A New Voting Bloc: the Democrat/ Independent/Republican Moderates of America (DIRMA)

Apr 25, 2012 by Guest Voice

A New Voting Bloc: Democrat/ Independent/Republican Moderates of America (DIRMA)
by A DIRMA

I personally belong to the lost tribe of the Republican Party… “The Moderates”. I would guess that my fellow moderates who happen to be of the Democrat Party may feel similarly “lost”. I am therefore going to coin a name for a new bloc, the Democrat/ Independent/Republican Moderates of America (DIRMA) and propose one possible set of positions on current issues for such a group. Please note that this is just one possible set of proposals and does not pretend to be THE moderate manifesto. The fact that many of these “moderate” proposals would have been considered radical fifty years ago illustrates just how extreme today’s positions of the far right and far left have become. We’ll start with Taxes, Social Security and Jobs. Then maybe discuss other areas

I – TAXES

1) DIRMAs are willing to accept some across-the-board tax increases as part of closing the deficit. They are however against “REPRESENTATION WITHOUT TAXATION”. Half the adult citizens (including some in virtually every income range) currently pay no tax at all. Everyone, rich or poor should pay no less than a minimum tax of, say, 5% of their gross income (including all income and with no offsets, deductions, credits, etc.), period. If, even with this proviso, an individual still don’t even pay, say, $500 in taxes (say $750 if filing joint) , they don’t get to vote.

As somewhat of a precedent, the founding fathers only allowed property owners [who were therefore perceived as having a tangible “stake” in what was happening) to vote. The 21st Century version would logically be that if you don’t pay income taxes, you don’t get to vote on electing the people who will determine how the tax money is spent.

2) DIRMAs think it is counterproductive for both political parties to waste political capital fighting about letting the tax rate go back up for higher income taxpayers. There are many, many tax incentives that have been built into the tax code over the years to encourage certain desirable expenditures on the part of individuals in return for some tax relief. Therefore, high income tax payers have plenty of ways, under our current tax code, to reduce their tax burden. (Buffet is right on that count). Let the rates rise.

3) DIRMAs are not taken in by Congress’s charade that businesses pay taxes. The taxes that businesses are charged are of necessity passed on by being built into their product’s selling price. It is we purchasers are really still paying the tax. Corporate taxes are therefore nothing but a hidden sales tax. Worse, sales taxes are usually considered to be regressive taxation since they disproportionately hurt lower income people.

This hidden sales tax is even more insidious in that it makes goods of US companies who are forced to add it to their prices, more expensive than goods of foreign companies, who have to add in only their much smaller tax burden. This charade therefore costs jobs as well. DIRMAs want to get rid of most business income taxes (which make our USA made products more expensive than goods made in all the other major countries, who do not heavily tax their manufacturers).

4) DIRMAs could support one new business tax which could be beneficial. It would be a sort of property tax, but which taxes excess cash reserves. This is analogous to the concept of “land value taxation” wherein only land is taxed (whether farmed or built on or not) to discourage letting property just sit unused. Taxing excess cash could incentivize companies to either put the cash to work in efficiency improvements and R & D or pay it out to shareholders (as dividends or stock repurchase) who will themselves put it to work. (It could not be paid out in unearned and undeserved bonuses!)

5) DIRMAs don’t have a problem with lowering the cap on the home mortgage deduction. The mortgage deduction was originally conceived as a way to encourage home ownership. It was never intended to encourage mansion (or multi-home) ownership. Limiting the mortgage interest deduction to $15,000 or $20,000 when the rolling average long term mortgage rate is 4% and then indexing the cap as interest rates change year to year, would not have little or no adverse effect on the middle class taxpayer and would yield lots of tax revenue.

II – SOCIAL SECURITY

1) DIRMAs are also not taken in by another Congressional charade. Congress has, for decades hidden the true magnitude of the Federal deficit by borrowing from the Social Security Trust without paying a competitive interest rate such as an individual would have to pay. (The federal government is in essence, borrowing your money, which you paid into the Social security Trust, and then not paying you a fair yield for the use of your money) If all that interest difference was ever to be repaid to the Social Security Trust on a compounded basis for all the years that this has gone on, there would probably be much less of a “Social Security Problem”. Maybe we would be better off controlling a portion of our Social Security funds. At least the Federal Government couldn’t “borrow” that part and pay little or no interest for using it.

2) The senior DIRMAs are not taken in by Congress “blowing smoke” on what a good deal they’re “giving us” on Social Security. DIRMAs can do the math. When we who have been paying in for forty or fifty years calculate how much we paid in (and add to that what our employers paid into Social Security for us) and then run it up on a (conservative) compounded 5% interest rate for all the years we worked before retirement, we find we today actually receive less in Social Security than what the interest payout alone would be on that total accumulated balance.

III – JOBS

1) DIRMAs don’t like it that the current labor, tax and regulatory policies of the US government (and some state & local governments as well) actually incentivize executives to move jobs overseas. What are needed are some policies to offset these pressures. For instance:

a) Reduce or eliminate the corporate income tax (see TAXATION)
b) Work harder to level the regulation playing field
c) We must find better ways to incentivize companies to spend on automation to improve domestic productivity. Grant type incentives may need a hook. Government grants to fund job saving automation equipment or R&D investments would have to be repaid with stiff interest penalty should any of the claimed “saved jobs” be moved outside the US within say 10 years.
d) Impose a retroactive penalty tax on all jobs moved outside the US to cover the cost of unemployment for each worker, plus the four others in the community that this job supported, for two years. Too often we forget the ripple effect of lost jobs on the community and country. On the average, each manufacturing job supports four jobs in the service and supplier activities in the region.

2) There has been so much focus on the loss of manufacturing jobs to overseas operations that another “loss of jobs” segment is often overlooked. In 1980, the US only imported $2.4 billion worth of food products while exporting $15.5 billion for a significant favorable trade balance of $13.1 billion. In the most recent year for which I have data, 2005, the US imported $17.5 billion while exporting $25 billion for a much smaller favorable balance of trade of $7.5 billion. The additional $15.1 billion increase in food imports translates to a loss of about 200,000 US farming and transportation jobs.

(In this same time frame, Australia increased its favorable balance of trade from $3.2 billion to $8.9 billion, Canada from $1.1 billion to $5.2 billion, Spain from $1 billion to $6.9 billion, Argentina from $1.2 billion to $5.6 billion, New Zealand from $1.5 billion to $4.9 billion, Brazil from minus $0.7 billion to plus $6.3 billion and the list goes on. Even China went from being a $1 billion net importer of food to a $3.3 net exporter.

In addition to the higher business tax burden and the higher benefit costs burden on farming, the US price support system tends to further increase the price of American farm products, making us even less competitive. Fix the corporate tax and benefit cost problems and phase out price supports. It would seem logical to form an Organization of Food Exporting Countries (OFEC).

3) DIRMAs recognize that one underappreciated area of job growth is in the non-profit sector. (Between 2007 and 2010, non-profit employment grew at a cumulative rate of 5% while the for-profit sector was declining at an 8% rate). It is surprising to learn that non-profit organizations employ 10% of all private workers, trailing only manufacturing and retail. The message here seems to be that Congress should be very careful in enacting legislation that would have a negative impact on this sector.

4) It may seem counter intuitive but one way to increase jobs is to actually reduce employment in “non-wealth-creating” occupations, which are a huge drain on the economy. (and contribute to making us non competitive) One of the major factors here is the very large numbers of people and their talents tied up in our military establishment. Freeing up some of our best and brightest workers currently serving in the military can, in the long run, create many more jobs in the private sector.

A. DIRMA is the pen name a person with a M.S. Degree, veteran, retired after 50 years of broad business experience ranging from small business ownership to corporate officer of major corporations to management consultant, published author of business book/magazine articles.

Donate to The Moderate Voice

Share This