NOT AN ENCOURAGING EXPERIENCE

Yesterday afternoon I had the privilege of testifying before the (take a deep breath) Senate Subcommittee on Federal Financial Management, Government Information and International Security of the Senate Committee on Homeland Security and Governmental Affairs.  I testified at the invitation of committee chairman Tom Coburn (R-OK) who, by the way, is a Senate sponsor of The FairTax Act. [read text of my testimony]

The purpose of this hearing --- and no, I have no idea what it had to do with homeland security --- was to hear testimony on ways to close the "tax gap" and simplify our tax code. 

Tax gap?  What's that, you ask?  Well, it's the difference between what people owe and what people actually pay.  The capital gains tax gap, for instance, is the difference between what taxpayers owe in taxes on their capital gains, and what they actually pay. 

Now since the subject at hand was how to get people to pay more of the taxes they owe, you might expect that there would have been much said about how to gather the information necessary to better enforce our tax laws.  Well, you would be right.

I made some quick notes while I was waiting to testify.  Here are some of the nifty ideas that were being tossed around as to how to get more people to pay the taxes they owe:

• Credit card gross receipts reporting.  Now, details weren't available to fill in the blanks for an outsider like me, but I suspect that the idea here is to get credit card companies to report to the IRS the amount of gross receipts a particular business might rack up from customers using credit cards.
   
• Enhanced third party reporting.  I would imagine that this means the government should go to greater lengths to get third parties in financial transactions to make a report to the feds as to the details of that transaction.  Just guessing, but would this mean that if you write a check to your landscaper the bank where you have your checking account would report that transaction to the IRS?
   
• Change the currency every five years.  Yup, no kidding.  One of the witnesses (if memory serves me he worked for the IRS) suggested that we change our currency every five years or so.  This would keep people from hoarding large amounts of cash, or sending that cash overseas to work.  Every five years that cash would have to be traded in for the new updated cash.  If you come walking in to your bank with a huge wad of cash, questions would be asked and reports made.
   
• Withholding on independent contractors.  It seems these IRS types who were testifying yesterday are more than a little upset because so many independent contractors .... people who do not have taxes withheld by those who employ them ... are not reporting all of their earnings.  so, why not just withhold those taxes before the independent contractor is paid?
   
• Promote the use of debit and credit cards.  Well, we've seen this one coming for some time.  The government would just love for us to move toward a cashless society.  Whenever you use a credit card or a debit card there is a paper trail of your transaction ... a trail that the government can access to determine whether or not you are paying your "fair share."  So the proposal was made yesterday that the government should encourage the use of credit and debit cards.  I suppose that means discouraging the use of cash.

Do you know what a "tax expenditure" is?  You can get a detailed definition at this website, but simply stated a tax expenditure is the money that you are allowed to keep when you take advantage of certain tax breaks like the home mortgage interest deduction.  Senator Coburn pretty much nailed it when he opined that the phrase seems to give the impression that the government is establish its claim to everything you earn, and anything that you are allowed to keep is a tax expenditure.  In other words, the government owns all wealth, but the government will expend some of its resources so that you can receive some of the benefits of your hard work.

Then my turn to testify arrived.  I have no allusions of grandeur here.  I was the last person to testify on the last witness panel for the day.  I was the little man with the bucket and shovel following the show horses in the parade.  By the time they got to me .. by the time I had heard all of this testimony about third party reporting, expanding withholding and tax expenditures, I had thrown away much of my prepared script.  I never did work all that well from prepared scripts in the first place.

I told the committee that I didn't speak governmentese very well ... but I could tell them with certainty that if their goal truly was to simplify our tax system and to make it so transparent that virtually any marginally education person could understand it, they weren't going to get there using phrases like "tax expenditures."  I told them that under our current tax code not only didn't people understand concepts like tax gaps and third-party reporting, most people didn't even have an idea of how much they made in their jobs ("I take home .......") or how much they paid in taxes ("I didn't have to pay any!  I'm getting some back!").

If tax simplification is the goal; if tax transparency is the desired outcome, then there is no better way to arrive there then the FairTax.  You spend $100 on an item.  You get a sales receipt that says the retailer keeps $77 and $23 goes to the federal government.  Who can't understand that?  There are no tax expenditures.  There is no need for withholding from independent contractors.  You don't have to change the currency every five years.  You don't have to chase U.S. dollars abroad.  You don't need to follow credit card gross receipts.  You spend, you're taxed.  You don't, you aren't.  It's a system anyone can understand.

If you would like to read the actual prepared statement I submitted to the committee ... here's your link!

IRAQ WAR CAUSING TERRORISM?

Much has been made of the so-called "National Intelligence Estimate," a report prepared by several intelligence agencies in the federal government.  The New York Times, always on the lookout for opportunities to leak classified information, recently selectively excerpted this secret document.  In it was the explosive statement that the war in Iraq was causing more terrorism.

In response to this, President Bush ordered the report declassified.[pdf]  But there are a few things about this report that the Democrats and the media don't want you to know.  For one, the report is outdated.  It's based on data collected through only February...before two 500-pound bombs sent Abu Musab Al-Zarqawi to his meeting with Allah.  Second, the report is based on a lot of ifs.  It's written by analysts...people who get paid to sit around and think about these things.  If you read what's been released, there's a lot of if this and if that and not many concrete recommendations.

There was, for instance, one "if" in the report that the Democrats and the Times don't seem to want to share with you.  The report said that IF the United States prevails in Iraq, it will discourage Islamic terrorists and reduce the threat they present.  Don't you think that's a pretty important part of this document?

But Democrats are having a field day with this.  Wishing as they do for America's failure in Iraq, they welcome any confirmation of their strategy of surrender.  But their premise is flawed.  What they are essentially saying is that attacking and fighting back against the terrorists only makes them mad and creates more terrorists.  Therefore, goes their reasoning, we simply should not fight back.  We should just let Saddam Hussein go right on his merry way...creating biological and nuclear weapons and selling them to the highest bidder.

And then there's always the issue of what they would do differently.  What is the Democrats' strategy?  Aside from total surrender to Al-Qaeda, they don't have one.  They didn't have one for 8 years during the Clinton Administration and they don't have one now.  The only thing the American Left can offer as a solution to terrorism is appeasement.

THE CURRENT STATE OF POLITICS

This story goes to show you just how pathetic political campaigning has become in 2006.  Virginia Senator George Allen, Republican, is running for re-election.  Now mud-slinging is nothing new in political campaigns...it's as old as the United States is.  But it is increasingly becoming more and more ridiculous.  Case in point, the latest accusation against George Allen.

According to one of his former football teammates at the University of Virginia, Allen used the N word when he was in college.  Allen denies it. says he didn't.  The same teammate also says Allen also once stuffed a severed deer head into a black family's mailbox.  Allen denies it. 

So just when did this alleged bout of insensitivity take place?

Over 30 years ago...in the early 1970's. 

That's right, folks.  A political campaign in 2006 is battling it out over what somebody said or didn't say over three decades ago.  I don't know of anyone that can recite chapter and verse everything they said 30 years ago...much less 3 years ago.  This is one of the biggest "who cares" moments of the 2006 mid-term election campaign.

But back to what Allen is alleged to have said.  The media and the Democrats are making a big deal out of this.  Where was their outrage when the Grand Wizard himself, the Prince of Pork Robert Byrd from West Virginia, used the N word on TV back in 2001?  If George Allen's alleged words of 30 years ago are an issue, what about Byrd's membership in the Klan? 

But ... I almost forgot.  Byrd was and is a Democrat. Different standards.

TONY BLAIR'S FAREWELL TOUR BEGINS

British Prime Minister Tony Blair is going to be retiring from politics in the coming months, after 10 years as Britain's Prime Minister.  He has started making the rounds, giving farewell speeches and starting to close out his time in office.  One of those speeches this week was to a Labour Party conference, Blair's party.  For those of you victimized by a government school education, the Labour Party in Britain is sort of like the Democratic Party here used to be...just not as far to the left.

Blair's speech contained some passages that bear repeating.  Here is a guy whose tenure in office is being cut a bit short.  It's no mystery why:  his participation in the war in Iraq and steadfast support of the Bush Administration are the reasons his popularity has taken a hit.  But you wouldn't know it from his public statements.  Blair said the global war against terrorism won't be won "until we shake ourselves free of the wretched capitulation to the propaganda of the enemy, that somehow we are the ones responsible."  Outstanding.  There's more...Blair also said that by pulling Britain's troops out of Iraq and Afghanistan, "we would be committing a craven act of surrender that will put our future security in the deepest peril."

When the political heat got turned up over Iraq, Blair could have followed other leaders in Europe and taken a walk.  He could have left us holding the bag, but he didn't.  He stood up for what he believed, even if it was politically popular and even if it meant  his tenure as prime minister would be cut short.  Instead, he shunned the Axis Of Weasels and vowed to fight on.

Which is why Tony Blair should go down in history as Britain's greatest wartime prime minister since Churchill.  Islamic terrorists will be happy to see him go.

HEALTH INSURANCE MORE EXPENSIVE?  PERHAPS THAT'S BY DESIGN!

We have reports  that health insurance costs are on the rise ... again. Since 2000 health insurance rates for families have gone up by over 60%.

Now .. here's what you don't hear in the news.  Just why is health insurance getting so expensive?  There are a few good reasons:

First .. mandates.  Year after year state governments across the nation add mandates to health insurance coverage.  This means that the health insurance companies are mandated to provide certain coverage to the insured, no matter what the consumer wants.

A prime example here would be maternity benefits.  Have you ever tried to buy a health insurance policy that doesn't include maternity benefits?  In many states you can't do it.  State law forbids it.

These aren't health insurance policies.  They're medical payment plans.  The purpose of insurance is to cover you for an unexpected expense.  Unexpected.  For those of you who went to government schools, that means an expense that you didn't plan on and didn't know was coming.

When you make the decision to have a baby you know that decision carries certain financial consequences.  You know that you're going to have to pay for pre-natal care plus the cost of delivering the baby.  Now its been quite some time since I've been involved in all this ... but let's say that the initial medical costs are about $10,000.  Why, pray tell, should this be paid by insurance?  Now sure, if you go to the hospital to deliver a baby, and something goes wrong, there may be some additional and unexpected expenses.  Did you hear that word?  Unexpected!  Well there's a valid reason for a payment from your health insurance company!

Why the mandate for maternity coverage?  One word.  Politics.  Politicians earn points with voters by giving them what is essentially a free pass on having a baby.  Remember me?  I'm the one who forced your health insurance company to pay for your last baby!  Aren't you glad you didn't have to pay for that out of your own pocket!  You sure had a lot of things to spend that money on other than paying the full costs of childbirth, didn't you!  Now you be sure to remember me at the polls on election day, you hear?

Then we have this argument.  If you can't afford the costs of childbirth, than you damned sure can't afford to raise a child.  There are various estimates out there for the cost of raising a child to the age of 18, but I don't remember seeing a figure less than about $200,000.  If you can' cough up 5% of that figure to have the child, what real chance do you have of covering the rest?

Are the other mandates?  You bet!  How about a mandate for drug and alcohol rehab.  Many states have enacted just such a mandate.  Do you use drugs?  Are you a drunk?  No?  Then what do you need with this coverage?  Answer:  You don't need this coverage.  Tough.  You're getting it anyway, and you're going to have to pay for it, courtesy of your friendly local politician.

Ditto for other mandates such as psychological treatment and counseling.

As long as we treat what we call health insurance as a medical payment plan, it is going to continue to get more and more expensive.  Start treating it like insurance again .. something to cover unexpected medical costs ... and watch the prices start to come down.

Now let's talk about extraordinary medical advances.  Medical science can do some rather spectacular things,  These spectacular medical procedures are spectacularly expensive.  Just how far are we going to go in making sure that every American is somehow entitled to every single wonder drug and procedure that comes down the pike?  If someone comes up with a new surgical device that can treat ulcers, but only at an extraordinarily expensive cost ... say $75,000 for each treatment ...  does this mean that every single insured person in this country is entitled to the $75,000 ulcer treatment rather than less expensive conventional treatments?  Many would argue that that the insured is entitled to the whole ball of wax ... every single advancement available to them.  Well, if that's the way we want it, we're going to soon find that health insurance is the single most expensive thing that Americans will ever have to buy.

One more thing.  Let's not forget the corrosive aspects of power here.  Politicians thrive on power. It seems that every day of their lives is a constant quest to acquire more and more power. 

One of the quickest and surest ways to acquire power is to work to absolve ordinary citizens of responsibility over various aspects of their lives.  Let's face it, there is little fun in spending the time and money necessary to develop and maintain a comprehensive plan for your own health care and the health care of your family.  When a politicians comes along and offers to take this burdensome task off your shoulders, few people would say "no thank you."

For those who do actually want to accept this responsibility for themselves, politicians will try to make it all but impossible.  Tax breaks are available for businesses who provide health insurance for their employees.  Many of those same tax breaks are not available for the individual who tries to acquire that coverage for himself.  Now why would that be?  Could it possibly be that the political class wants to discourage individuals from accepting responsibility for their own lives?  Could it be that politicians want us to all operate under the assumption that our health care is always someone else's responsibility, but never ours? 

People who abandon responsibility for the important aspects of their own lives must pass that responsibility on to someone or something else.  What better way to condition people to be government dependent.

REDNECK SCRAP BOOK

You might be a redneck if your car sports some of these. More in the Redneck Scrap Book.

READING ASSIGNMENTS

Dick Morris says Bill Clinton's performance in his interview with Chris Wallace shows people the real Bill Clinton.  The former Clinton aide says this is how the former president really is....and Morris goes over Clinton's record on terrorism.

Here's more good news to drive the nail deeper into the coffin of Democrats' dreams of electoral domination on November 7th:  consumer confidence is higher than expected.  Looks like George Bush lowered gas prices just in time.

The Hildabeast is backing her husband following his tirade on Fox News Sunday.  She also took a cheap shot at the Bush Administration over Osama Bin Laden.  The Democrats can crow all they want, but the facts speak for themselves.  Despite attack after attack, The Clinton Administration did nothing about terrorism for 8 years.  Nothing.

Responding to press reports, Iran says it is not negotiating a secret temporary shutdown of its nuclear facilities.  So much for that....although perhaps the media should have realized that since they were in the news, the negotiations weren't secrets anymore.

None other than the Washington Post's David Ignatius is warning Democrats that to just sit back and celebrate the National Intelligence Estimate is a mistake.  People expect them to propose an alternate plan of what to do with Iraq.

The New York Times once again leaked classified information, reporting on the National Intelligence Estimate.  But Jack Kelly says the Times got it wrong...they twisted what the NIE really said for political purposes.  Not exactly a surprise.

The Wall Street Journal offers a guide on how to defeat politically motivated leaks.  Regarding the NIE leak, they wonder if anyone would have even bothered reading it if it weren't top secret.

Michelle Malkin wants to know where all of the good girls have gone.  This is in light of one of her favorite entertainers' descent into, as she says, "skankdom."  So much for having a wholesome image.

Dr. Walter E. Williams has been writing about the true definitions of discrimination and prejudice in his recent columns.  Today he describes the differences between the two terms.  Not a column for the politically correct among us.

John Stossel takes on the myth that big business wants big government to stay out of its affairs.  Stossel actually says the opposite is true...big business loves big government.  He says there has never been a time in history when big business didn't get favors from the government.

Kate Moss caught white-nosed. Hey, maybe she was caught in a sand-storm or something...

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