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The never ending presidential campaign will finally get down to business next month as the first primaries and caucuses are held. In a few months we should know who the two major parties will present to us as their presidential candidates.
Right now, it's impossible to even guess who they will be. The last I heard, Barak Obama has pulled ahead of Hillary Clinton in polls in Iowa, which holds its caucus the first week in January. Her once commanding lead over Obama in South Carolina, an early primary state, has dwindled to the point where they are now virtually neck and neck. On the Republican side, Rudy Giuliani has also lost ground to rivals.
One thing, however, is sure. The rhetoric we can expect on economic issues is going to amount to a baloney sandwich. We, the voters, are going to be in the middle with the baloney coming from both the left and the right.
We'll get baloney from people from the right that are convinced we live in a nanny state that destroys jobs. The United States is not (at least not yet) a nanny state. If you want to find true nanny states, you have to go Europe. Countries like Sweden are true nanny states. Our welfare system, after federal and state reforms in the '90s, seems to be reasonable.
The biggest slab of baloney that will come from the right is the so called "fair tax." Mike Hukabee is currently the only candidate pushing this and the Wall Street Journal ran an editorial in its Dec. 5 edition explaining why the "fair tax" is a bad idea.
The "fair tax" calls for scrapping the entire federal tax code, including payroll taxes, the income tax, corporate taxes and the Social Security tax with a 23 percent federal sales tax on nearly all goods and services. This would include house sales.
The Journal points out that the 23 percent figure would be inadequate to finance the federal government. The actual tax would have to be 30 percent. There is also the danger, knowing Congress' egregious spending proclivities, that we would end up having a national sales tax added <*I>on top of<*P> our existing federal taxes. Then, we could be just like Europe with its value added taxes.
The "fair tax" wouldn't eliminate the IRS, either. There would still have to be a federal agency that would enforce the tax and administer the "fair tax's" complex system of rebates intended to keep it from crushing the working poor.
Meanwhile the middle class, especially the lower middle class, will take a heavy hit. Virtually everything you buy would cost 30 percent more, not including state sales tax and local meals taxes.
Young families trying to buy their first house would take a heavy hit from the "fair tax." That $100,000 house would end up costing $130,000. Instead of getting a tax break on their mortgage, they would be taking out a mortgage to pay their taxes.
Leo Linbeck, the Texas millionaire promoting the "fair tax," would be among the small percentage of those who would benefit from this replacement for the current federal tax code. The vast majority of us would pay more.
What we actually need are realistic, and believable, proposals to reduce federal spending.
The left is going to tell us how new government programs are going to save us all. The main slab of baloney coming from their deli involves health care. The worst offenders among "Democratic" candidates are HillaryCare 2.0 and John "The Breck Girl" Edwards' proposals for a massive government health care programs along with oppressive, and unworkable, mandates.
The best approaches to health care involve free market proposals. Allowing people, who pay for medical insurance, to deduct it from their income taxes would help address the affordability issue. It would also help if people could buy health insurance polices on the open market instead of being limited to those authorized by their state. In some states, mandated coverage significantly boosts the cost of policies. People should be free to buy the coverage they actually need.