Dan Kennedy: Is it just Lip Service?
Some amusing commentary from Dan Kennedy and the inability of our politicians to resolve some of our problems.
I'm sympathetic to some of Dan's thoughts. At the same time, Dan shows why he's a businessman, not a politician. If you're a businessman, you can go after a certain segment of customers and not worry about pleasing all segments. Politicians don't have that luxury.
For example, Dan favors a flat tax. If you were to ask whether Dan thinks pay plans with bonus or commission aspects were better or worse than straight salary, then Dan would likely tell you he thinks bonus and commission is better for the incentive it offers. For government, taxation is their version of bonus or commission. Government uses behavior to encourage behavior you want and discourage behavior they don't want. If you go flat tax, then you lose that capability.
At the same time, Dan is illustrating why so many struggle. Everyone has a story they tell themselves about why they're not doing well. So long as they allow themselves to hide behind that story, they have an excuse. Take the story away and they no longer have an excuse.
Here's a link to Dan's writing. Check out his other products while you're there.
http://gkicwebstore.com/index.php?option=com_content&task=view&Itemid=485&utm_nooverride=1&id=1035
I'm sympathetic to some of Dan's thoughts. At the same time, Dan shows why he's a businessman, not a politician. If you're a businessman, you can go after a certain segment of customers and not worry about pleasing all segments. Politicians don't have that luxury.
For example, Dan favors a flat tax. If you were to ask whether Dan thinks pay plans with bonus or commission aspects were better or worse than straight salary, then Dan would likely tell you he thinks bonus and commission is better for the incentive it offers. For government, taxation is their version of bonus or commission. Government uses behavior to encourage behavior you want and discourage behavior they don't want. If you go flat tax, then you lose that capability.
At the same time, Dan is illustrating why so many struggle. Everyone has a story they tell themselves about why they're not doing well. So long as they allow themselves to hide behind that story, they have an excuse. Take the story away and they no longer have an excuse.
Here's a link to Dan's writing. Check out his other products while you're there.
http://gkicwebstore.com/index.php?option=com_content&task=view&Itemid=485&utm_nooverride=1&id=1035
I am surprised by your comment that it would be bad if government loses their abilty to control our actions. The Constitution does not give our Government the right to encourage the behavior those who happen to be in power at the moment want or discourage they behavior they dislike. The Declaration of Independence says all citizens are to be treated EQUALLY. The Constitution was written upon that premise.
The problem too many overlook is that the politicians use the tax system to pick and choose who they want to reward, not just the poor, but all too often the special interst that offers the biggest prize. The income tax is used more to prevent those who are trying to become wealthy than it is against the wealthy (who are most affected by capital gains taxes). The flat tax attempts to curtail favortism, but fails in other ways.
Politicians (of both parties) will never support the Flat tax because it takes away their ability to buy votes.
Personally, I favor the Fair Tax. Among other things, it would prevent those who make their money in the black market, conservatively estimated to account for 15% of GDP, from dodging taxes. They would be forced to pay their fair share when they purchase goods.
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Tim,
Thanks for your comments.
Here is what I had in mind when I wrote what I wrote.
We have a thing called Medicare. We have a lot of people making Medicare more expensive because they smoke cigarettes and get lung cancer. It's to society's benefit to discourage smoking. Therefore, taxes are raised making cigarettes more expensive and smoking cessation programs are deductible as a medical expense. You're using taxation to encourage the behavior you want and discourage the behavior you don't want.
In business, during slow economic times (like the early '80s) we change the depreciation rules to encourage business to buy more hard goods and increase economic activity. That lessens government revenue for a while, but keeps the economy as a whole healthy.
The difficulty in the so-called Flat or Fair Tax is its dependence on the "prebate". The administration of that prebate seems to me to present an immense potential for bureacracy and screw ups even worse than what we have now.
Clearly, the current tax system is rigged to favor the political donor class. Once more, I make a plug for David Cay Johnston's books that demonstrate that fact so clearly.
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