The Rubio Disappointment

As a matter of political philosophy, conservatives avoid granting messianic status to politicians – notwithstanding Republicans’ recent penchant for re-naming every rest stop, park bench and sinkhole after Ronald Reagan.

Ideology that embraces citizen government should eschew the deification of political leaders. Human beings are fallible, politicians perhaps most of all, and Republicans ought to know this.

Sen. Marco Rubio (R-FL) was, for a time, an exception to the rule. From his shocking upset of then-Gov. Charlie Crist in the 2010 senate primary, to his election that November, to the fluid way he served up Tea Party tenets, he caused conservatives to swoon. Throw in the fact that he speaks Spanish and still has most of his hair, and that was it. Rubio was the Next One, the Republican Obama.

For conservatives, this was intellectually inconsistent. Lately, it seems they know it.

Disenchantment began gradually. There were picayune rumblings over whether Rubio had embellished his parents’ history as Cuban exiles, he was passed over for the vice presidential spot on the 2012 Republican ticket, and he mangled a key passage in his address to the GOP Convention, calling for more “government over more freedom.”

Serious image trouble started with his response to President Obama’s State of the Union Address in February of 2013. He looked awful – not Bobby Jindal-awful, but awful nonetheless.

For a GOP presidential aspirant, this simply isn’t good enough. Democrats have the luxury of being able to look bad, get things wrong, and still win elections with the help of a cordial press. Republican candidates, meanwhile, as Pete “Maverick” Mitchell was once advised, “need to be doing it better and cleaner than the other guy.”

These are largely optics, which are important in politics. But the real Rubio letdown has come from his befuddled and baffling support of the 1,200-page immigration bill working its way through Congress. To his erstwhile supporters, the fact that Rubio would champion this legislation shows how quickly he has become a creature of Washington, DC.

Politicians and journalists care deeply about “immigration reform.” Regular Americans, by and large, do not. Polls consistently show Americans are more concerned about the economy, deficits, health care, the growth of the federal government, and a host of other issues than they are about immigration.

Rubio’s disaffected fans sent him to the Senate to champion their beliefs, not to focus on what the New York Times thinks is important. And if he were to stray, they wish he would be right, or effective. This effort seems like amnesty, decorated with promises of “border enforcement” that will go unfulfilled.

History does not support the oft-repeated nostrum that Republicans must embrace this sort of thing to woo Hispanic voters. Hispanics account for about 8.4% of the electorate. Had the GOP captured 70% of their votes in the 2012 presidential race, Obama would still have won. Further, the last time outright amnesty was enacted, in 1986, Republicans’ share of the Hispanic vote declined in the next federal election.

If Rubio ever did aspire to win the White House, these leftward moves have been unwise, no matter what Lindsey Graham might be cooing in his ear. There is an appetite in the land for what Rubio was meant to embody – a rebirth of individual liberty.

Democrats overjoyed at their ascendancy may cluck that America has rejected conservative politics. The reality is that, on the national level, true conservatism has not been offered for some time.

The last two cycles at least, Republicans have had to settle for presidential candidates that provoked something less than unbridled enthusiasm. Indeed, in 2008 and 2012, Republican enthusiasm was very, very bridled. This was a function of a weak field in 2012, and a misbegotten nomination process in 2008.

Mitt Romney might have been a competent manager, but nothing in his record or rhetoric suggested he would undertake real reform, such as many Republicans crave.

As for Sen. John McCain, from authoring legislation that contravenes the First Amendment, to obsessing over fashionable silly-bears like “climate change,” he represents Washington Republicanism at its worst. Even if he had somehow been elected, one suspects his act would have worn thin after one term. (Question: If McCain had won in 2008, would Hillary Clinton be president today? Discuss.)

Rubio emulates McCain, if not in cantankerousness, in senatorial detachment from the actual concerns of Americans. Witness the appalling contrast between Rubio’s 2010 self and the more recent, Schumer-snuggling version, flailing to defend what he himself calls a “laundry list” of immigration expenditures.

As syndicated columnist Charles Krauthammer says of the proposed legislation, “it’s all inputs.” Rubio trumpets the 20,000 new border patrol agents, the 700-mile wall, the drones, and, most of all, the money being spent. After barely three years in the Senate, he imagines this is a strong argument.

In this way, Rubio demonstrates why America has only elected three of its presidents directly from the self-described “World’s Greatest Deliberative Body.”

Marco Rubio was never the answer to America’s problems, and conservatives should not expect any politician to be.


Theo Caldwell, host of TV’s Global Command Centre, has been a member of the New York Stock Exchange, the Chicago Board Options Exchange, the American Stock Exchange, and the Kansas City Board of Trade. He can be reached at at theo@theocaldwell.com

Canada: Land of the Free

“It’s so clean and bland – I’m home!” –Marge Simpson, on arriving in Canada

With its mild manners and measured expectations, Canada has long served as North America’s straight man. From Michael Moore’s Canadian Bacon to The Simpsons to South Park, American comedy has tapped this area like the oil sands.

On one of their several sojourns to the Great White North, the Simpson clan pass by the set of a film called Canadian Graffiti, in which a street punk spray-paints three words on a wall: “Obey the rules.”

And this is largely the rap on Canadians: Even when they try to be edgy, their deference and decency win out, such that their rebellious affectations have all the authenticity of a hard-core Christian rock band.

But Canada is far from American stereotypes of socialism, centralization and obeisance, at least in relative terms. By almost any measure, Canada is a freer country than the USA.

Economically, the contrast is stark, for those who care to see. While folks reflexively state that Canadian taxes are higher than those of the United States, corporate and personal rates are lower up north, as is effective treatment of investment income. Moreover, Canadians and their families who reside abroad are not subject to the worldwide taxation and reporting requirements imposed on Americans by the IRS.

When Canada was spared the worst of the 2008 economic collapse, American liberals spoke wistfully of comprehensive Canadian financial regulations, as though this were what preserved Canucks’ multi-colored money. In reality, Canada’s good luck was a function of culture, not laws. Canadian banks had limited their exposure to misguided mortgage-backed securities, consistent with the country’s generally cautious investment philosophy.

Meanwhile, America responded to the crash by providing its oppressive Sarbanes-Oxley financial legislation with an equally Byzantine follow-up, Dodd-Frank.

For decades, Americans have debated the merits of Canada’s “socialized” health care, yet much of what Americans think they know about the Canadian system is wrong. Yes, Canada nominally maintains a single-payer plan, with taxpayers footing the tab for universal coverage, and there are prohibitions against the private purchase of services. In reality, about one-third of medical procedures are purchased privately and Canadians with the means often go to the United States for treatment (which has lately begged the question, if Obamacare is implemented, where will Canadians go for their health care?).

Ironically, in this era of mass communication, freedom of speech is hard to come by, and Canada is no exception. Even so, with the abolition of the Canadian Criminal Code’s Section 13, which punished so-called “hate speech,” Canada leads the Western world in reclaiming the right of individual free expression from the ravenous maw of political correctness.

Such legislation was nowhere near unique to Canada, as charges of “hate speech” are a ubiquitous tool of the worldwide Left, intended to silence opposition while elevating their approved opinions to the level of law. But the fact that Canada has abolished this shameful codification of censorship reveals a tendency toward renewal of liberty that the United States, and other nations, would do well to emulate.

As to day-to-day freedoms, and the likelihood of encounters with armed agents of the government, Canada is not immune to excesses by its authorities. Two quick examples: In 2010, during the G20 conference in Toronto, police brutalized civilians and conducted mass incarcerations of innocent bystanders; and, subsequent to the recent floods in Calgary, police were observed entering private homes and confiscating legally owned firearms.

But these are, thankfully, notable exceptions. Canada lacks the institutional and cultural predilection for ubiquitous policing and routine incarceration, such as exists in the United States.

As the greatest columnist in the world, Mark Steyn (also a Canadian, not coincidentally), has repeatedly observed of the US, “every tinpot makework paper-shuffling bureaucracy now runs around pretending to be Seal Team Six.”

The Department of Education dispatches SWAT police to enforce student-loan compliance, the IRS sends militarized thugs to make collections, and that’s before even contemplating the enormity of the Department of Homeland Security, the NSA, and so on.

While representing five percent of global population, the United States holds twenty-five percent of all the prisoners in the world, and incarcerates people at a rate 13 times greater than the nation’s population growth. Canada, meanwhile, reserves harsh criminal penalties for crimes like murder and holding up the Tim Horton’s drive-thru lane.

The relationship between Canada and the United States, while imperfect, represents one of the great successes of international affairs. Even so, relatively speaking, the true Land of the Free is the Great White North.


Theo Caldwell, host of TV’s Global Command Centre, has been a member of the New York Stock Exchange, the Chicago Board Options Exchange, the American Stock Exchange, and the Kansas City Board of Trade. He can be reached at at theo@theocaldwell.com

Don't Politicize the IRS, End It

According to Internal Revenue Service Commissioner Danny Werfel, the agency’s internal investigation of recent scandals has, “not found evidence of intentional wrongdoing by IRS personnel, or involvement in these matters by anyone outside of the IRS.”

This is meant to allay concerns that the IRS subjected conservatives and Tea Party groups to audits and inappropriate questioning out of political motivation, or under orders from the White House.

As part of Werfel’s 30-day progress report on the IRS’ scrutiny of itself, much of which is hidden from taxpayers, he suggests it was not only limited-government and right-of-center outfits that received zealous inquiry when applying for tax-exempt status. Presumably, this is submitted as exonerating evidence: The IRS may be officious, but it is unimpeachably even-handed.

One is reminded of America’s second-most detestable federal outfit: the Transportation Security Administration.

In the autumn of 2010, when the TSA ramped up its now-ubiquitous and grotesque security protocols at US airports, including “enhanced pat-downs,” some Americans reacted with justifiable fury. And, for a while, the media and the agency itself responded to citizens’ objections.

Every time a shaky video would emerge of some crying toddler being forced to allow a blue-fingered government stooge to prod the disconsolate tot as a condition of boarding a plane to Disney World, the TSA would conduct an internal investigation. Invariably, they would find that proper policy had been followed.

And that’s the problem: the policy.

If your policy is to violate the rights and dignity of innocent people in the name of protecting their freedom, then saying you followed that policy correctly is no vindication.

The same is true of the IRS. Perhaps it targeted conservatives on orders from the White House and perhaps it did not. The point is, the IRS should not be overseeing political speech in the first place. The policy, not the politics, is the problem.

Freedom of speech is meant to be a protection against government. To have government regulate it, particularly through its power of taxation, contravenes that purpose.

And a long-term solution to the harassment of citizens seeking to exercise their God-given rights is not to be found through internal investigations, or congressional inquiries, or even a special prosecutor. It matters little if Lois Lerner goes to jail and, even if every accusation of IRS meddling in the 2012 election is true, there will be no do-over and Mitt Romney will not be installed as president.

Your political beliefs, the causes you support, and your prayers at church ought not to be subject to government oversight. Whether you are a conservative Christian, or a liberal humanist who advocates separation of church and state, you should find this proposition agreeable.

The remedy, therefore, is to remove that government influence which, by its nature and code, insinuates itself into these aspects of your life. That is, put an end to the IRS.

In the immediate aftermath of the IRS scandals, there seemed a moment when Left and Right might agree to do away with this over-reaching agency. Unfortunately, that comity did not last, and reform seems less likely as politicians have broken into their usual camps.

Democratic Congressman Elijah Cummings has proclaimed the IRS case “closed” and accused Republicans of conducting a “witch hunt” by pursuing the matter further. This is a trap, and Republicans would do well to avoid it. Specifically, while Rep. Darrell Issa and other Republican leaders should continue to press the IRS, they should avoid making the issue partisan, or personal.

Indeed, Democrats wish to protect President Obama in particular, and preserve expansive government in general. And politicians of both parties stand to benefit by maintaining America’s Byzantine tax code, whereby they can parcel out favors to supporters, obscured by impenetrable bureaucratese.

But none of this serves the American people. The tax code’s pervasiveness and the power it grants members of Congress and the entrenched clerisy of the civil service skew incentives for reform.

And reform will remain elusive until Americans make it clear to their leaders that it is in their political interests.

The IRS has been around for a century and no one has ever been happy about it. For most of America’s history, its government was funded by other means. Even today, stronger alternatives beckon, such as a Fair Tax, levied on the purchase of new goods and administered by an office proscribed from taking on any other mandate.

But, despite its relative youth, the IRS looms as immovable in many Americans’ minds (likewise, the TSA is not even a dozen years old, yet calls for its abolition seem stunning to many who cannot imagine America without it).

America does not need the IRS. Five years ago, America voted for Change. In 2012, the country ratified that decision and, one way or another, change is coming. The moment has not yet passed for vision, courage, and determination to ensure we change for the better.

Theo Caldwell, host of TV’s Global Command Centre, has been a member of the New York Stock Exchange, the Chicago Board Options Exchange, the American Stock Exchange, and the Kansas City Board of Trade. He can be reached at at theo@theocaldwell.com

Pardon Edward Snowden

I do not come to praise Edward Snowden, but to pardon him – or at least, to suggest that President Barack Obama do so, if and when he is charged. Even if Snowden has committed crimes, he has done his country, and free people everywhere, a service.

There is heated debate as to whether Snowden is a hero or a villain. Having leaked particulars of the National Security Agency’s information-gathering program, the former CIA employee has given those who would condemn or canonize him much to consider.

He has a hero’s bravery, inasmuch as he opted to follow his conscience and forgo a normal life, honking off the most powerful government on Earth in the process. Conversely, there is some measure of villainy in being given the confidence of an intelligence outfit, only to reveal its methods to the world.

But doing the right thing on a large stage is no proof of heroism. Most heroes don’t get to be famous.

One wishes there were more circumspection from political leaders about the charges Snowden has put forward – that the NSA collects and retains all emails, along with phone records, of US citizens, and has constructed an apparatus for “turnkey tyranny,” in the name of fighting terror.

Instead, we’ve got Sen. Lindsey Graham storming around like Nathan Jessup, insisting these excesses save lives. Sen. Dianne Feinstein accused Snowden of treason. Indeed, politicians of both parties are burnishing their terrorist-warrior credentials by finding new and exciting ways to call this guy a traitor.

Even the most admirable man in American public discourse, Charles Krauthammer, is wrong on this one. He likens the government hoarding private information to police having guns, suggesting neither empowerment is proof of abuse. But besides that the National Safety Council concludes you are eight times more likely to be killed by a cop than a terrorist, the larger question is what befits a free society.

A common tack of both liberals and conservatives defending government surveillance is to state that it is “legal” and “Constitutional,” as though that were the end of it.

In the first place, “legal” has never been a synonym for “moral,” or for “wise.” As to “Constitutional,” we have become inured to the notion that just about anything can be judged so, if you read deeply enough into those squiggly letters on parchment.

Lest we forget, slavery was once legal and, by some notorious interpretations, Constitutional, too.

But let us suppose, for the sake of argument, that if you stand on one leg, tilt your head, and squint just right, you can somehow read this egregiousness as “Constitutional.”

You know what else is “Constitutional”? The Fourth Amendment. It reads:

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

Both cannot be true. Either the warrantless collection of emails and phone data from supposedly free citizens is unconstitutional, or the Constitution’s Fourth Amendment does not mean what it says.

Snowden’s claims that emails are collected by the NSA and can be accessed with ease are disputed by officials, who insist these methods are not used on American citizens or people within the United States. Even so, politicians and intelligence folks remain mad as wet hens that Snowden has revealed their systems.

But again, both propositions can’t be true. Either Snowden is lying, in which case the authorities’ spitting fury seems oddly disproportionate; or he is telling the truth, in which case the revelation of these abuses is a lesser evil than the abuses themselves.

As to phone records, the program’s defenders are eager to explain that it is not voice content but “data points” and “metadata” – phone numbers, durations, locations, etc. – that the NSA collects. Even if that’s true, as other NSA whistleblowers have pointed out, investigators can learn as much or more from whom you called, when and from where, than from the content of your conversation.

All that said, I am more inclined to believe Snowden’s version.
Having watched both of them respond to questions, I find Edward Snowden more trustworthy than James Clapper. As Director of National Intelligence, Clapper has repeatedly shocked the nation with his incompetence – from referring to the Muslim Brotherhood as “largely secular” to being unaware of a terror plot in London that was headline news around the world – but his demeanor is more disquieting.

Watch Clapper’s March 12 responses to questioning from Sen. Ron Wyden about whether US intelligence agencies gather citizens’ private data and decide for yourself. Clapper mutters, runs his fingers across his skull and croaks out legalisms as he studies the table in front of him.

One needn’t be an expert in body language or behavioral science to surmise that when a person keeps scratching his forehead like a tamarin with a rash and comes up with nonsensical replies about “not wittingly” doing whatever he has been accused of, that person is probably lying.

Conversely, whether Snowden is Nathan Hale or Benedict Arnold, he clearly speaks from his heart.

Snowden must be made an example of, some say, because we must prevent more people from doing something similar. The US government hands out security clearances at a rate of 1,800 per day. If there is a problem with information being leaked, perhaps our crack intelligence folks could pull up their own socks before demanding we send every blabbermouth to Leavenworth. In the meantime, I want every punk kid who has access to Americans’ private records to come forward and say so.

Not only will this serve American ideals of personal liberty, as Snowden purported to do, but it will force the peeping Leviathan to reconsider its methods.

Even if other politicians are too incensed to offer Snowden their thanks, the Leader of the Free World should grant him a pardon.

Theo Caldwell, host of TV’s Global Command Centre, has been a member of the New York Stock Exchange, the Chicago Board Options Exchange, the American Stock Exchange, and the Kansas City Board of Trade. He can be reached at at theo@theocaldwell.com

Is America Free?

“I’m proud to be an American, where at least I know I’m free.” –Lee Greenwood

Notwithstanding the earnest patriotism of Lee Greenwood’s anthem, “God Bless the USA,” something about that particular lyric has always rankled. There’s a passive-aggressive prickliness to that “at least” in there, as though it were the final rejoinder of an American arguing in an airport bar, leaving a piece of his mind with some over-served Belgians before slapping down a wad of pink, local currency as a pourboire and hustling to his departure gate for Orlando International.

If he had stayed to chat a little longer, this notional American might have found that his Flemish interlocutors enjoy greater freedom than he, even in the shadow of the bureaucratic colossus based in Brussels, commanding their continent with unchecked power. Or he may simply have discovered, as we all must, that not all song lyrics are true.

Americans of every political stripe are forever banging on about how free they are, without any scale of comparison. It is a time-consuming précis of any such discussion to have to explain to them how their own system works.

This means you, Mr. Ugly American – yes, you with the giant foam cowboy hat and air horn, and you, Mr. Harvard Yard Fancypants with your pince-nez and Rousseauean predilections – your free country locks people up at a rate thirteen times faster than its population grows, and holds one quarter of all the prisoners in the world. Six million of your fellow citizens living abroad, plus millions more of their families, business associates, and people with US ties are required to file with the IRS and send taxes to America, even if they never set foot on your soil. The content of every email you send is intercepted and saved by your government. Not judging you for all this, but figured you should know.

At times, criticism of America is met with hostility and assorted “love it or leave it” nincompoopery from patriots who do not comprehend how the country operates. To wit, in the words of another famous song, America is much like the Hotel California: “You can check out anytime you like, but you can never leave.”

With millions of illegal entrants, and a tax authority zealously guarding the exits, America seems less difficult to get into than to get out of. Recently, I asked an US Consular official about the record number of Americans attempting to renounce their citizenships in recent years. He stressed the complexity, expense and difficulty of the process, in which all financial information of the citizen, their family and associates must be collected and submitted, along with an “exit tax.” The bulging dossier is sent to overseers in Washington, DC, at which point the Land of the Free will, “decide whether to let you go.” The Soviet-style institutional assumption being, should you choose not to dwell in this demi-paradise, ipso facto, you must be some kind of criminal.

Asking if America is free becomes a relative exercise. Free compared to what? Compared to North Korea? Sure. How about, compared to other Western nations or, more importantly, to the ideals of its Founders, whose constructs intended America to be the world’s greatest experiment in human endeavor and liberty?

Among the questions prospective new Americans might be asked on their citizenship test is, "What is the supreme law of the land?" The correct answer, as specified in the official study guide, is: "The Constitution."

Few have been as brazen in pronouncing the Constitution an unwelcome anachronism as was President Woodrow Wilson, though the last century has seen a peculiar, penumbral crusade to twist the plain meaning of the document, while theoretically preserving its primacy. This is how you get to folks supposing James Madison would be A-OK with partial-birth abortion or banning Nativity scenes at Christmastime.

But the reason the Framers did not attach a Rosetta Stone or decoder ring to the Constitution is because the language is plain enough. They understood that less is more, and it is often observed that the Bill of Rights is a list of negative liberties – things the government cannot do – and not one of those ten Amendments is rendered in words that are indecipherable or too numerous to read.

Take, for example, the very first one: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”

That means we can speak our minds in America. No legislator, no matter how adamant or esteemed, may write a law that prevents us from doing this, even at election time (Sen. John McCain, please call your office).

Yet here we are, with almost every aspect of that straightforward proscription demonstrably violated by America’s own government – and the rest of the Bill of Rights in not much better shape.

Recent scandals at the IRS, the National Security Agency and the Department of Justice have renewed Americans’ interest in reclaiming their freedoms. This is encouraging. What is discouraging, however, is the extent to which the debate has become reflexively politicized.

Left and right fight so predictably, even a casual observer of politics could recite both sides now (with apologies to Joni Mitchell). The ideological arguments practically write themselves. Let’s not do that, this time. There is ample blame due both Republicans and Democrats for America’s oppressive and corrupt condition.

A handy example: George W. Bush should not have created the Department of Homeland Security. Barack Obama should not have preserved and expanded it. The next president should abolish it.

Law professor Jonathan Turley writes in the Washington Post of the administrative state, which he calls “the fourth branch of government.” He notes that, “in 2007, Congress enacted 138 public laws, while federal agencies finalized 2,926 rules, including 61 major regulations.” In this context, it is irrelevant who resides in the White House or holds the Speaker’s gavel. America is not a nation of laws, but of rules. Only a renewed cultural will to true reform, coupled with political leadership, can correct that.

Senators Rand Paul and Ted Cruz are among the very few major politicians speaking out in favor of undiluted Constitutional freedom. If and when they run for president, one hopes their advocacy will find a larger audience, regardless of their prospects for victory. And this need not be only a Republican tack. If there is a Democrat who truly believes in scaling back the power and scope of the federal government, we should support that person, too (and one assumes such a Democrat would be easy to spot, as he or she will be riding a unicorn while collaborating with a leprechaun to perfect cold fusion).

Left or right, if people mean what they say about the sanctity of personal freedom and human dignity, now is the time to bring those convictions to bear.

We have learned of the IRS harassing citizens and the DOJ investigating journalists for exercising their First Amendment rights, and the NSA collecting Americans’ phone records and emails. Meanwhile, DHS retains the right to copy the content of phones and computers at border crossings, erects checkpoints along the country’s roads and railways, and the Supreme Court has given its imprimatur to police extracting DNA samples from people who have been convicted of no crime.

Those who cried loudest that water-boarding or "torture" should not be used on hostile foreigners should be equally adamant that citizens not become government property (sorry, Sen. McCain, could you call back, just for a sec?). Similarly, abortion advocates who for decades have told government to keep its hands off their bodies could apply that slogan to the TSA's abuse of travelers at America's airports.

Many of these excesses are undertaken in the name of America’s infinitely elastic “War on Terror.”

Which means what, exactly? Stipulating that this vast and obscene apparatus could not detect Islamist terrorists like the Boston Marathon bombers and the Fort Hood shooter (the latter of whom should have been easy to spot at half the price, since he was a US Army Major who had conducted official seminars on the gruesome things that should befall infidels), let us also assume there are many other plots we never hear of, prevented by these very methods.

But if so, so what? Does this actually save lives? Perhaps. But the Constitution was intended to codify freedom, to lay out God-given liberty such that while they live, future generations could surpass mere survival to enjoy unfettered humanity.

At some point, the suggestion that liberties must be curtailed in order to be preserved becomes very difficult to defend.

The elemental question of whether America is free, therefore, begets myriad other questions, including:

Why does America hold more prisoners than any other country in the world?

Why does America demand taxes from people who don't live in America?

Why does America's tax authority oversee political speech, religious worship and health care?

Why do government drones conduct surveillance of private property from America's skies?

Why does America's government collect the phone records and emails of its people?

And why does America seek to force such practices upon other countries?

Some may respond with a legal or military rationale for this policy or that. But we cannot reply with the simple answer we would most like to give:

"Because America is free."

Theo Caldwell, host of TV’s Global Command Centre, has been a member of the New York Stock Exchange, the Chicago Board Options Exchange, the American Stock Exchange, and the Kansas City Board of Trade. He can be reached at at theo@theocaldwell.com

Fair Tax or Flat Tax?

American public discourse, particularly on the Internet, includes a reliable population that is perpetually honked off, offended, and eager to unleash the awesome power of ALL CAPS against any idea, no matter how commonsensical.

But for all the hullabaloo around the IRS of late, with some claiming complaints against the agency are overwrought, and others going so far as to question the motives, intelligence and parentage of those of us who have called for its abolition, there has not emerged any kind of reasoned argument in favor of keeping the tax authority just the way it is.

What has come to the fore, however, is a healthy competition between two credible, if not complementary, alternatives to America’s current tax system. That is, should we move to a Fair Tax or a Flat Tax?

Simply put, would a consumption tax on goods and services (Fair Tax), or a single, small rate of tax on income (Flat Tax) be a better way to fund our government? The short answer is that either would be preferable to the Byzantine, corrupt tax system America has now.

Folks are fond of saying you can’t replace something with nothing. This is, of course, complete rhubarb, and if the US government could learn to replace something with nothing, it would go a long way toward solving its monumental debt and deficit problems. But in this case, we do need to pay for our public sector somehow, and since it would defeat the purpose to replace something with two things, it behooves us to consider which of these worthy ideas would work best.

First, the Fair Tax: There is legislative support for this approach, as the Fair Tax Act of 2013 works its way through Congress, sponsored by Rep. Rob Woodall of Georgia as H.R.25 in the House, and by Sen. Saxby Chambliss, also of Georgia, as S.122 in the Senate.

The gist of the plan is to phase out the IRS over three years, replacing income taxes with a sales tax on new goods and services, excluding necessities, of 23 percent. This figure is reached by combining the 15% income tax bracket with 7.65% employee payroll taxes, both of which would be eliminated. As to that last, fairtax.org stresses that their plan eliminates the payroll tax, and this is not an insignificant feature.

Many workers, particularly those with lower earnings, feel the bite of payroll taxes when they collect their paychecks, even if they do not end up with a federal income tax liability for the year. If we mean what we say about simplifying the tax code, then whatever system and rates we settle on ought to be straightforward and clear, and should account for whatever effect, if any, payroll and Social Security taxes will have on take-home wages.

A Flat Tax of, say, 10 percent should mean exactly that – not 10 percent, plus additional levies for retirees, unemployment, etc., that are not normally part of the income tax conversation.

If that can be accomplished, there is much to be said for the simplicity and transparency of a Flat Tax. Sen. Ted Cruz of Texas and The Heritage Foundation are among those calling for this approach. Americans spend billions of hours and hundreds of billions of dollars trying to comply with the country’s impossibly complex tax code. The opportunity cost to the productive economy is extraordinary.

Something that is often lost in discussions of income tax is that these rates also apply to small businesses, which create two-thirds of the new jobs in America, and almost all of which file at individual rates. If a Flat Tax can eliminate the expensive and time-consuming task of tax preparation, not only for individuals but for job-creators as well, that would be a boon to America’s beleaguered employment market.

As to revenues, economists of all stripes have looked through this glass onion, trying to make that dove-tail joint, and you will find very intelligent people convinced that a Fair Tax or a Flat Tax cannot replace the revenue raised by the current system; conversely, you will find wicked smart proponents of these ideas who say we cannot afford not to adopt them. Whom to believe?

Concepts like dynamic scoring – meaning, tax policy alters behavior, which should be considered in estimating revenues – are sensible. But, since not everyone acknowledges these factors, let us cleave to the concept of reasonableness. Would either plan get us in the ballpark of where we need to be?

Certainly, they can, and if the political climate that enables either of these policies to be enacted also facilitates spending cuts, more’s the better. The last two presidents, aided by
Congresses led by both parties, have each added a trillion dollars (and counting) to the federal budget over the past dozen years.

Despite this sharp increase in spending, recent silly-bears surrounding the sequester remind us that many insist the current level of government expenditure, no matter how high, is a sacred, serene, steady state, such that even one penny cut might mean Joe Biden has to peel his own grapes.

As a Republic, we can take that risk. So, if a Fair Tax or Flat Tax can get us close enough to the revenue we need, even if it requires pruning the Tsarist lifestyles of our so-called public servants, so be it.

Mission creep will also be an issue, with either a Fair Tax or a Flat Tax. Lest we forget, when the income tax started in 1913, the top marginal rate was a whopping 7 percent, applicable only to a relative few people. Politicians, present and future, will be eager to expand and increase the scope of the new system, and taxpayers must remain vigilant.

Questions linger, such as whether a Fair Tax would inhibit productivity, or spawn underground markets, and just what “necessities” would be excluded? Likewise, what would become of charitable or mortgage interest deductions under a Flat Tax? Each of these merits debate, but they are soluble. Considering our current system has the IRS shelling out $50 million for its agents to learn line dancing at sleep-away camp, even imperfect replacements represent serious improvement.

Further to that, while we remember that this discussion was brought about by scandals at the IRS, including hassling of groups seeking tax-exempt status, along with audits and harassment of people who donated to political candidates or raised their voices in the public square, the issue should not be consumed by politics or prosecutions.

Odious as Douglas Shulman, Steven Miller and Lois Lerner may be, they and the rest of the IRS squadron of winged monkeys that descended on Congress recently are beside the point. When you create an unaccountable, bloated bureaucracy, these are the sort of people who show up to run it. They and their ilk are not unique to history, nor are they helpful in solving the problem.

So again, which should we choose, a Fair Tax or a Flat Tax? The answer is: whichever one can gain traction.
The primary question of whether to abolish the IRS having been answered in the affirmative by both sides, disagreement between Fair Tax and Flat Tax proponents is akin to the quarrels of the Yooks and the Zooks in Dr. Seuss’ Butter Battle Book(to whatever extent Seuss intended the tome as a moral relativist metaphor for the Cold War, it was misbegotten – but it actually works here). In that tale, both sides enjoy toast, but are at loggerheads as to whether it should be buttered on the top or the bottom. The applicable lesson here is, having agreed on the big issue, residual differences can be worked out over breakfast.

And so they should be, with the American people as arbiter (though if everyone’s coming to the breakfast, making a reservation seems sage). Politics being the art of the possible, if there is an appetite in the land for a Fair Tax, and political leadership able to make it happen, Flat Tax folks should sign on, perhaps keeping personal lists of I-told-you-so’s, in case the system falters. Likewise, if the Flat Tax finds a market and effective champions, Fair Taxers should offer support.

Whichever option prevails, let us seize this opportunity to reform America’s tax system and change the country for the better.

Theo Caldwell, host of TV’s Global Command Centre, has been a member of the New York Stock Exchange, the Chicago Board Options Exchange, the American Stock Exchange, and the Kansas City Board of Trade. He can be reached at at theo@theocaldwell.com

 

How to Answer the IRS

“I have not done anything wrong. I have not broken any laws. I have not violated IRS rules and regulations.” –Lois Lerner

Herewith, the former director of the Internal Revenue Service’s Exempt Organizations division, now enjoying fully paid administrative leave at taxpayer expense, provided the perfect template for responding to her erstwhile agency. To wit, the next time the IRS contacts you with questions, just quote Lois Lerner.

This was, of course, part of the abortive account Ms. Lerner gave to Rep. Darrell Issa’s committee as it investigated abusive and improper treatment of conservative groups by the IRS. But in saying little, Ms. Lerner spoke volumes.

It is a funny thing, the urgency and insistence with which the IRS demands particulars of citizens. We are expected to respond promptly to them – yet they decline to answer to taxpayers. The richest bit of all, of course, is they work for us, despite their misapprehensions to the contrary.

Ms. Lerner’s testimony – to the extent her self-serving opening statement, followed by a contemptible refusal to answer questions, can be classified as such – was only one part of the parade of horribles that has passed before Congress. Former IRS Commissioners Douglas Shulman and Steven Miller were utterly reptilian in their committee appearances and, for America, the spectacle should be instructive.

Have a look at these people, all of them. See their smug, superior expressions, witness their imperious attitude, hear their unctuous words. These are individuals drunk on administrative authority no one voted them, intoxicated by petty power, and made to feel invincible by bureaucratic anonymity. In short, this is your tax department at work.

And perfectly consistent with the new administrative state, those who fail or misbehave are rewarded. Beyond Ms. Lerner’s paid, indefinite vacation, Sarah Hall Ingram, who was commissioner for the IRS’ tax-exempt division while it targeted Tea Party groups, has received over $100,000 in bonuses and placed in charge of Obamacare enforcement.

Put another way, the well-paid, unelected, formerly unknown bureaucrat who, despite working in the tax department, somehow became the arbiter of free speech, will now be in charge of scrutinizing your health care. Incidentally, if you think you can guess what such a person would look like, you’re right.

This column has advocated abolishing the IRS and, thanks to this recent imbroglio, one no longer requires a tri-corner hat and Gadsen Flag to advance this policy position. This may be, as many have suggested, the most damaging of the scandals currently facing the Obama administration. But Obama will never face the voters again. What is much more significant is that politically uninvolved people, who heretofore had only a vague notion of the IRS as a necessary evil or a punch line, are coming to comprehend that the system is rotten and should be changed.

A shift is occurring. People can see that a necessary evil might be just evil, or at least illegitimate, such that its demands do not carry their previous heft. If and when I hear from the IRS, will it be because I published this column? Or you, gentle reader, will you receive an unpleasant missive because you read or circulated it? We cannot know, and therein lay the insoluble problem of legitimacy.

It’s not even a matter of being high-profile or important (you very well may be, though I most certainly am not). An automated system or assigned civil servant (to the extent there is a difference nowadays) could easily track and store information on inconvenient people, matching names for audits and inquiries. Considering the revelations of the past several weeks, does such a process seem far-fetched?

So again, let us abolish the IRS. The institution was never liked, but plainly it cannot be trusted, either, and one is desolate to conceive of a scenario in which its legitimacy is regained.

No matter how straightforward and sensible an idea, any idea, there are always cranks and contrarians who find some reason to be opposed (Chuck Schumer, please call your office).

In this case, it would be interesting to hear from disinterested defenders of the status quo. Is there anyone out there who can seriously contend that the United States, ostensibly the greatest nation on Earth, cannot come up with a better system to fund its government?

This is a legitimate question. Do you really believe the IRS is the best we can do, and will you defend its continued existence? You are cordially invited to respond.

Meanwhile, if the IRS comes calling, just tell them what Lois Lerner said.

Theo Caldwell, an international investor and broadcaster, has been a member of the New York Stock Exchange, the Chicago Board Options Exchange, the American Stock Exchange, and the Kansas City Board of Trade. He can be reached at at theo@theocaldwell.com