Friday, October 1, 2010

An Independent Conservatives View on Limited Government, an Objective Tax Code and Regulatory Overreach

by Les Carpenter
Rational Nation 

As the nation quickly approaches the 2010 midterm elections and Tea Party fervor reaches a fever-pitch I ask that you take but a moment to reflect. What - if anything - might change should the Tea Party candidates claim victory and Republicans take back the Congress?

My fervent desire for years has been to cast aside politicians on both sides of the political aisle and elect candidates that actually stand on principle. Ideally, this translates to those that adhere unflinchingly to the principles of limited government and individualism. American Constitutional principles that allow for the greatest individual liberty possible while also requiring the individual to accept and embrace the concept of individual responsibility are the prescription to right our national ship.

What does the term limited government mean? More importantly - what do the Tea Party and Republican candidates believe the term means? Even more importantly, what will they do if the reins of Congressional power are turned over in 2010?

My answer is --- nothing.

It is unfortunate, however likely that tea party candidates will simply continue the same big government overreach we have witnessed for decades. Recall Ronald Reagan’s call to trim government, make it more effective, and essentially ‘starve the beast’? While he succeeded in slowing the growth of government, the Leviathan continued to extend its tentacles into every corner of America with armies of enriched special interests, side by side.

The best the Gipper could do was to marginally slow the trajectory away from limited government.

What conservatives should want and support are candidates that not only talk the talk of limited government but also walk the walk. Ron Paul is perhaps one of the few individuals in American politics today to come close to doing so and he provides a stark example to follow.

To expand upon the subject of limited government, I will limit today’s commentary to taxes and regulations.

By way of definition:

Limited - characterized by enforceable limitations prescribed (as by a constitution) upon the scope or exercise of powers...

Government - the act or process of governing, specif.: authoritative direction or control...

From these definitions the concept of limited federal government is crystal-clear. The U.S. government to retain its right to govern must do so within limitations as set forth in the Constitution and the tenth amendment . The federal government has a clearly defined function that has been all-but-ignored.

In essence we have allowed our government to create a tax code that is as mind-boggling as it is convoluted, requires hundreds of thousands if not millions of pages, and keeps the tax accountants and lobbyists in business. It also creates uncertainty within the business sector and markets, and decreases our competitive standing in the world.

Achieving limited government in taxation would be quite rudimentary and uncomplicated, were it not for the pull peddlers. But the moment the United States government instituted the graduated income tax with its exemptions, deductions, and loopholes the stage was set for the Leviathan tax code that exists today. Slaying Leviathan will not be easy but it is necessary. Conservatives should love to hear somebody in the Tea Party or Republican Party shouting it from the rooftop.

I present, therefore, an "independent" conservative solution. Such that would give government increased tax revenues and simplify the tax code so Reagan's idea of the post card return could be realized. It would also eliminate the need for tax lobbyists that are engaged in “protecting” the interests of business.

1.1 - Graduated tax would be retained for individuals gross earning up to 35K.
1.2 - All gross earnings above 35K would be taxed at a flat rate.
1.3 - There should be no exemptions, deductions or other considerations that would have the effect of lowering the taxable amount.
1.4 - Individual tax rate of 10% on all gross income above 35K. To change this should require a 60% affirmative vote of the 50 states making up the union of The United States of America.

2.1 - Businesses and Corporations should be taxed on the flat tax basis.
2.2 - Business and Corporations should cease to receive government subsidies and corporate welfare. Too big to fail would no longer be an operative word.
2.3 – Deductions for businesses and corporations should be limited to legitimate business expense as defined by current cost accounting principles.
2.4 - Business and Corporate tax rate should be 10% after legitimate business expenses are deducted.

Simple and straight forward, the above would create an environment in which everyone would know month to month and year to year what their tax liability would be. Planning for business investment and expansion would thus proceed on a stable, level, playing field that would exponentially increase the dynamism of American entrepreneurism.

A common stumbling block when discussing limited government is the nature of, and need for, regulation. Few would disagree with the premise that government has a role in protecting the public safety. Even the staunchest conservative advocates of limited government support the belief that government has some responsibility in protecting the public safety and the environment. As an example, note the pronouncements LA. Governor Bobby Jindal made during the BP oil spill.

Inversely, most can agree the level of myriad and often incoherent governmental regulation is both costly to business and serves no real public purpose. Beyond staggering costs, the very businesses that create jobs and spur economic growth are significantly and negatively impacted by frivolous and unnecessary regulatory restrictions. I refer you to John Stossels spot on video covering the subject of over regulation as an illustrious example of this.

The cost borne by business and corporations as a result of our regulatory framework is significant and frankly often unnecessary. Freeing business and corporations of the unneeded and unnecessary burden of regulatory control would be a major leap towards improving our industrial competitiveness in the global marketplace.

To use an analogy - giving one dog preferential treatment over his fellow dog is both unethical and counterproductive. Government regulation should only serve to benefit the critical public interest, not the interest of the individual or the business interest with the most money to contribute to a candidate’s electoral aspirations.

Plainly put - get the lobbyist out of the picture by revising the tax code and we would most certainly have a more vibrant and productive economy.

If the Tea Party wants to truly distinguish itself from the "establishment" then let it pronounce and then act upon the tenets of limited government, maximum individual freedoms and ethical behavior in all public and personal pursuits. So far, with the exception of Senatorial candidates Marco Rubio in Florida and Rand Paul of Kentucky, I fail to see any distinction from business as usual. In other words we are merely witnessing Republicanism undergoing cosmetic surgery.

I hope that I am wrong.


  1. This is an excellent manifesto of sorts for the limited governement movement - especially from the taxation and regulation angle.

  2. This was well stated:
    The U.S. government to retain its right to govern must do so within limitations as set forth in the Constitution and the tenth amendment.

    It has burst its constitutional bounds, and therefor has no right to do much of what it is now wasting trillions doing.

    I recommend the chapter on the rule of law in Hayek's "The Road to Serfdom."

    You have laid out your plan, Les, based upon the rule of law. Laws should be understandable, applicable to all, and not overly regulatory.

  3. LCR - Thanks.

    I just wish more people were looking at it from this angle.

    Perhaps someday...

  4. Silverfiddle - Indeed the rule of law. How quickly the nation has forgotten.

    But then with the majority in academia, the judicial branch, and the lame stream media all going left long ago what else could we expect?

  5. I agree that simplifying the tax code and regulations is an admirable goal. One question on taxation. Why not tax both individual and business on gross income, or allow both deductions for legitimate expenses required to exist?

  6. The problem with any limited government movement is that proponents of limited government aren't perfect. So the left finds some flaw, big or small, and attacks ferociously. Then conservatives fail to defend their own. And in some cases, they join in the attack.

  7. RightKlik - Your point is certainly a valid one. Conservatives biggest problem,IMHO, is they have strayed from conservative principles that energized the movement during the Goldwater era.

    As I have said many times a solid modern day "independent conservative" is also a "clasical liberal" in the vein of Thomas Jefferson.

    The founders had many differences and argued hard before finally handing the people the model that has governed our republic since.

    And we have strayed far afield from the founding document they left for us.

    The question that remains to be answered is... Are there people today with the the intellect the founders had, and if so will the voters of this nation allow them to change our trajectory to return us to sane economic, fiscal, and tax policy.

    The clock is ticking.


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