Nearly half of regular people rejected the Democratic Party's message in last week's election. They are demanding change, and it must begin with us. Let's get it right this time, and look beyond the easy answers and slogans. Anger over economic inequality is what propelled the GOP to victory - even as Republicans promote inequality. As the party of regular people, the DNC must address the root causes of economic inequality. We must change.
Public policies in western economies have for centuries (1) subsidized capital and (2) penalized labor. These are huge errors that directly cause inequality - and a GOP government is about to make them worse. Now is the time, and the Democratic Party is the way, to fix these errors.
The federal government needs about 21% of GDP to fund its operations at current levels, and this is a solution that will yield that much tax revenue without crippling the economy. Yes, it's a tax plan.
- Eliminate payroll taxes for both employers and employees.
- Tax the income of each earner according to a moderate, progressive schedule ranging from 20% to 40%, with a standard deduction of $20,000 (and no others). All income is taxed the same no matter what the source.
- Tax corporate income at the same rates as individuals, but based on Generally Accepted Accounting Principles (GAAP) - after subtracting dividends.
- Use excise taxes to recapture economic externalities - costs that are laid off on others.
- Apply tariffs to equalize the price of goods imported from countries that exploit labor or subsidize capital.
Economists will see that the plan stimulates aggregate demand by putting more money in the pockets of regular people while encouraging hiring by reducing the cost of labor. Statesmen will see that the plan restores freedom to individuals, families, and businesses by eliminating the penalties and incentives in today's tax code. Corporate executives will see that the plan gives them an opportunity to cut costs, make more rational and socially responsible investment decisions, and even repatriate their offshore cash by paying it out as dividends. The global community will see that the plan sets an example for freedom, even while serving notice that exploitation carries its own costs.
Naturally the DNC platform needs to address other things - how the federal government spends that 21% of GDP, for example. It certainly can't ignore the need to protect civil rights and restore voting rights. It must create a plan to get big-money influence out of our political processes and institutions. But as important as these things may be, they mean nothing if the simmering rage over economic inequality isn't addressed first.
There's a lot more detail to this plan, but for now I want to know that I've gotten your attention. I offer you my services as a volunteer or an unpaid intern if you agree that we should promote these ideas together. My contact information appears below.
Yours in democracy,
Larry Judson Butler