Can and should we as a country strive to be Great?
Can Our Country Be Great Again? The very question suggests that the “greatness” of our country is gone or slipping away. I would suggest that our position as the most prosperous country in the world is no longer unquestionable. There are many reasons why we have seen a significant economic decline in our country, some of which were touched on in last weeks editorial. The question IS, “Can we be great again and what must we do to reestablish our country as the most vibrant economic power in the world?”
Before we explore if we can, another question should be answered, “Should we even try to be “Great?” The very question of “Should we try,” is just a bit repugnant. We are a country that is constitutionally formed to be unique and different from every other country on earth. Our government draws its power from the people. Most other countries grant power or privilege to their people. This is the source of our strength, “The People of The United States of America!”
In that statement is the first clue in regaining a position of greatness in the world. Some would suggest that we return to our roots. That has the implication that we must go backwards, giving up some of modern day real progress. Actually what we need to do is release the strength of our nation. The productive, innovative, energetic, charitable, people of the United States!
If we wish to again become great we must become the most productive. Think for a moment of the fuel for our economy. That fuel is cash, capital, currency, US Dollars. If we want to see the economy improve we need to increase the supply of fuel. The current approach to this has been for the government to establish stimulus programs which at best are not working very well. The capital injected into the economy does not reach the cradles of innovation that generate productive jobs. The government is making the investment decisions and our government does not have a good track record in this area.
If we want to fuel our economy we must put the power to invest directly into the hands of those that make that money work the hardest, the American people. Our present tax system that taxes income removes the fuel for investment from those that innovate in direct proportion to their success. We need to understand, Bill Gate’s incredible financial success has been shared by the employees and investors of Microsoft. Instead of penalizing success we should encourage it by allowing the capital to remain in the hands of those that are using it successfully.
One method to do this is to move from taxing income to taxing consumption. Every product that is made in the United States has an extraordinary tax burden hidden in it. The products that are made must pay not only the income taxes of the corporation, they must also pay the property taxes, income taxes and fees for everyone that derives their income from that corporation. It must also pay for the record keeping and tax reporting for those people.
This process of tax collecting not only punishes success, it embeds inefficiency in our economy. It drives individuals to make decisions based on tax consequences rather than basing those decisions on productivity improvements, innovation or capital development. If the current income based taxation were moved to a consumption based system rather than the current income based system, we as a nation would be driven to invest or save our money. We would do thisw because the income from the investments would be tax free, our money. We would pay tax only when we made a purchase.
The effect of this would be to immediately expand our income and to reduce the cost of our purchases. How can that be you ask? The initial impact would be the reduction of manufacturing and distribution overhead. We would also see an immediate repatriation of US dollars currently living in foreign countries where they receive more favorable tax treatment. We would see foreign investment drawn to our country. All of this equals more fuel for the expansion of our ability to produce. This improvement in the economy would not necessarily result in the dreaded inflation because the system would encourage increased investment rather than increased consumption. Taxes discourage activity.
Our right to decide how we spend our money should be considered as a right protected in the same context as our right to free speech. If the citizens of our country are given the right and the responsibility to manage their money, some won’t but many will. If our government returns to the American people the right to manage their funds, their will be a few that will innovate, use their creative freedom to produce. We as a country need to tax the consumers of our products rather than the producers of the success. As a country we need to understand that the geese that lay our golden eggs are not to be punished. We need to celebrate and encourage success. We should demand that our government not intrude or impede unduly on the industry and investors of our country. We should demand that we be allowed to be Great!
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