Blue Collar Conservatives: Recommitting to an America That Works (20 page)

Military spending, moreover, is generally more productive than other government spending. Yes, the Pentagon can waste money with the best of them (Senator Tom Coburn of Oklahoma has called it the “Department of Everything” and identified nearly $70 billion that could be cut over ten years without affecting national security).
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But defense spending supports manufacturing jobs in shipbuilding and aerospace, drives high-tech research and development, and most important, of course, defends our country and our national interests.

President Obama’s hostility to military culture is no secret. Not only does he seek to undermine that culture by imposing
a politically correct social agenda on our forces, but he is making the fiscal crisis for which he bears so much responsibility an excuse to eviscerate the military, proposing massive cuts to manpower and weapons systems.
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This is cutting meat, not fat. No one should be fooled by this opportunistic show of fiscal discipline.

The primary way that the government takes bread from the mouth of labor is taxation, and the federal tax system is a disgrace. It is confusing, conflicting, and confounding, and lately the Obama White House has wielded it as a weapon against its political opponents. Thanks to the dramatic growth and complexity of our tax system, the Internal Revenue Service is a uniquely effective tool to strike terror into political opponents. Unlike a legal probe by the Justice Department or another federal agency, an IRS accusation imposes on its target the presumption of guilt. A system that encourages such abuse should be condemned and demolished. A complete overhaul would allow us to reassess what types of activities the federal government should tax and how to best do it.

Let’s look at the issue of what we should be taxing. Work is the key to success. It is so good for us that you might expect the government to encourage it. Well it doesn’t. If we want people to work, we should stop taxing their wages. Let’s develop a tax system where you get to keep everything you have worked for.

Rather than taxing working or giving, let’s tax spending. Most of the world does just that, raising government revenues primarily from a sales or value-added tax. The main argument against a consumption tax is that it is harder on lower-income people. For example, a man with a wife and two kids earning $35,000 last year is likely to have spent all of it to provide for his family, whereas a family of four whose income is a million dollars has plenty to spare. So the lower-income family is paying a higher percentage of its income in taxes than the rich. That would be a reversal of the current progressive system of income tax, and it’s a legitimate concern. One proposal for ameliorating the regressive nature of a consumption tax is called Fair Tax. I haven’t endorsed it, but there is much to commend it as a starting point for the discussion of incentivizing working, saving, and giving while discouraging overconsumption.
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Enacting this kind of fundamental change to our tax system will require a presidential campaign and a national debate. So let’s set the long-term overhaul aside and consider how we could mend some of the worst flaws in the current system.

A tax code can encourage certain behavior and punish other behavior. In addition to punishing work, ours punishes marriage. Since marriage is a critical factor in avoiding poverty, the tax code should encourage it. Removing the “marriage penalty” from the code is a good start, but we ought to go further and establish more tax benefits for married couples.

The most important act of stewardship for our country is raising the next generation of Americans. That next generation is, literally, the future of America. Low birthrates bespeak a lack of confidence and diminish our personal stake in the future. As we’ve seen in Europe, collapsing birthrates also make a welfare state unsustainable, as you inevitably end up with too few workers trying to support too many retirees. Karen and I are blessed with the responsibility of raising seven children. We have had no greater joy in our lives, but in the world today, it is also our greatest challenge. Let’s set aside the cultural factors that I spoke of earlier and what they do to undermine a parent’s ability to raise good, virtuous, faith-filled children. Let’s look at how families with children are treated by the tax code.

There are a few provisions that lighten the tax burden on families with children, primarily the personal exemption—$3,900 in 2013 for you, your spouse, and all of your dependent children. That exemption reduces the amount of income subject to taxation. If this deduction had kept pace with inflation since 1969, it would be more than $6,000.

At the apex of the baby boom, the average American woman bore 3.5 children (and all those kids are now the ones retiring and receiving benefits). A typical family of four paid a total of 2 percent of its income to the federal government in taxes. Today the birthrate is less than 1.9 children per woman, and that same middle-income family of four (earning
$51,100) pays 9 percent of its income to the federal government. Even the refund that a family of four can obtain because of deductions is not enough to offset taxes paid to Social Security and Medicare. If you consider all of the state and local taxes that didn’t exist in 1955, there is no question we are asking parents to do more with less in an environment in which it is much harder to raise children.

We should double the tax credits for children from $3,000 to $6,000 per child so that young couples can afford to raise a family.
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That would put middle-income families back on a par, in terms of federal taxes, with their grandparents when they were having all of those kids in the 1950s.
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Reducing taxes on families is the best investment government can make in our future. And to come full circle, it is the best investment we can make to ensure that programs like Social Security and Medicare live up to their promise to our nation’s elderly.

The economic policies of the Left not only are harming the poor, the low-skilled worker, and the entrepreneur, but as we all know they are hitting our pocketbook every day through the insidious creep of rising prices. The administration tells us that inflation is under control, but try convincing the mom who has seen chicken prices rise 16 percent, ground beef 18 percent, and bacon (my favorite) 22 percent. In survey after survey, Americans say they feel like they are falling behind, as
their wages have stagnated and prices continue to rise on everything from food and energy to medical care and education. The principle culprit here is our central bank, the Federal Reserve. The activities of the Fed determine the cost of borrowing money by establishing interest rates for things like mortgages and car loans. Over the past few years, the Fed has been aggressively purchasing government debt, and in doing so driving interest rates down to nothing.

This is what’s called “quantitative easing,” and it has driven stock prices to all-time highs, to the delight of Wall Street. But putting all this additional money into circulation is driving up prices for Main Street. Many of the Wall Street economists who criticized my ideas about leveling the playing field for manufacturers so that low-skilled workers could find quality, family-sustaining jobs are cheering the intervention of the Federal Reserve to keep the good times rolling in the financial markets at the expense of those very workers.

When the economy begins to pick up steam, inflation will be an even greater problem for working families. I have serious doubts that the Fed will be able to unwind the problem it has created. That means even more price inflation in the future eroding purchasing power and pushing more and more people into the red.

The Harrisons are about fifteen years away from beginning to collect Social Security benefits—in about 2028, just about
the time, if nothing is done, that the program will be able to pay only three-quarters of benefits due. No politician is talking about it, so the Harrisons are not aware of what is in store for them. They already feel as if they missed out on their town’s economic good ol’ days. Just wait till they find out what awaits them in retirement.

They are doing their part to fix the problem from the ground up, but they are relying on their leaders to attend to the top-down part.

CHAPTER ELEVEN

BELIEVING IN AMERICA’S FUTURE

J
ames and Susan Harrison are optimistic people by nature. Though the last several years have been tough, they are grateful for the hand life has dealt them. They were born into strong, loving, supportive families in a safe town filled with decent, hardworking, community-minded people. While they are struggling financially, they still have their health, their faith, and two healthy, active sons. Not bad.

There are even signs that their financial situation is taking a turn for the better thanks to the Utica Shale they’re sitting on top of. James has an interview for a job with a business that
just came to the area to supply parts to the energy companies drilling for oil in eastern Ohio and western Pennsylvania. It pays well and has benefits. Susan has been spending more time helping her niece, who is single with a baby. Her niece is doing well in the nursing program she enrolled in, but it’s a fragile situation and she needs lots of support. The boys are doing well, and it won’t be long before they will have to think hard about what will happen after high school.

Like most Americans, they haven’t paid a lot of attention to issues like the size of our national debt, rising food prices, or the problems with Medicare and Social Security. America has faced tougher challenges and has always come out fine. But the divisiveness in Washington is so unsettling that they no longer trust the president and Congress to do
anything
, much less the right thing.

America will bounce back, but we have our work cut out for us. For too many people, the American Dream seems unattainable. They’ve lost faith in the promise of hard and honest work. Others are pursuing a cheap counterfeit of the American Dream—a materialistic fantasy of riches, fame, and sex—that they absorb from movies and television and a hundred other channels of popular culture. We need leaders who will remind us what the real American Dream is—family, faith, freedom, opportunity, and service—not incite us to be envious of those who have achieved it. Above all, it’s up to each
American family to adhere to the old adage, “Work as if everything depended on you, and pray as if everything depended on God.”