James has a post on the difficulty of raising tax revenue over at Outside the Beltway. Rather than comment on the discussion specifically, I think I’ll go off on a tangent and fantasize about how I’d rectify our fiscal ship if I didn’t have pesky things like politics and the Congress to worry about.
I would means test Medicare and Social Security. I would raise the Social Security retirement age slightly. I would raise the Medicare eligibility age slightly.
I would limit federal highway and infrastructure spending to actual interstate spending. Bridges across the Mississippi between Iowa and Illinois, yes. Bridges to nowhere, no. Highway spending would be restricted as a matter of principle and policy to the area five miles on each side of a state border. The Erie Canal, arguably the most significant item of travel infrastructure ever built in the United States, was built without federal money. Hawaii and Montana can build their own roads.
I would abolish defined benefit pension plans for federal employees. I would abolish pension plans other than Social Security for elected officials outright.
I would establish an objective of cutting our military spending in half and reduce our military commitments commensurately. As long as we’re fighting two wars that’s impractical but it should be a matter of policy and principle.
I would abolish agricultural subsidies or, at the very least, means test them.
I would abolish subsidies to the arts except as they apply to decorating federal buildings.
I would raise FICA max to whatever the president’s salary is as a matter of principle and policy and require all federal employees including elected officials to participate.
I would limit all personal federal income tax deductions including the mortgage interest deduction except, possibly, the healthcare deduction.
I would tax employer-paid benefits including healthcare benefits as income.
I would impose a minimum income tax rate that everybody was subject to. When I made $1,400 a year I paid taxes on it. And it’s patently unfair for the ultra-rich to pay accountants and lawyers to diddle the system.
I would raise the gasoline tax and, ideally, impose a carbon tax, for geopolitical reasons among others.
I would impose a transaction tax on the sale of equities and similar financial instruments. While I think that the sale of stock by companies is a benefit to the society, I’ve never heard a convincing argument that high velocity sales had any social value.
Other odds and ends
While I’m fantasizing, here are a few more.
We should adopt a policy of strict reciprocity in foreign policy. For example, if another country eliminates its tariffs and quotas on our goods and doesn’t subsidize exports, we should be willing to do the same with their goods. We should restrict the ownership of real property by foreign citizens in the United States to whatever the restrictions on the ownership of real property by Americans in their home countries might be.
I would reduce the term of copyrights to 25 years or the natural life of the author, whichever is less. I’d prefer 15 years but I’m willing to compromise. Copyrights would lapse if the work goes out of print or distribution.
I would think about instituting a loser pays policy on federal lawsuits.
That should be enough to prevent me from ever getting elected to anything.