Ron Popeil – “Set It and Forget It”
Ron Popeil - "Set It and Forget It"
Ron Popeil – “Set It and Forget It”

Conservatism in the original sense of the word is characterized by caution and skepticism about new ideas and policies. This sort of conservatism is necessary at all levels of government, particularly local governments. These days, local governments tend to attract two kinds of people. The first have creative ideas that aren’t always practical. The second are self-aggrandizing politicos who dream of big projects to secure their legacy.

Left unchecked, these people do silly and sometimes harmful things. In a small town I grew up in, the city had the brilliant idea of spending $250,000 painting all the downtown crosswalks red and green. The red and green looks ugly and faded last time I was in town and to the shock of the city council, downtown businesses haven’t been saved. In Boise, conservative citizens have so far stood as a force against the grandiose scheme of our mayor to introduce a trolley as it would snarl Boise traffic.

Every city needs a conservative and hopefully two on its city council. I know a City Council has a shot of making good decisions when I see a couple cranky old people sitting behind their desks demanding audits, calling for impact studies, and constantly asking how we’re going to pay for all this. The cities where self-aggrandizing politicos’ legacy dreams were never challenged are those in the most trouble today.

Conservatism’s greatest strength can also be its greatest weakness. When things are good enough, leaving well enough alone is a good policy. When things are a mess, you need to find some way to straighten them out. You need a significant solution, and the natural skepticism of conservatives often makes this impossible.

Conservatives demand perfection in proposed solutions and protection against any abuse or problem in the future. It reminds me of Ron Popeil, the famous infomercial star. In one he did for the Showtime Rotisserie, Mr. Popeil boasted that the Rotisserie didn’t require constant attention. You could, “Set it and forget it.” For many conservatives, that’s the goal when it comes to major government reform.  It should be a plan with no downsides that adheres strictly to conservative principles and leaves no door open through which bad policy can come.

For example, some conservatives oppose the passage of a Balanced Budget Amendment unless it also contains a tax limitation amendment. The fear is, without budget deficits, instead of cutting spending, politicians will raise taxes. So we can’t stop out-of-control deficits without also being assured there would never be another tax increase. This is a poison pill that makes actual passage of the amendment impossible. People who agree we need a Balanced Budget Amendment may not agree that taxes should never be raised.

Tax Reform is another key issue. Many conservatives and libertarians complain about government violations of privacy, but many seem to overlook the fact, at this time of year, every citizen is required to disclose to the government every penny of income they earned in the previous year. The current tax code is a labyrinth of confusing laws that even the IRS isn’t quite sure about, and it costs our economy $350 billion a year in compliance cost. In addition, the cost of our taxes are embedded in the products we sell, but other countries aren’t, so it hurts American exports.

Yet conservatives can’t agree on a plan to bring about major reform. In addition to “Ron Popeil” conservatives, many corporations and businessmen within the GOP don’t want serious tax reform at all. They’ve figured out how to game the system under the current law. Much of this is in the real estate industry. The Home Mortgage Interest Deduction allows taxpayers who itemize to deduct their home mortgage interest from their income. The vast majority of homeowners don’t take advantage because they don’t earn enough to save on their taxes by itemizing. However, for those who do itemize, it means they can buy a more expensive house than they could otherwise afford, much to the benefit of real estate brokers and the construction industry.

Beyond this, there are a host of ideas of how to fix the tax code: The Flat Tax, the FAIR Tax, or flatter taxes. A host of opponents within the conservative movement are ready to shoot down tax proposals  Of the Flat Tax, columnist Mike Adams argues that a Flat Tax wouldn’t be guaranteed to remain flat because over the years the tax code has been changed twice as often as the average citizen changes their underwear.

During the 2012 campaign, Herman Cain proposed a 9-9-9 tax reform that would depend on a 9% tax on corporate and personal income and a 9% sales tax. The plan was attacked because it might be 10-10-10 or 18-18-18 some day. Rick Santorum’s plan to give us a two-rate personal income tax and a lower corporate income tax with no corporate income tax for American manufacturing was attacked for helping our struggling manufacturing sector over all other sectors of the economy.

The FAIR Tax would replace all payroll taxes, capital gains taxes, gift taxes, estate taxes, and corporate income taxes with a single retail sales tax of 23% while providing a prebate to every American family equal to the tax that people would pay up to the poverty level in spending to ensure Americans are able to purchase the essentials of living. The tax would end the IRS, and the federal regulation through the tax code. Those Americans who sold items would have to collect the tax, but for the vast majority of citizens, the government would be out of their lives forever.  Pastors and  community groups would not be hassled by the organization anymore.

It’s nit picked by this group or that because this little special interest or that one will not do as well under the Fair Tax. One fear constantly expressed by its opponents is we could end up with an income tax and a sales tax. That could happen even without passage of the Fair Tax. Passing a Value Added Tax in addition to the Income Tax was on the table in the early days of the Clinton and Obama Administrations. So Fair Tax opponents will consider getting the IRS out of our financial lives only after 2/3 of Congress and 38 states vote to repeal the Sixteenth Amendment, which allows the income tax. Until then, citizens must continue surrendering their financial privacy to the government every year.

The prebate idea is opposed by many conservatives as well. I spoke to a state representative who feared it’d become an entitlement by sending people money when they hadn’t paid taxes or might spend less than their prebate amount in purchasing living essentials. I pointed out we already do something similar with the Earned Income Tax Credit and asked how this things made things worse and he didn’t have an answer. The problem wasn’t that the Fair Tax was as bad or worse than what we have, it’s that it wasn’t perfect. The search for perfection continues while our current tax code is a lead weight around the legs of our economy.

If tomorrow a bill passed into law implementing the Flat Tax, the Fair Tax, 9-9-9, or Mr. Santorum’s Flatter Tax, our economy would improve and we would see real growth. What it wouldn’t be is perfect. We’d have no assurances someone wouldn’t change the tax law. Yes, the rates could go up. Yes, we could end up with an income tax and a sales tax. It wouldn’t be a flawless victory guaranteed to be maintained for all time.

Raising taxes is a lot harder than many conservative tax reform opponents make out. Indeed, even with a Democratic Congress, President Obama avoided it, and he ran on a pledge not to raise taxes on individuals earning less than $250,000 per year. He broke this only with Obamacare and an increase in cigarette taxes. Reinstiuting the IRS would be required to collect income taxes after the passage of the Fair Tax. Bringing back the IRS a few years after the American people believed it safely dead would be a politically costly move. Still, no matter how unlikely, these worst case scenarios could happen.

That’s the problem for Ron Popeil conservatives. The basic working of politics doesn’t set up eternal conservative victories. Eternal vigilance is still the price of liberty.

Conservatives of all stripes revere the Constitution, but the Constitution itself wasn’t an achievement of perfection. Benjamin Franklin said at the conclusion of the Convention, “I confess that there are several parts of this constitution which I do not at present approve, but I am not sure that I will never approve of them…I agree to this Constitution with all its faults, if they are such because I believe a general government necessary for us…The opinions I have had of its errors, I sacrifice to the public good.”

Conservatives must make a choice. If we want to be mere speed bumps on the road to national ruin, then we should stick with the Ron Popeil approach of demanding perfection and victory forever before we’ll support reforms. If we want a shot at saving American liberty, then I’d suggest Ben Franklin and his imperfect constitution would be a better role model than Mr. Popeil and his amazing rotisserie.

6 comments
  1. If you go thru the Constitution and highlight all the powers delegated to Congress and the President, you will get a complete list of the objects on which Congress is authorized to spend money. THAT is how our Constitution controls spending. The enumerated powers limit spending.

    We got the huge debt b/c of Congress’ unconstitutional spending – Congress spends money on whatever they or the President want.

    All versions of the BBA legalize the present system of spending – make it constitutional – and change the constitutional standard for spending FROM whether the object of spending is an enumerated power TO whatever is in the budget – unless the total spending exceeds the spending limit – unless, of course, they vote to waive the spending limit.

    See? They are a hoax.

    And there is an “unintended” [unintended to those who don’t see] result of all version of the BBA: They transform our Constitution FROM one of enumerated powers only TO one of general and unlimited powers [b/c Congress would now be allowed to spend money on WHATEVER they or the President want.]

    1. I understand your concern. If Congress limited its spending to Article 1, Section 8, things would be a lot better, but at the same time, that ship has sailed. We’ve had a bloodless coup against the Constitution and after 80 years, it’s the new Status Quo.

      Strict adherence to Article 1, Section 8 of the Constitution would need no Social Security, no Medicare, no Farm Subsidies, no Federal Highways. Do you thing Congress would that go for that? I don’t.

      The only other alternative to achieve your end would be a federal court ruling which is not going to happen. Even if you could find a sympathetic judiciary, they would be unlikely to tear apart society as we know it. Imagine if tomorrow the government ruled Medicaid and Social Security unconstitutional and stopped paying beneficiaries. Most judges would recognize that they’d do more immediate harm by correcting the illegal abuses of the last eight decades than they would leaving them in place.

      The only way you’re going to get the public to go along with that is a massive educational effort which will take decades. In the meantime, the BBA might stop us from going bankrupt which would make this whole discussion moot.

      In addition, the BBA doesn’t in plain text say that the Government can spend on things outside of Article 1, Section 8. The limit on how much of GDP government can spend and whether they can have a deficit doesn’t affect what they are legally allowed to spend on. Not that Congress will pay any attention to Article 1, Section 8 unfortunately.

  2. Mr. Graham, your search for tax reform perfection may be found in the 2-4-8 Tax Plan described at TaxNetWealth.com. I am a conservative and invite you to identify any flaw in the plan. In a nutshell:

    Consider a flat income tax rate of 26% with no tax expenditures (except for charity). Next imagine a taxpayer option of paying an 8% income tax rate and 2% tax on family net wealth (excluding $500,000 tax free savings) with no payroll, capital gains, gift or estate taxes. More than 90% of taxpayers would choose to pay a wealth tax in order to keep 18% more of their income. The very wealthy should not complain about the reasonable 26% income tax rate but the estate tax would be adjusted to recoup any unrealized capital gains.

    To complete and balance business tax reform there would be a 4% VAT, no payroll taxes and a flat 8% C corporation tax.

    1. My purpose isn’t to come up with arguments against reforms. Though, as proposed, I would be concerned with the compliance costs of this particular plan. The big challenge is calculating net worth. For example, I have a baseball card collection. Don’t really know what it’s worth. Haven’t calculated but there are several thousand cards. Would I need to get them appraised? Would I need to get them appraised every year because that value changes? Same thing is true with cars or houses. People are going to have to go get the Blue Book on their cars every year and will we have IRS audits that look if people misgraded their cars? What about books. What about digital collections of books and music. Are those calculated? We’re going from government being entitled to know my income and where all my income comes from to government being entitled to know everything I own.

      In addition, it would be very difficult to maintain two tax systems, and there’s also a similar problem with the idea of Romneycare. Can people changed from going with the 26% Flat Tax to the 8% Flat with 2% Net Wealth and vice versa? Because let’s say I got billions and I don’t want to pay 2% of net worth so I pay 26% of my income, but the I find out I’m going to die at the start of year and switch my taxes to do 2% of my net worth. Do I get out of paying my estate taxes? If you’re going to say no, what if someone is very wealthy and they get wiped out like Bernie Madoff’s clients. You going to keep making them pay a 26% income tax even though its stifling them because you made them pay it when they were wealthier?

      And what about people who don’t have very much money but own a piece of rural property that shoots up in value, they don’t make much money and they can’t afford the 26% income tax along with all their other taxes and they also can’t afford to pay 2% of their net worth because it includes a property that used to be worth about $50,000 but now that demands up, it’s worth about half a million, so they’re cash poor and you’re going to force them to sell their homes.

      Now, I’m not doing this to poo poo the tax policy in question, I’m doing it to illustrate that there’s no perfect plan. There are going to be upsides and downsides, no matter which plan you propose. What we need is not a perfect plan, but the best plan we can come up with, and sure this can be part of the conversation, but it’s a perfect plan. No plan is.

  3. Adam, I ‘m glad you brought up President Obama’s broken promise: he ran on a pledge not to raise taxes on individuals earning less than $250,000 per year, but here we are with Obamacare paying what we can’t afford. There is a solution, and most exciting for me it is local- we can decide in our individual states and not have bureaucrats miles away deciding for us. Health Care Compact even allows the states that are part of it to design completely different plans based on their own states needs.

    1. Thanks, I think it’s worthy noting that Obama did the tax increase in a very stealthy way and wouldn’t call it such which shows how difficult raising taxes really is.

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