Bruno Behrend

Bruno Behrend, J.D., is a founding director of American Transparency and a former radio host. In 2008, Behrend coauthored Illinois Deserves Better - The Ironclad Case for an Illinois Constitutional Convention, the release of which coincided with a campaign to pass a referendum calling for a Constitutional Convention in Illinois. Mr. Behrend has served as an advisor to groups seeking to rewrite the legislative article of the Illinois Constitution and as Field Director for FreedomWorks (www.FreedomWorks.com) inIllinois. In 2009, he was policy director for a gubernatorial candidate in the Illinois primary election. Mr. Behrend is a graduate of University of Illinois (1983) with a degree in finance and a graduate of IIT-Kent College of Law (1990), and is licensed to practice law in the state of Illinois.

VAT Tax Redux, New Proposal, and Barone’s piece in SF Examiner

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This lonnnnng post was prompted by an email linking Michael Barone’s latest SF Examiner piece, which asks Republicans “Now what?” after assuming some strong gains in November.  I have a few ideas on the “now what?” question, and I can’t think of a better place to post them than on this excellent blog.

First, I can’t thank you all enough for the excellent commentary and critiques on my recent “Swapping a VAT for failing income tax is Good Policy” post a week or so ago.  I’ve commented on many of your ideas, and I think you’ve changed my mind on a thing or two, which you will notice below.

I wanted to follow up that post with another proposal that fixes the primary problem with going to consumption taxes, which is their impact on the working poor and middle class. One benefit of a consumption-based tax regime is that it captures money from every transaction, making every one a part of the solution to our fiscal mess.  It is also far more stable than a highly skewed progressive system that only taxes the rich. (Social Security notwithstanding)

The most difficult political and policy problem preventing the adoption of a consumption based tax system is that it places a “burden” on the working poor and middle class. (burden being interpreted both in policy and political terms)

Simply put, in a consumption tax system, the lower end of the earning spectrum pays a much greater share of their income in taxes than the rich.  Many will argue that this is “unfair.”  Leaving that argument aside, it is fair to say that this problem MUST be resolved before any politician is going to risk moving the entire system away from income taxes.

I propose such a solution in this post, beginning with my answer to Barone’s “Now What?”

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Swapping a VAT for failing income tax is good policy

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Check out Bruce Bartlett on the VAT here. Rather than surrender, as Bartlett does, why not win?
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Premise 1 – As our Federal government runs away from the entitlement mess they themselves created, some states are starting to see bankruptcy looming on the horizon. As the left clamors for tax increases to feed the beast, the right sits back and says “no” to everything, ignoring the fact that the left is going to get their tax increases by simple operation of time and demography. This may be good strategery in the short term, but the right is setting itself up for miserable failure, as they will forced to become the “tax collector for the welfare state.”

Premise 2 – The reliance on the income tax as a revenue generator has failed miserably. First, the right, since the 1980s, has been so successful in removing much of the working poor and middle class from the tax rolls. This makes much of the electorate immune to what is now pretty much a siren song for “tax cuts.” This has resulted in dramatically weakening one of the right’s most powerful political tools.

Second, the income tax is a horrible way to collect revenue. When times are good, only the rich now pay, and when times are bad, revenues collapse, as we can see in places that rely on the steeply progressive income tax (CA and National Budget). Add to this fact the negative impact that progressive income taxation has on investment and incentives, and you have a very destructive tax.

Premise 3 – The right, and this includes the libertarian and conservative think tank sector as well as the Republican party, is making a substantial strategic error in ignoring the potential (political and economic benefits) of a massive tax swap. By dissing every proposal for revenue increases (and No, tax cuts aren’t going to work with a $1.4 trillion deficit and a hangover from a 25 year spending/debt/tax cut binge), the right is falling for the trap of arguing for tax cuts for a shrinking class of people while arguing against a superior policy – namely broadening the tax base and making everyone pay for the welfare state that still has substantial political support.
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If the above premises are substantially true – and I can make an extended and extensive case that they are – then our “center-right” leadership is failing us in merely saying “no” to all tax proposals, and gambling on the ability to drag this cycle of stupidity around one more time.

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Thoughts on Codevilla’s “Ruling Class” article

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Much has already been said about this excellent article.

Rather than pile on the (deserved) praise, I want to ask the following question(s).

How does one defeat this “class?” What strategies will succeed? What resources are necessary? I think these are important questions because the article succeeds in raising our consciousness to the problem, but doesn’t offer a game plan as to how to proceed. It is up to us (Country Class) to develop one. After developing it, we need to start executing, regardless of whether others come along with us.

Let me start with a few observations.

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The “Overton Window” and how to apply it

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With Glen Beck having discovered the “Overton Window” more than 2 years after I did, I thought this would be a great time to re-post my essay/post from Jan. 2008.

Being new here, I thought this might be an nice place to repost it.
Note that this was posted pre-Obama and pre-tea party. I think it is still wholly relevant, but I luxuriate in the fact that the “hand is on the other foot now.”
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I found a good post over at a pretty good lefty blog. Apparently, some Champaign-Urbana blogger named “The Squire” started blogging again, and he posted something pretty significant here. (clicking the link will get you an interesting and polite discussion)

The poli-sci concept is called “the Overton Window,” and if you want the very short version of it, I can boil it down to five words.

“The Limits Define the Center”

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