What Passes for Bold

When you hear cries from voters for their politicians to take bold steps to meet challenges, I’m never sure what that means, and I find myself almost always being disappointed. Here's my take. I'll frame it in the context of what is and isn’t bold from one man’s perspective.

On corporate taxes…

Bold is the wholesale elimination of the corporate tax. “Eliminate the tax, eliminate the loopholes” has the result of eliminating 90 percent of the tax distortions inherent in the system. While you’re at it, pass an amendment that would never allow one industry to get tax preference. Not bold is nibbling around the edges, talking about tax holidays to repatriate money held overseas.

On trade…

Bold would be the elimination of all tariffs on products purchased by companies with their primary headquarters in the U.S. Not bold is going at it a country at a time, setting up free trade agreements that get so watered down and bureaucratic that they probably cost more to administer than they benefit.

On Social Security and Medicare…

Bold would be the elimination of Medicare and Social Security for anyone who has earned in excess of $250,000 a year (or $400,000 per family), on average, during their lives. And count all income sources not just wages. At the same time make the age at which people are eligible for either program, the average life expectancy for their respective gender. Not bold is leaving entitlements off the table entirely or simply raising the retirement age a couple of years or increasing the taxable cap by a few bucks.

On campaign finance reform…

Bold is the complete elimination of a candidate’s ability to solicit or accept money from individuals or corporations in favor of frugally and publicly financed short campaign cycles. Interest groups could still do what they want. The Supreme Court has laid down that law, but candidates would be on a tight leash. Not bold is the regime we suffer with now.

On income taxes…

Even bolder would be the total elimination of all federal income, interest and capital gains taxes in favor of a progressive individual consumption tax (no VAT). You want good roads and bridges? The gas tax is higher. You want to buy a $120,000 gas-guzzler, you pay a 10% tax while someone buying a $20,000 hybrid pays a much lower tax. Not bold is complaining that the rich don’t pay their share or saying all consumption taxes are regressive. There are plenty of good ways to make a consumption tax non-regressive.

I’m not saying all these bold steps are the best ones or even that all of them would be without unintended consequences, but at least we’d be trying.