Part 3 -- Simplify and Rationalize Public Policy
The first installment of An Impractical Guide established
that critical thinking, as a national value and widespread among an enlightened
populace, is necessary to bring about positive change in America. http://www.opednews.com/articles/An-Impractical-Guide-To-Sm-by-Larry-Butler-Children_Culture_Economic_Economics-131021-896.html
The second installment suggested that
critical thinking be applied to a fundamental evalutation of public policies
such as taxation. <
To have arrived at this point in our revolution, critical thinking must have been restored as a national value, and critical thinkers must have actively evaluated public policies. A democratic society that has not progressed this far will be vulnerable to the influence and propaganda of traditional vested interests.
Let's see where we already agree. First of all, consider the valid roles of the federal government. I believe that they include: (1) Champion and protector of individual rights; (2) Champion and protector of equal opportunity; and (3) Champion and protector of the common good.
If you agree, please continue reading. Feel free to add any other categories that you feel may fall outside the three listed above, but remember to keep it simple.
This phase reminds us that critical thinking is not necessarily an end to itself. Our founding fathers took the ideas of the best thinkers of their day and set them in motion. They created a new nation and the public policies that defined it. We desperately need to do the same today, and you can be sure that it will be the hardest element of our own revolution.
Within the context of critical thought, the process of simplifying a system will also serve to rationalize it. By carefully and critically analyzing the fundamentals of an issue, we can devise solutions in the form of new structures and processes that are more direct, compact, and rational. Government becomes more practical, more equitable, more effective, and more efficient. And smaller.
By now, you may be tempted to dismiss this whole idea as impractical ranting about things that are too big to change. Let's test by example.
Our rational examination of taxation in Part Two carried with it some profound implications. If you were surprised to consider the possibility that taxing labor is irrational, you can guess where my solutions are headed. For generations, we've lived with this tax on labor, pretty much without question. Oh, occasionally somebody will ask why those who earn very high wages and salaries are exempt, but that's about as far as our critical thinking has gone on this matter. In order to get to real solutions, new solutions, we need to start with fundamentals; we can't just build on accepted conventional wisdom. After all, accepted conventional wisdom has gotten us to where we are today.
So taxing labor -- a commodity we want to be in strong demand -- is irrational. Irrational public policies need to be changed -- rationalized, made reasonable. If our governments need money to function, it should be raised by processes that don't wreak harm to the economy. Makes sense, no? Public policies that make sense may also make for good, efficient government. Public policies that do not make sense beg to be eliminated, further simplifying the whole system of government.
If income or wealth is taxed, it has no effect upon the demand for income or wealth. Since neither is a commodity that can be bought or sold, neither has a price associated with it. Since neither has a price, tax changes cannot affect a market price. The argument that higher income taxes will discourage income loses a leg of support. The argument that taxes on wealth will discourage people from getting rich loses another leg of support.
To carry this line of critical thinking into actionable solutions, create a new system of taxation and evaluate its expected effects.
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