Tag Archives: Democracy

Approval Voting for the President

Problem: Presidential politics is broken. Elections are negative and third party candidates have no chance. Candidates know that they can gain advantage by slandering their opponent. Because we can only vote for one candidate, it’s not enough to show your qualifications; you also have to destroy the opponents.

Solution: Approval Voting! Allow voters to vote for as many candidates as we want.

Benefits: Every candidate will try to win your vote. Campaigns would be positive and collaborative, rather than negative and combative. You can vote for several candidates if you think they would each be a good President. Voting for 3rd party candidates would no longer be a wasted vote. These candidates would finally have a chance, and would be able to run without fear of “stealing” votes from other candidates. Finally, winners of Presidential elections would have much more votes, giving the country far less partisanship, and a greater feeling of approval.

This would change the nature of Presidential politics — for the far better.

View and comment at SinceSlicedBread.

Ethics vs. Morals

Why are moral values the primary political hot-topics? Why are ethics ignored? Business, political, and social ethics are the foundations of law, politics, and society. Moral values, on the other hand, are personal. Politicians should be living up to ethical standards and raising the standards for ethics and transparency.

Is there a growing rift between the US and Russia?

Putin has denounced the idea of elections in Iraq so long as the US is an occupying force.

Winning the Peace, Continued

It is frustrating to watch the coalition fumble the war in Iraq. Let’s be as clear as possible about our goal: democracy of the Iraqi people, by the Iraqi people, and for the Iraqi people.

We should have let them know our intentions before we invaded. We should have encouraged a civil overthrow of Saddam before we invaded. We should have made our case to the Iraqi people even if that meant dropping leaflets before we dropped bombs. The communication would have been simple:

“Countries throughout the world are saddened to watch Saddam Hussein murdering and intimidating the Iraqi people. A new government must come to power or these countries will form a coalition to invade Iraq and assist in the election of a new government. Saddam Hussein must step down from power and an election must be held for new local and national leaders. Otherwise the coalition will invade and organize the election. Elections must be held on or before January 1, 2004. The countries in the coalition look forward to a time when the Iraqi people can be free from tyranny.”

Of course whatever communication we decided to use, it should have been translated into all the appropriate languages.

If the deadline comes and passes, the Iraqi people will know our purpose. We should strike only at Saddam. We should continue until he is captured or killed. We should openly bribe and coerce our way to him before we attempt to kill him. Once he is killed or captured, we should have announced the election immediately. (See Winning the Peace).

Without this communication, the Iraqi people see only the invasion of a foreign power. They may not understand that our purpose is their purpose, but instead they see us as the enemy. This is a top-level strategic mistake.

By approaching Iraq as a war instead of as a revolution, we have become one side of that war. In a revolution, it is the people who fight for change, and the coalition would simply be there to support the people.

Taxes and Concentration of Wealth

The concentration of wealth plays a role in economic growth and employment, crime rates, and just about every aspect of American society. The primary tools government uses to manipulate the concentration of wealth are tax and healthcare policies. In this article, we focus on how recent tax policy is reshaping the concentration of wealth.

Policies that distribute wealth and power more broadly are sometimes called “socialist” by those who argue against them. Similarly, policies that concentrate wealth and power too much are sometimes called “oppressive” or “fascist”. Both of these names are misleading. In a capitalist democracy, a wide range of policy decisions can set the stage for incentives and fair business; we’re still working to find the best balance.

Capital gains income tax:

Under President Bush’s tax cuts, investors are now paying 15% tax on income from capital gains. Meanwhile, income from work is taxed about twice as much, depending on your marginal rate. The tax code is effectively encouraging income from capital gains by giving back half the tax on that type of income. It’s not clear to me that the government should be in the business of encouraging one type of income over another, but if we do then we should be encouraging income from work. Investors may argue that they have already earned this money and paid taxes on it so it should not be taxed again. This is true; remember that you only pay tax on the new income. The original amount you invested is not considered income and is not taxed again.

Estate taxes:

Estate taxes were created along with child labor laws, voting rights for women, and the establishment of an income tax during the Progressive Era (1900-1918). President Bush is eliminating the estate tax, and has proposed to make this tax cut permanent in the coming term. The question of whether we should we maintain estate taxes or eliminate them is a subjective question. Rather than make this point myself, let me defer to the words of President Franklin Roosevelt: “Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others. Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.” President Bush’s agenda for estate taxes is to reduce the estate tax over time to nothing, and in the next 4 years, his agenda is to make this permanent. If this happens, families of vast wealth will effectively be an elite class, removed from the rest of Americans by the virtue of birthright.

Dividend income tax:

Bush’s economic agenda for the next 4 years also includes eliminating the tax on dividend income (http://www.gop.com/GOPAgenda/AgendaPage.aspx?id=2). If this is passed, those who receive dividend payments will not pay any taxes on that income, giving them an after-tax raise of more than 50% (35% tax leaves 65%. Going from 65 to 100 is a 53.8% gain). That personal income will no-longer be contributing to the government revenues, and the shortfall will accumulate against us all in the form of budget deficit. If stopping the double-taxation of dividends is the goal, the correct way to deal with it would be to make dividend payments a deductible expense just like any other cost of doing business.

These recent tax cuts have been very effective in getting money back into the hands of Americans, but have put us into growing debt. The budget deficit is important because the national debt must someday be paid down, with interest. This is one of the most important factors that determines the value of the US dollar and international confidence in American investments. With extensive history and other nations as examples, we clearly see that as the debt gets bigger, we will experience inflation, not be able to buy as many foreign goods, and see less international interest in our stock markets. The U.S. budget deficit in 2004 will hit a record $445 billion, according to the White House. Not only would this be a record deficit, but also an unprecedented fall from record surplus.

Federal Budget Surplus or Deficit

Data source: http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0

Instead, if income from all sources is simply taxed as income, then tax policy will be much more fair and government revenues will be higher. On this point, the Democratic agenda to roll back such specific portions of the recent tax cuts seems right. The timing, however, is sensitive: increasing taxes during economic recession can make problems worse.

In any event, the Federal Reserve (not tax policy) is the primary mechanism for managing economic recession. If the federal government uses changes in the tax code to manipulate the economic cycles, then it is acting as a backseat driver to the Federal Reserve. In addition to the complication this adds for the FED in determining the funds rate, it also makes it much harder for citizens and businesses to plan and prepare taxes.

The concentration of wealth threatens our nation. The poverty rate was 12.5% of all Americans in 2003. The numbers are even worse for children: 17.6% of Americans under the age of 18 are living in poverty (http://www.census.gov/hhes/income/income03/prs04asc.html). I hope you will agree that these numbers are too big. These Americans often disappear in our society and are not very well represented in politics: they may not apply for jobs or vote, they often do not have health insurance, they often do not pay taxes on the money they do earn; they hide from the system because the system demands taxes that they can’t afford to pay. Tax policy is exacerbating this problem and should be made fair in the ways I described above. Once the downward spiral of joblessness and poverty can be broken, the upward spiral of employment and fulfillment can begin. Increasing the workforce and reducing structural poverty is clearly in the interest of America.