Social Security Tax Cut for Estate Tax Cut

I've written about this before and my position hasn't really changed much. I think what President Bush is proposing is a great idea. He has been monotone on most all domestic issues. Tax cuts, Tax cuts, Tax cuts. As a tax payer I can appreciate that.

Until this term his tax cut proposals have invariably favored the inheritance/leisure class over workers. For example, the estate tax cut was an effort to institute a new American royalism. The tax cuts from his first term were successful in securing his large donors for his re-election. In contrast, this is his first gift to those of us who still work for a living. Even those of us who choose to work and could survive quite a while without working will benefit from this.

Keep in mind that the social security tax is a "regressive" tax on the working poor and middle class, but has little effect on the richest Americans: 6.2% of payroll on the first 90 thousand earned per year. This tax was originally sold to the American public with its purpose to support the old and infirm, so the benefit is "progressive" even if the tax itself is regressive. This combination is a big part of what has made it a popular tax over the years. So it baffles me as to why the "progressives" are fighting the President's proposal to cut the regressive tax but not the progressive benefit. Progressives have a big win with this proposal provided it accompanies a series of bills that can balance the budget and still include the full progressive benefits as the President hopes.

He has made it a non-negotiable item of any proposal to cut it by about 30% for those who choose it. Who wouldn't choose it, those who are bad at math?

The President has offered us a great deal and we ought to accept it. We also ought to freeze the Estate tax before it sunsets until such time as our national debt is paid off, or at least shrinking at a duration and rate sufficient to re-stabilize the dollar so the retirement benefits will at least be meaningful, lest they depreciate away. I think my fellow Democrats should offer this as their own non-negotiable item to place on the table next to the President's non-negotiable of a social security tax carve out. It would set the appropriate incentive for those with control of capital to be responsible for the good of us all and not just their own special interests.

When young people think of the Estate tax or “Death Tax” they think that they might inherit something from someone and resist government seizing some of that (even if it does go to the widows and orphans). But only very few of these young people, (a tiny percentage of one percent) are really in the category of the super rich who would see these taxes anyway.

Kiplinger breaks it out for us: If you have already received a US$1,000,000 in gifts + US$11000/year you have been alive, and are going to receive another US$3,500,000 in inheritance, then you might lose some of that to the widows and orphans if your dearly departed rich relative did not have the foresight to hire a few estate tax attorneys to preserve their wealth for their bloodline. How many of even well to do families are really in that situation? Is what could approach US$5 million enough of a head start for a child of privilege before the first dollar goes to support the nation that set the free environment for such wealth accumulation? The interest alone on US$5 million invested is about US$1000/day. All billionaires will still be able to pass on tremendous wealth to their heirs, but some of it should still go to manage the debt accrued by the nation their money has helped shape. This simple backstop has helped deter some of the power of capital that drives our Capital and is an thereby an element of democracy.

The balance of power between the money and the voters was thrown off by the removal of the estate tax. Modern memetic marketing and near complete information mediation allows monetary investment to sway vast segments of voters and confuse issues. This has always been true. But what has been more true is that America must always be the vanguard of valuing the vote. Making everyone a shareholder and decision maker in how our nation is run has given us a tremendous strength in attracting the best and the brightest to our shores. We must continue in that as well, and not just attracting the investment class.

So on behalf of this moderate Democrat, thank you Mr. President for your kind offer of finally cutting taxes specifically for low and middle-income workers. We accept your offer, now please accept my offer of freezing the estate tax until the budget is balanced?

Advocates of Liberal Democracy

We, the advocates of democracy, must always remember:

To be magnanimous in victory, for the vanquished may also vote.

To be graceful in defeat, for we will all have our failings.

To be ferocious in our advocacy of democracy, for the tyrants are highly motivated.

To strive for the prosperity of the people, so that democracy can be fostered.

To liberate, but not to conquer, for the conquered will forever be a foe.

To resolve all conflicts which can be resolved, but not to seek them.

To occupy minimally, lest we become what we fight against.

To reach out to the world and share the freedom we have to offer.

To meet our commitments, that we never over reach.

To limit our engagements to what we can accomplish so as not to compromise our future ability to do so.

To be more honorable than our foes, that our virtuous example raise the standards of all.

To govern our governance, that it do only what it must to insure freedom from government.

Gay Marriage is Not Liberal Enough

The institution of marriage is not sufficient for some who seek a deeper bond. As Mike Huckabee, the Republican Governor of Arkansas and supporter of legal Covenant Marriages put it, “It is easier to get out of a marriage than a contract to buy a used car.”, most agree the divorce rate is too high. The institution of marriage is also not sufficiently flexible to handle others who ascribe to older traditional relationships such as "betrothal", nor other social commitments such as "engagement", "cohabitation", "dating", and yes, "gay marriage".

Our society is screaming out for a solution to this complex problem. But the solution need not be so complex. Donald Rumsfeld taught us that "When a particular problem is intractable, enlarge it", and it is generally good advice, especially in this instance.

The debate over marriage is about love and freedom on one side; and control and stability on the other, and both sides are right! One of the blessings of our modern era is that now there can be a middle ground which benefits both sides greatly. This middle ground is based on the rule of law and has its roots in the Bible.

There are many types of relationships between people of all types. In business we customize contracts for each relationship, but each contract starts with a boilerplate. The contracts can also be modified with addendums and amendments to keep them current. Modern contracting software can add standard language to these contracts with ease
We as a society have advanced our business relationships models and left our personal relationships behind. We could very easily have the institution of "Marriage" and the institution of "Gay Marriage", as well as all of the others, it is simply a matter of packaging the appropriate boilerplates to create legal standards for each of these relationships, and letting voters decide how each of them relate to the definitions we have imposed upon our government.

The other very important leg of this effort is the various religions which give meaning to these stages of our lives, commemorating them ceremonially, and exercising the power vested upon them by the States of our Union. Most of the older religions have many liturgical ceremonies for bonding which are not widely used. By creating the additional granularity in relationships, our religious guides may infuse each of these stages of commitment with the sacred love of the church. The research shows that such events do have an effect on the seriousness with which we make these commitments, enhancing stability, and compassion, as well as enhancing both control over the process and freedom within it.

It is only in this modern era that we also have the easily available technology in order to implement these mechanisms to such a degree. The need for custom commitments has outgrown the simple list of pre-nuptial agreement, marriage, covenant marriage, gay marriage, and divorce. And our society would welcome the opportunity to increase our involvement with the religious ceremonies celebrating the loves we share. What the advocates of gay marriage have missed, and why their effort is failing, is that they forgot to include the many people who also have their own ideas of what relationships should be added.

We all want to celebrate our love and togetherness with the blessings of our loved ones under the symbols we honor, whatever our relationship might be. So the problem with Gay Marriage is not that the concept is too liberal, just that it is not liberal enough to capture the imagination of all of us who seek to celebrate holy love. The problem with Marriage is not just one of gay rights, it is human rights.

Thank you John Kerry!

John Kerry voted for a funding bill before voting against it. The bill was going to pass in any case, but John wanted more from it than was in the then current version. He wanted more accountability and visibility on the funding expenditures. The things he was hoping to fix then have only become worse for the delay, but it is not too late to start now.

The leaders of our nation in the US Senate are devoting much attention to the alleged wrong doing of Custer Battles who received two million dollars in cash stuffed into gunny sacks according to Fox News, and are listed in the Top 10 War Profiteers list for being suspended by the Defense Department from all federal contracts for fraudulent billing practices involving the use of sham corporations set up in Lebanon and the Cayman Islands.

In the United States, such wrong doing is punished. If only more of us had listened to John Kerry back then, millions perhaps billions of US$ extracted from our taxpayers could have been preserved or put to use more wisely. Instead, Kerry was ridiculed for being right by people who should have been agreeing with him on this point, but for their partisanship. Election driven partisanship is one of the costs of democracy which reduce its efficiency. It is a problem in need of a solution and I welcome any discussion on that.

I see both George W Bush and John Kerry as American heroes in our time who have and are serving our great nation honorably. United, we can expend the appropriate resources to increase accountability and visibility in our government's operation to become more effective and efficient.

Iraqi Election!

Any person can have a wicked thought or dream. No person is always a good person. Democracy has the capacity to seperate evil dreams or aspirations from the power and capability to make those dreams come true.

This function of democracy acts as a natural constraint on the will to power. If the constitution can implement this with a reasonable amount of checks and balances, then never again can a man such as Saddam rise to power. So long as the people stand up for their freedom and defend it, they can live free of governmental control and oppression.

Inauguration Speech 2005

If the speech was a surprise, you haven't be reading your Rummel.

When both sides of a debate agree (Clinton and Bush), the policy is set and the direction clear.

World peace without world domination is entirely possible. The path to it is clear. What remains is to prove it.

Privatizing Social Security

The Cato Institute is hoping to save Social Security through privatizing as President Bush has proposed, in general terms.

Social Security is the largest government program in the world and was enacted during our great depression in 1935. The basic proposition is that the federal government's direct involvement in this is to be reduced, in fiscal terms, by about one third. The Bush Administration usually refers to this as a 2% reduction, though this may be confusing as what this 2% refers to is 2% of the 6% tax on income below the taxable level, therefore it is more rightly described as one third (1/3) of the tax revenue source supporting the payouts.

My view of the administration's policy motivating goals is that in general they are laudable and righteous:

• to restore Social Security to long-term solvency
• to provide a higher return on investment benefit to tax payers
• to allow low-income workers to accumulate real inheritable wealth
• to give workers ownership and control of their retirement funds

The Democratic party is expecting to oppose this privatization effort for lots of very good reasons as well:

• Social Security is intended to be the safest part of the retirement portfolio, guaranteed by the full faith of the US Government.
• There are less drastic ways such to address the problem such as means-testing benefits, prolonging retirement age, or raising payroll taxes (eww!).
• It is a policy designed to reward the powerful few (wall street), rather than the productive many who are the payers into the system.
• It is an expensive method to address to the problem and poor governmental fiscal responsibility.

Can the policy goals be reconciled with the reasonable opposition, and if so how?

I am in what is perhaps a minority within my party who believe that such reconciliation is possible, however I do not expect much will be achieved within the current Presidential administration. Reconciliation will require intense good faith negotiation between all sides on this debate, and historically Social Security is not an issue that receives such treatment swiftly. It is the proverbial "third rail" in politics (touch it and die).

Therefore, I will credit President Bush with heroically raising the issue's priority and fostering the discussion of partial privatization, (which I believe will eventually be a part of the solution), but I do not expect the optional 1/3 privatization proposal to survive intact. The proposal is a significant change in the structure and may be overly drastic in the near term. Also it is questionable as to whether the proposed mechanism ultimately meets the goals of the policy. Something more moderate, please?

What I will look for from my Democratic colleagues is more than just opposition. I will look for the good faith negotiation that can only come when both sides are eager to resolve a problem. The method of resolution may change, but the problem will not go away on its own.

One other answer to this issue is in means testing the benefits. Those of us who have acquired wealth through our labors, in general have less need of the social security benefit, and also generally better health. We also tend to enjoy those labors that have brought us the wealth and so we often do not mind postponing our retirement a little more than most. In light of this, would we be able to increase the solvency of the SSTF by starting the payments at a later time in the lives of those with more means? The actuaries should be able to formulate a graduated means test based on income tax returns to reduce the benefit to the most wealthy by simply start the benefit later in our lives.

Starting the benefit later seems very appropriate to me. The more successful people tend to live longer (so we get more years of the fixed benefit anyway) and we need the benefit less. The risk is that the benefit will acquire some social stigma damaging to the pride of our deserving older people. I see this risk as minor given this structure. There is value in keeping social security from becoming too much a wealth reapportionment scheme as the whole program will lose some support if that occurs.

Another method of resolution favored by Bill Clinton is increasing immigration for foreign workers as well as increasing the minimum wage. This increases the taxable wage base and evens out our population growth bubble. I can not find a significant downside to this. Unemployment is low already and has been for years, it would increase our productivity and our GDP as well as the tax base of workers supporting the retired. It also capitalizes on our increased border security of late, especially since 9/11.

Whatever we end up with will likely be a combination of balanced adjustments to our current social security/employment/benefit/taxation model. There is still too much socialism world wide (and too much poverty domestically) for us to be able to successfully carve out the program and maintain our immigration, so some compromise is a necessity. I hope our elected officials can come to reasonable terms.