First of all, thanks to the hundreds of folks who emailed congratulations for MNB’s 16th birthday. I’m both energized and humbled by your support.




Got the following email from an MNB reader:

Kevin, you served up your views on college debt as part of the NRF study.   Honestly, I thought the commentary was more newsworthy than the NRF report. (I’m sure you carefully guard topics that can become more political but I personally feel your feedback was more eye-opening than the NRF report.)
 
I support your view on education and how important it is to the very high US standard of living we need to maintain.  
 
Taxes ... government simply cannot keep up with the free hand of the market economy. Here’s a couple of ideas I’ve been tossing about (without the benefit of the CBO to do a cost exercise)….
 
1. I think we should discontinue all business income taxes.  0%  Two parts.  First, the internet now allows corporations to move money beyond tax borders.  We have a 35% statutory rate but an effective 18% collections and going South fast.  Too easy to hide money in the digital world.  Total US corporate tax revenue is only $355B.  Second, 0% income taxes will attract companies to the US; their families and jobs.   0% = more domestic jobs. 
 
2. We should have a 10% consumption tax to replace the corporate taxes at 0%.   10% on all internet, domestic, AND imported products.  That will make domestic goods very competitive with imports.  Collect + $1,500B revenue. Collect it at retail similar to state sales taxes.  This isn’t a new idea; many countries already use VAT (value added tax) now.  The fear about VAT is that this % will continue to increase when Gov’t needs money but some countries haven’t increased their VAT in awhile (S Africa, for example).
 
3. Use the over collections to pay down the $20T debt. And, pay for basic college courses taught at any state institution, including junior colleges.  This will help minimize the college debt issue if everyone can get the first two years of basic courses paid.
 
4. Simplify the tax code with fewer tax breaks funded by political campaign contributions.  Make the code fair, transparent, and progressive ... 10-20-30%.  The government needs 20% of the economy to provide the services we want ... that's 20% of $18t or $3.6T. 
 
5. Few taxpayers appreciated that most of the government tax revenue is from payroll taxes ... $1.8T of $3T.  It comes in and goes back out immediately.   
 
Or, we can let politicians think they are leaders by talking about harassment claims, uranium deals, border-walls, and gun legislation that will never happen but disrupts our Congress from the work of “leading”.


I’m not smart enough to be able to hold my own in a tax discussion; I simply don’t know enough about the subject to be able to know the best way to be equitable and growth-oriented.

I do think I’m capable of understanding and pointing out when proposals seem to be at odds with priorities that I think are important … and you’re right about me using a relatively benign NRF study as a catapult to allow me to make a point that I wanted to make.

One other thing, though. I think a continued discussion of harassment and gun legislation is not just important, but critical. Mistreating women (and the powerless in general) may be a time honored tradition among some white men in power, but it is an approach at odds with what should be our nation’s basic values. And having an honest debate about how to square what is seen as an essential American right with growing gun violence in this country strikes me as what democracy is all about.

Frankly, I don’t want to vote for anyone who can’t handle all these issues at the same time.

On Friday, I pointed out that trade associations were supporting the tax reform bill, but suggested that if some analysts are correct that tax breaks will go mostly to corporations and may not end up with more money in the pocket of the middle class, it may not mean more sales for stores.

MNB reader Tom Murphy agreed:

This is really sad…How can these associations support tax reform that will put money in their big member-company coffers, while taking it out of the hands of their employees, and in many cases, their mainline customers.  I am with you...after having worked with retailers for nearly 25 years, I can’t see any of these companies passing much if any on to employees, and only “symbolic” amounts to customers.  Any tax cut benefits will go to share buy-backs and debt reduction…in other words, Wall Street and the executives.