Closing the Wealth Gap

cooperationFace it: you don’t have that many friends. Not that you can rely on, anyway. On the bright side, you don’t really need friends, do you?  You’re a rock star in your own small way. Who made the varsity swim team?  You did.  Who made honor rolls and deans’ lists? You did.  Who landed your job and got the bonus? You did.

With friends like yourself, who needs friends?

If you make 20 times as much as the next guy in line at Target, who cares?  It was his choice to follow a career path that ends at $42,500 a year.

And you’re almost right.  You’re right until you stop to think how much help you’ve had along the way.

What did your dad and mom do for a living?  Didn’t mom go back to work to afford private coaching? Didn’t dad give up better jobs so he’d never have to miss your swim meets?  Your college roommate hounded you to get better grades when you decided to coast. And didn’t your neighbor has his brother-in-law shop your resume around at the company where you’re now a stud?

Human beings are social animals. We don’t just enjoy other people; we need them for survival of the species.  You can’t breed alone.  You can’t thrive alone no matter what you’ve been told. People who understand their need for cooperation and community are not lacking in self-esteem; they’re lacking in hubris.  There’s a difference.

In The Fourth Turning, historians William Strauss and Neill Howe explain:

Where we once thought ourselves collectively strong, we now regard ourselves as individually entitled.

Yet even while we exalt our own personal growth, we realize that millions of self-actualized persons don’t add up to an actualized society.

Our income disparity in America grew, not as a result of unchecked capitalism, but of unchecked government.

From 1970 (actually, long before 1970, but data on income disparity go back only to 1968) onward, the federal government has, through entitlements and services, built walls of separation between American people.  As the Great Society increased dependency on government, it destroyed the fabric of community.

The government, not business, subdivided the United States from a single nation composed of 50 states, into a 300 million nations composed of one lonely human being.

Where CEOs once understood the importance of their employees, they now see only dehumanized “human resources.” Listen in on a conversation in any company today, and you’ll hear the term again and again:  “Do we have enough resources?”  They don’t mean land, capital, and materials; they mean people.

Entitlements are blinders.  They protect the haves from their moral duty to the have-nots.  They protect the have-nots from personal connection to and reliance upon the haves.  And they protect us all from the human responsibility to look out for each other, to take care of ourselves, to graciously accept the kindness of a stranger.

In other words, government dehumanizes.The poor no longer hope for a rich person to lift them up; they demand that government to hand something out. We see each other as obstacles or burdens, not fellow humans trying to get through the best we can.

In 1970, the average CEO made $212,230 while the average worker made $6,540, or 30.6 percent (source:

Today, that gap has grown from 30.6 percent to 265 percent in 2009.  And that 2009 number is low because of the economy—CEO compensation includes stock options and other market-sensitive rewards.  Now the CEO makes $8.5 million compared to the worker’s $32,000.

Socialists exploit this gap. The left sees income disparity as an argument against capitalism.  And too many Republicans ignore the problem, claiming one’s legal income is no one else’s business.

On this, the socialists and the Republicans are both wrong. Socialists are wrong about the cause and the solution; Republicans are wrong about the need for change.

If you take away the government’s unconstitutional entitlement programs, you take away the emotional insulation that separates us from each other.  The CEO and the unemployed both become more reliant upon each other.  Emotional, human bonds replace faceless bureaucracy.  CEOs make less because making 265 times as much as his employees is a business risk he will no longer take.

When I talk about entitlements, I’m talking about all the entitlements—those that allow General Electric to earn $13 billion profit and pay no taxes, and those that allow GM to live beyond its means forever.

It took both corporate and individual welfare to rot the fabric of society. It will take a tea party to weave it back together.

Grab your sewing kit. It’s time to get to work.

What Are We For?

A few weeks back, the Christian Science Monitor asked me to write an op-ed. The subject was, “If the Tea Party ran America, how would things change; and why do you think you’ll win?” The call was my opportunity to break from the easy, unassailable position that things are bad and getting worse. It meant coming up with a solution or two.  And solutions already find disagreement somewhere.

For over a year I’ve said that the Tea Party movement, begun out of anger, must shift its energy over time from anger to solutions.  Now, I have no idea the exact shape of these slopes, but I’ve always pictured a graph something like this:


By November 2010, when our candidates accept the honor of serving in Congress or state capitols, we better have armed them with solutions to the problems developed over the past decades.

On May 23, the Washington Post carried an op-ed by Senator Bob Bennett. Bennett recently lost his bid to stand for re-election when Utah Tea Partyers targeted him for retirement.  In his op-ed, Senator Bennett correctly challenges Tea Partyers to move beyond negative slogans and to adopt positive reforms.

Their two strongest slogans are "Send a message to Washington" and "Take back America." I know both very well because they were the main tools used to defeat me in Utah's Republican convention two weeks ago. They also worked in Kentucky on Tuesday. They are more powerful than most pundits inside the Beltway realize.

More importantly, he points out that, by November or next year, Americans will be ready for sunny optimism again.

We can advance positive ideas, recognize today’s problems, and point to that brighter future all at the same time.  Honestly, that’s what leaders do every day.

No fool would believe that the incoming batch of legislators can solve all the problems generated over fifty years. But we must tackle a few.  I outlined some of the areas for consideration in the CS Monitor piece, but I’d propose just three reforms for the first term: Repeal the healthcare takeover, overhaul the tax code, and set an expiration date on one entitlement program.

Repeal Healthcare Takeover

The first step toward getting out of debt is to stop borrowing money. The easiest way for Washington to stop borrowing money is to stop creating new entitlement programs.

Now, Barack Obama will veto the repeal.  Do it anyway.  The left will claim we have no solution. Let them.  The American people have already decided this, and they came down on our side. The debate is over: ObamaCare lost everywhere except Washington, DC.

The replacement will be to unshackles states from crafting experiments to determine the best solution.  Other states will follow the successful models and shun the failures.  When done at the state level, experimentation works. When Washington experiments, the whole nation is in danger.

Overhaul the Tax Code

The income tax system in the United States is a sham designed to perpetuate itself by breeding succeeding generations of accountants, lawyers, and tax experts who will lobby to sustain an industry.

No more.

We need to begin this overhaul by implementing the system Ronald Reagan and Jack Kemp wanted in the 1970s: A flat tax on earnings above a certain threshold.

I don’t know the exact numbers, but I see the new tax form looking like this:


As I said, the exempt amount and the percentage are probably not perfect, but the formula works. The exempted amount would be indexed to inflation to that the government has no incentive to allow inflation to raise your taxes.

This is a formula everyone can understand, with the exception of Washington bureaucrats and politicians.

I know many in the Tea Party movement are fans of the Fair Tax, but I am not, and I’ll explain why: the Fair Tax is impossible to explain and easy to attack.

In Pennsylvania’s 12th Congressional District race to fill Jack Murtha’s term, the Tea Party candidate, Tim Burns, was portrayed as supporting the Fair Tax.

Most voters didn’t  “get” the Fair Tax idea until Tim’s opponent, Mark Critz, and the DCCC explained it this way: “Tim Burns wants to impose a 25 percent national sales tax on everything you buy.”

Burns lost, and it wasn’t close.

The Fair Tax might represent a much better solution, both economically and Constitutionally, than the Flat Tax.  But if the Fair Tax gets our best candidates defeated and cannot get through Congress, what good is it?  At present, the Fair Tax is simply too complicated to win broad national support.  It involves too many formulas and rebates and repealing the 16th Amendment.

When we get the votes in Congress to repeal the 16th Amendment, I’ll jump onboard the Fair Tax. But let’s do this one step at a time, okay?  Let’s make things better now, then make them best later.  Let’s not make things worse by demanding perfection on day one.

Under the Flat Tax, taxes will go up for some, down for others.  No one will be punished for achieving more.  The deduction of your first $30,000 is more generous than most combined deductions today.

Additionally, there is not marriage penalty because there are no filing statuses other than “Me.”  You worked or didn’t.  You earned or you didn’t.  I don’t care how many kids you have or whether your home is also your office.

Expire One Entitlement

I don’t care which one, but set a formula for eliminating one of the three big entitlements.  I would start with Social Security, which has not only jeopardized our economic future, it encourages otherwise good people to whine and beg for government handouts.

Social Security is a Ponzi scheme that works only if the next generation is much larger than the current one.  When Americans stopped having 4.5 kids per couple, the cookie began to crumble.

There’s a formula for ending Social Security, but it requires we all pay taxes to fund it until its dead. That’s because Congresses have spent all of the Social Security trust fund—and then some.  The SSA hold numerous notes that must be paid out of general revenue.

That’s okay.  If you borrow money, you have to pay it back sometime. And we’re the ones who borrowed this money by refusing to face this monster earlier.  Fine. Let’s get on with it.

First, anyone drawing Social Security or who’s within 15 years of eligibility will receive payments according to the rules in place today.  So I don’t want to hear from Big Old People that I’m stealing their entitlement.  I am not.

Second, those who have already begun paying into Social Security will have a choice: they can receive a tax-free,  lump sum payment equal to their lifetime contribution without interest, or they can leave the money in the SSA until age 65, then receive a lump sum payment including interest equal to the rate of inflation.  Either way, the FICA withholding—the individual’s and the employer’s—stops.

Third, those fortunate souls who are too young to have opened an SSA account never will.  They simply pocket the 16 percent that currently goes to fund a failing system.

States may want to create their own voluntary or even mandatory retirement scheme.  Fine.  That’s how the federalist system works.  I wouldn’t support a mandated state system, but there’s nothing in the Constitution that would prevent a state from adopting such.  The people of the state could always vote out the legislators who created it.


My solutions may not solve all of our problems.  But they will advance four goals of the Tea Party movement:  smaller government, lower taxes, fiscal responsibility, and federalism.

By adopting this list of goals, candidates will move to the right of my chart above, providing solutions instead of just pointing out problems.  Yes, our enemies will throw mud at these ideas: there’s no idea that won’t find critics.

In the end, our mission from day one has been to make America’s future brighter than its brilliant past. We can do that only by moving toward the future we want, not away from the unknowns we’re afraid of.

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