitutes a small majority, tend to lean toward category four, justifiably believing compromise is integral to a functioning democracy. But categories one through three are issues of passion, highly resistant to compromise, and conciliation by its very nature is ambivalent, thus less vocal and activist in nature. So, are we destined to maintain our gridlock, perpetually re-litigating old arguments with no resolution? Unless we expand our debate beyond existing options, we may be; because these competing visions are misguided and irreconcilable.
Most importantly, none of the proposals currently under debate confront the underlying economic problems we face and the misguided incentives that have created them.
Our economy has become deeply destabilized. Dogmatic flaws embedded in our tax and monetary policies have made tax avoidance and valuation manipulation far more profitable than productive enterprise. Misguided structural tax preferences inadvertently encourage our citizens to invest in asset bubbles in America – while they shift productive investments offshore. Until and unless we confront and address those structural flaws, and stop subsidizing unproductive capital with preferential tax treatment, we will not stimulate robust and sustainable job creation.
It’s time to stop treating tax reform as a political issue and examine the misguided economic incentives buried within our tax code. If we want to stimulate renewed and sustainable economic growth and prosperity we need to remove the misguided structural shelters that currently subsidize unproductive capital. We need to expand our public debate to examine fresh perspectives and innovative alternatives.
The path to more efficient and equitable tax revenue policies does not pass through some midpoint between current liberal and conservative dogma. It will require consideration and examination of more radical and creative alternatives. As example, a structural alternative I’ve described previously on this site: repealing investment income taxes and replacing them with a tax on accumulated wealth, is an option I perceive spans the current partisan battle-lines. It could stimulate growth while simultaneously equalizing effective tax rates and more equitably distributing the tax burden and reducing our budget deficits. Growth, Equity and Fiscal Responsibility need not be not mutually exclusive goals.
However, the impetus for examining that, or any other meaningful alternative, needs to be driven from the public – because our “leaders” in Washington apparently are incapable of seeing beyond the narrow confines of their existing battle-lines and partisan political calculations.
Image credit: Shutterstock
The Spilhaus Projection may be more than 75 years old, but it has never been more relevant than today.
- Athelstan Spilhaus designed an oceanic thermometer to fight the Nazis, and the weather balloon that got mistaken for a UFO in Roswell.
- In 1942, he produced a world map with a unique perspective, presenting the world's oceans as one body of water.
- The Spilhaus Projection could be just what the oceans need to get the attention their problems deserve.
It's just the current cycle that involves opiates, but methamphetamine, cocaine, and others have caused the trajectory of overdoses to head the same direction
- It appears that overdoses are increasing exponentially, no matter the drug itself
- If the study bears out, it means that even reducing opiates will not slow the trajectory.
- The causes of these trends remain obscure, but near the end of the write-up about the study, a hint might be apparent
Through computationally intensive computer simulations, researchers have discovered that "nuclear pasta," found in the crusts of neutron stars, is the strongest material in the universe.
- The strongest material in the universe may be the whimsically named "nuclear pasta."
- You can find this substance in the crust of neutron stars.
- This amazing material is super-dense, and is 10 billion times harder to break than steel.
Superman is known as the "Man of Steel" for his strength and indestructibility. But the discovery of a new material that's 10 billion times harder to break than steel begs the question—is it time for a new superhero known as "Nuclear Pasta"? That's the name of the substance that a team of researchers thinks is the strongest known material in the universe.
Unlike humans, when stars reach a certain age, they do not just wither and die, but they explode, collapsing into a mass of neurons. The resulting space entity, known as a neutron star, is incredibly dense. So much so that previous research showed that the surface of a such a star would feature amazingly strong material. The new research, which involved the largest-ever computer simulations of a neutron star's crust, proposes that "nuclear pasta," the material just under the surface, is actually stronger.
The competition between forces from protons and neutrons inside a neutron star create super-dense shapes that look like long cylinders or flat planes, referred to as "spaghetti" and "lasagna," respectively. That's also where we get the overall name of nuclear pasta.
Caplan & Horowitz/arXiv
Diagrams illustrating the different types of so-called nuclear pasta.
The researchers' computer simulations needed 2 million hours of processor time before completion, which would be, according to a press release from McGill University, "the equivalent of 250 years on a laptop with a single good GPU." Fortunately, the researchers had access to a supercomputer, although it still took a couple of years. The scientists' simulations consisted of stretching and deforming the nuclear pasta to see how it behaved and what it would take to break it.
While they were able to discover just how strong nuclear pasta seems to be, no one is holding their breath that we'll be sending out missions to mine this substance any time soon. Instead, the discovery has other significant applications.
One of the study's co-authors, Matthew Caplan, a postdoctoral research fellow at McGill University, said the neutron stars would be "a hundred trillion times denser than anything on earth." Understanding what's inside them would be valuable for astronomers because now only the outer layer of such starts can be observed.
"A lot of interesting physics is going on here under extreme conditions and so understanding the physical properties of a neutron star is a way for scientists to test their theories and models," Caplan added. "With this result, many problems need to be revisited. How large a mountain can you build on a neutron star before the crust breaks and it collapses? What will it look like? And most importantly, how can astronomers observe it?"
Another possibility worth studying is that, due to its instability, nuclear pasta might generate gravitational waves. It may be possible to observe them at some point here on Earth by utilizing very sensitive equipment.
The team of scientists also included A. S. Schneider from California Institute of Technology and C. J. Horowitz from Indiana University.
Check out the study "The elasticity of nuclear pasta," published in Physical Review Letters.
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