The Right Trump/Republican Reforms are Needed Now

© David Burton 2017

     Donald Trump was voted in as president on his pledge to “make America great again.” The American electorate also voted in Republican majorities in both the U.S. Senate and the House of Representatives. It would seem that such an occurrence would be the ideal time for instituting the conservative reforms that marked the platforms of both Donald Trump and the Republican party. So far, this has proved to be an illusion. Some two months into the new president’s term of office, his immigration initiatives have been stymied by the courts and the Republican Congress could not come up with a new health care plan that both Trump and the Republicans promised the American people.

     This has been an inauspicious start to the Trump presidency. The conservative element in America expected the rapid enactment of what they (and I) considered to be much needed and long overdue governmental reforms. Donald Trump, Republicans and conservative-minded Americans need to reorganize and implement the reforms that America has been needing. American patience will be exhausted if progress does not become rapidly apparent. The time for lofty promises and unsubstantiated rhetoric is over. The time for implementation of meaningful reforms is now. Americans are becoming increasingly impatient with the false starts that have so far occurred.

BIG GOVERNMENT
     “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!” — Ronald Reagan

     The federal government is too big and bloated – and that means it spends too much money and wastes too much money. Duplication of federal programs and services alone costs an estimated $45 billion annually.

     Annual spending on Social Security, Medicare, Medicaid, and other health programs is massive compared to even the most egregious parts of the federal budget. Estimates have pegged this at nearly 50% of the total federal spending!

     “President Trump presented his first budget to Congress {in early March of 2017}. It is, as The Washington Post points out, ‘historic’ because if adopted it would be the biggest contraction in the federal government since the end of World War II. Predictably, a Post story focuses on the number of federal workers it estimates could lose their jobs, rather than on whether those jobs and the programs associated with them are necessary.
     “The biggest drivers of debt remain entitlement programs [Emphasis mine] — and true to his campaign promise, the president is not touching those, at least for now. His challenge will be to ask Congress to eliminate failed programs, because too many members rely on campaign contributions from lobbyists with an interest in maintaining the status quo.
     “Some federal agencies have long practiced a policy of telling employees to find ways to spend leftover money at the end of a fiscal year for fear their budgets might be reduced. The practice is a contributing factor to government’s seemingly unstoppable growth.
     “While most proposals for cutting the size and cost of government tinker with spending at the edges while ignoring the main drivers of debt, a beginning can be made. If Republicans start with failed programs and present them as failures that waste taxpayer money, the public might come to trust them when it comes to the bigger things.
      - - -
     “The U.S. government . . . contributes money to many international {and domestic} organizations, which could easily be financed by private capital, if anyone is interested in them. These include the International Coffee Organization, The International Copper Study Group, The International Cotton Advisory Committee, the International Grains Council, and . . . the International Lead and Zinc Study Group.
     “There are 18 Energy Department programs {that} could be turned over to the private sector.
     “Familiar targets include privatizing Amtrak and eliminating all subsidies for the Public Broadcasting Service, which once served a valuable cultural purpose, but is, today, in an age of multiple TV choices, as outdated as a VHS tape.
      - - -
     “Cutting the size and cost of government is doable if the reductions are properly and skillfully presented to the public. Predictably, Democrats will howl about starving children because they always do . . .
     “Is there enough of our Puritan DNA left to eliminate waste? We’re about to find out. If a government headed by Republicans can’t, or won’t, live up to their philosophy of smaller government and more personal freedom, why do we need them? If unnecessary spending and needed entitlement reforms are not accomplished by Republicans, the spending will continue and the debt will grow until the inevitable economic collapse.” (Rev. 1)

THE ENTITLEMENT NATION

     Liberal largess has enticed too many Americans to join the “Entitlement Nation”, a nation in which the government hands out “freebies” to far too many of its citizens who should be out there fending for themselves instead of sponging off the sweat and toil of a shrinking percentage of the population who actually work and contribute something to the nation instead of standing there with their hands outstretched for alms.
     One telling manifestation of this growing Entitlement Nation is the fact that many able workers are simply refusing to join the work force. “After 88 consecutive months of the economic expansion that began in June 2009, a smaller percentage of American males in the prime working years (ages 25 to 54) are working than were working near the end of the Great Depression in 1940, when the unemployment rate was above 14 percent. . . .
     “The work rate for adult men has plunged 13 percentage points in a half-century. . . .
     “. . . This . . . transformation . . . is largely voluntary. Men who have chosen to not seek work are two and a half times more numerous than men that government statistics count as unemployed because they are seeking jobs.
     “. . . {Our Entitlement Nation} has made it a ‘viable option’ for ‘sturdy men’, who are neither working nor looking for work to choose ‘to sit on the economic sidelines, living off the toil or bounty of others.’ Only about 15 percent of men 25 to 54 who worked not at all in 2014 said they were unemployed because they could not find work.
     “. . . The ‘economically inactive’ have eclipsed the unemployed, as government statistics measure them, as the ‘main category of men without jobs.’ “ (Rev. 2) Clearly, a very large number of able bodied men have decided that they can live comfortably off the toil and sweat of others. Why work when you can get paid for not working? President Trump and the Republican Congress need to put an end to this trend. Able-bodied Americans should be working – not drawing a paycheck to not work!

     “Today, American government has become is a vast empire of entitlement payments. It devotes more attention and resources to the public transfer of money, goods and services to individual citizens than to any other objective.

     “The growth of entitlement payments over the past half-century has been breathtaking. In 1960, U.S. government transfers to individuals totaled about $24 billion in current dollars, according to the Bureau of Economic Analysis. By 2010 that total was almost 100 times as large. Even after adjusting for inflation and population growth, entitlement transfers to individuals have grown 727% over the past half-century, rising at an average rate of about 4% a year.” (Rev. 3)

     One simple reform that President Trump can quickly implement is to re-institute the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 or the Welfare Reform Act of 1996 as it is sometimes called. The Act required work in exchange for temporary relief; no more than two years could be used before parents would be working or in job training. No recipient could have more than five years of assistance cumulatively.The Act therefore required, among other things, that recipients work! But, in July of 2012, the Obama Department of Health and Human Services(HHS) effectively "rewrote" the welfare reform law of 1996, removing the work requirements that were the foundation of the reform law.

     A Pew Research Center survey conducted in 2012 found that 55% of Americans had received government benefits from at least one of the six best-known federal entitlement programs: Social Security, Medicare, food stamps, Medicaid and Temporary Assistance for Needy Families (welfare).[4] This is astounding! These are statistics that we would expect to find in moribund communist and socialist economies – not in what once was a vibrant capitalist nation like the U.S. President Trump and the Republican Congress need to reverse this march toward self-destruction and start us moving toward the goal of “making America great again”!

HEALTH CARE

     Health care reform is a must for Donald Trump and the Republican controlled Congress, i.e., repeal of Obamacare and replacement with a better health care plan for America. As C.S. Lewis wrote, “ ‘We all want progress, but if you’re on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.’
      - - -
     “But politics doesn’t work this way.
     “For starters, we don’t walk down this road as individuals, but as a very large group. And when we walk down the wrong road long enough, people in the troupe start to like it. They like the sound of the birds and the shape of the trees. They grow accustomed to the weather and the view. Those who said this was the right road don’t want to admit they chose poorly or forfeit their roles as leaders. They insist the payoff is just around the corner.
     “Meanwhile, they add that road not taken was a bad one, with perils and horrors we cannot imagine. All bad things happen on the road not taken, they say. Why turn back with such wonderful things ahead?
      - - -
     “{So it is with Obamacare and health care reform!} In America, once an entitlement is created, it’s extremely difficult to get rid of. It turns out that people like free things. And when they can’t get stuff for free, they like to purchase it at way below true cost. The wrong road comes with amazing subsidies. The right road has a daunting tollbooth.
      - - -
     “{Republican} House Speaker Paul Ryan is in the worst position possible right now. He is a grown-up conservative. He understands both that we must get off the road we are on and that doing so is very, very hard. It’s easy to shout, ‘We’re going the wrong way!’ It’s another thing to convince the caravan to turn around.
     “Some of the critics of his plan to repeal and replace Obamacare have many good arguments on their side. The replacement bill certainly needs fixing. But other critics don’t seem to care much about the legislative or policy details at all. They just want to see Ryan himself repealed and replaced with a more pliant nationalist.
     “Ryan surely would prefer a quick and total repeal of Obamacare. But he has to deal with the reality that Democrats will lay down on railroad tracks before they agree to change a comma in Obamacare, and he must deal with the byzantine rules of reconciliation.
     “. . . Trump won by flipping many Obama voters to the GOP column. Obamacare is popular with this constituency. . . .
     “Hence the bizarre argument on the right: the loudest voices for free-market purity on the health care side, with a president who often says he wants to stay on the road that Obamacare (and the New Deal and the Great Society) put us on. . . .
     “It’s almost like some people would prefer to stay the course but be able to complain about it at the same time, like backseat drivers on the wrong road.” (Rev. 5)

     President Trump and the Republican leadership badly messed up the “repeal and replacement” of Obamacare. They need to redo their plan and get it right the next time. The next time will likely be their last try.

     There were numerous problems with Trump/Republican Obamacare replacement plan and many of these problems are identified in House Republican Health Care Bill Misses the Mark (Rev. 5) Some of the problems identified were:

1. The plan focused on protecting those who gained subsidized coverage through the law’s exchange subsidies and Medicaid expansion, while failing to correct Obamacare’s misguided insurance regulations that drove up premiums for Americans buying coverage without government subsidies.

2. The plan instituted a new subsidy program that would have provided grants to states of up to a total of $100 billion over the years 2018-2026.

3. The plan failed to wind down the Medicaid expansion that might have encouraged states to add enrollees.

4. The plan failed to take the first step toward providing more equitable tax treatment of health insurance.

     According to estimates from the nonpartisan Congressional Budget Office (CBO), “. . . the Republican bill to repeal and replace the Affordable Care Act would reduce the federal deficit by $337 billion over a decade but would also leave 24 million more Americans uninsured during that same period.” [Emphasis mine] (Ref. 7) Surprise! The Republican plan removes the Obamacare mandate requiring everyone to get health care coverage, thereby providing everyone with the option of not purchasing health care insurance. As a result, not everyone will opt to purchase health care coverage and, as the CBO report says, the number of uninsured will go up. This is what freedom of choice means! If you don’t want health care insurance, the GOP plan will not force you to buy health care insurance.

     Note that the report also says that the proposed healthcare plan could save the nation $337 billion over ten years compared with Obamacare. The Republican plan supposedly addresses Americans’ demands to repeal the Affordable Care Act (ACA) which has resulted in “skyrocketing premium rates and decreased coverage choices as insurers fled the market.” (Ref. 8) The ACA has proven to be a pack of untruths and broken promises.

     The Affordable Care Act has proven to be a failure - it needs to go. “Obamacare has limited choices for patients, driven up costs for consumers, and buried employers and health care providers under thousands of new regulations. It forced people into expensive plans they did not want and put the government in charge of one of the most personal decisions families will ever make.” (Ref. 9)

     The ACA replacement needs to fix the problems that plagued the plan from its inception, but, its replacement needs to retain what was good and replace what was bad. The new plan, which I name “ Americare”, should provide insurance for those who otherwise could not afford the cost of health care. “Americare” should provide for coverage of pre-existing conditions (but it should not reward those who voluntarily refused to purchase healthcare insurance until they became sick) and it should cover catastrophic health care costs. Health insurance should not be mandatory. Those who don’t want to pay for health care insurance should be free to so choose. However, should they require health care, they would be expected to pay for their care, up to the point where the cost burdens become catastrophic. The choice is theirs to make – pay for insurance or take the risk of having to pay out-of-pocket should the need arise.

     The cost of health care coverage for those who cannot afford it should not be placed on the shoulders of those who can afford to purchase health care insurance. Instead, federal taxes should be increased to pay for the health care of those who are unable to pay for it on their own. Let individual health care insurance reflect the cost of health care to those paying for the insurance.

     We need medical liability reform. “The nation’s medical liability system is broken, and it has imperiled patient access and imposed tremendous costs on our nation. The current system has forced doctors out of practicing in certain specialties; it has caused trauma centers to close; and it has forced pregnant women to drive hours to find an obstetrician. {The current system also has imposed a tremendous burden in unnecessary costs on our national health care system as a result of the practice of “defensive medicine” to avoid frivolous law suits.} Estimates are that the failure to enact meaningful medical liability reform costs our nation’s health care system as much as $300 billion each year.” (Ref. 9)

     “Americare” should once-and-for-all address the issue of medical lawsuits that simply raise medical expenses while lining the pockets of successful ambulance chasers. Medical lawsuits should result in financial damages only when there is clear and unmistakable negligence and/or criminal intent. There should be no reimbursement for pain and suffering. Awards should only cover the actual costs incurred. Suits against drug companies for unexpected side effects or consequences once the drug has been approved by the government should not be allowed. Instead, the government should establish a fund to cover the cost of such incidents and awards from the funds should be made on the basis of actual costs incurred without the need to institute unnecessary and costly court cases.

     Americans should be free to choose their health care providers. Payment for their health care services should be from insurance, out-of-pocket, or by federal and/or state programs, such as “Americare”, Medicare, and Medicaid. Health care providers should accept any and all such forms of reimbursement.

     Health care costs for seniors are higher than for the younger population. At the same time, seniors are generally retired and have restricted incomes. Seniors rely on Medicare for access to health care and still millions more count on Medicare to provide health security when they reach retirement. Currently, the program is unsustainable and will eventually fail without significant reforms. Medicare needs to be strengthened. “Americare” should address the problem, correct deficiencies in the Medicare program and provide the funding needed to ensure its continuance.

     “Americare” should provide relief to the American business community in terms of the health care coverage that American businesses provide to their employees – especially to small businesses. This means reduced regulation and elimination of bureaucratic red tape.

     As the saying goes, “The devil is in the details.” The call above for replacement of Obamacare with “Americare” is merely an incomplete first step toward what is needed. There are a multitude of other considerations and details that need to be addressed. But what has been presented here is a good and necessary start. Obamacare unwisely tried to do much too much at one time and failed miserably. Instead, let’s proceed in a more orderly fashion this time and incrementally implement a comprehensive health care plan over a reasonable span of time. But, let’s get the ball rolling now with the most important items. We need to gradually replace the failed parts of the ACA and begin to introduce the elements of a new plan, “ Americare”, with well thought out additions over a reasonable span of time. This time, let’s get it right and let’s not rush to create another disaster.

     Donald Trump and the Republicans badly flubbed their first attempt at repealing and replacing Obamacare. They need to regroup and get it right the next time. A good starting point would be an “ Americare” type plan with a number of features detailed in a plan by The Heritage Foundation. (Rev. 10)

NATIONAL DEFENSE

     Alexander Hamilton wrote in Federalist 23 that the first of the “principal” constitutional obligations of the federal government is to provide for the “common defense” of the United States, and President George Washington wisely reminded us that “To be prepared for war is one of the most effectual means of preserving peace.”

     “At the conclusion of 2016, we here in America would be wise to take heed of these admonitions. The world around is becoming increasingly dangerous and our ability to counter these dangers is being seriously called into question. Uncertainty as to America’s ability to defend itself in a dangerous world is not conducive to peace and tranquility.” (Ref. 11)

     According to the conservative think tank, the Heritage Foundation (Ref. 12), the strength of the U.S. military at the end of 2016 was rated as: Army – Weak; Navy – Marginal; Air Force – Marginal; Marines – Marginal, Nuclear Force – Marginal. At the same time, the following nations and regions were rated as posing a high threat to the United States: Russia; Iran; Middle East Terrorism; African-Pakistani Terrorism; China; North Korea.

     American defense spending declined during the Obama presidency, as failure to achieve consensus on a budget resulted in sequestration that stymied any attempt at realistic defense funding. Unfortunately, history has shown that international challenges often occur during the early stages of a new administration such as that of Donald Trump.

     “The growth in global challenges is occurring at a time when rapid technological change is reducing many operational advantages the U.S. military possessed for the past several decades. Potential adversaries continue to pursue new options for the deployment of nuclear weapons, develop longer range surveillance and strike weapons, and undermine the cybersecurity of U.S. government and industry information systems. For the past several years, senior defense leaders have warned against the narrowing technological edge of our military forces.” (Ref. 13)

     By the end of 2016, U.S. defense spending had declined to around 4% of Gross Domestic Product (GDP).[14] Other sector spending, as a percentage of GDP, was: Government Pensions - 7% GDP; Government Health Care - 8% GDP; Government Education - 6% GDP; Government Welfare - 2% GDP; All Other Spending - 9% GDP; Federal Deficit - 3% GDP. In other words, defense spending amounted to only about 11% of total government spending, while pensions, health care, education and welfare gobbled up 64%.

     “Meanwhile, our allies — particularly those in Europe — have woefully under-invested in defense. But the biggest factor has been our own failure to reinvest in our increasingly strained military. The defense budget has been cut by 25 percent over the last five years. [Emphasis mine]
     “U.S. combat operations have declined since the Bush era, but contrary to President Obama’s claims, no wars have been ended.
     “Meanwhile, other operational demands, such as increased deployments to Western Europe, have arisen.
     “Yet our military is markedly smaller than it was a decade ago. In fact, the Army is smaller than at any time since before World War II. The Navy and Air Force are likewise at historically small levels.
     “Readiness is another problem. Top brass have testified that only three of 58 Army brigade combat teams are ready to fight; less than half of the Air Force is ready, and half of the Navy’s aircraft are grounded for parts or maintenance.
     “And budget cuts have dramatically reduced flight hours for pilots and other training essential to keeping our warriors sharp and safe. [Emphasis mine]
     “President Trump has proposed boosting the Pentagon’s budget, but his proposal is at least $30 billion short of what it needs to be. Far greater investment will be needed if we want to assure that America can remain a global power.” (Ref. 11)

     We need to provide the military and the defense industry the monies they need to ensure America’s military dominance over any potential threat. Our potential enemies need to know that any attack on these United states will result in a response consisting of “shock and awe!” These potential enemies must be convinced that they cannot defeat us and that their attacking us will result in a very punishing and overwhelming response. In terms of national defense, a “commensurate response” is simply an oxymoron!

     Defense spending must be increased and the Trump administration is expected to push for these much needed spending increases. However, liberal “Democrats have insisted that any increase in defense spending must be matched by increases in non-defense spending”. (Ref. 15) This is sheer stupidity and blatant blackmail! These Democrats will shed their crocodile tears about taking monies away from starving babies and destitute families. What these politicians are really afraid of is losing the votes of constituents who depend on these politicians to continue feeding them free lunches. True to the tenets of bleeding heart liberalism, these Democrats want to continue feeding the entitlement monster that has engulfed this nation. The “gimme” crowd won’t give up their freebies without a fight, even at the risk of harming the defense capabilities of this country. It’s time for conservatives, Republicans, all intelligent Americans and Trump supporters to band together to reverse the trend in entitlement handouts, get a handle on the federal deficit, and to reinvigorate our military while there is still time.

THE FEDERAL DEFICIT

     The federal deficit must be brought under control and brought under control very quickly. According to the Congressional Budget Office (CBO), as of January 2017, the federal debt for fiscal year 2017 will have ballooned to $14.8 trillion. The projections for fiscal year 2017, at the end of the Obama administration, showed revenues of only $3.4 trillion versus expenditures of $4.0 trillion, meaning still another increase in the federal debt of $559 billion. [16]

     This means that every man, woman and child in this country have a debt amounting to somewhere near $50,000 each. According to one source, the growing debt has been the result of 4 causes: 1) The 9/11 attacks that have led to the War on Terror. Annual military spending rose from $437billion in 2003 to a peak of $855 billion in 2011; 2) Social Security, Medicare and other mandated program spending has increased to more than $2 trillion a year since FY 2011; 3) The $787 billion economic stimulus package added to the 2009 deficit; and 4) the 2008 recession reduced federal revenue and taxes. Government income fell from its pre-recession record of $2.57 trillion in FY 2007 to $2.1 trillion in FY 2009 and didn't recover until FY 2013 when it reached $2.78 trillion.[17]

     “The United States recorded a government debt equivalent to 104.17 percent of the country's Gross Domestic Product in 2015 {and 104.8% in 2016}. Government Debt to GDP in the United States averaged 61.94 percent from 1940 until 2015, reaching an all time high of 121.70 percent in 1946 {the end of World War II} and a record low of 31.70 percent in 1974.” (Ref. 18)

     The time has come to reverse this destructive trend. It’s time to start paying off our national debt and the only way this can be done is by taking in more revenue than we spend. In other words, we, as a nation must increase the taxes that go into our treasury so that the money collected exceeds the money we spend each year. Federal revenues must exceed federal expenditures and there needs to be an end to deficit spending! Exactly how we accomplish this is not as important as simply doing it. We can increase taxes or cut spending or do both at the same time. But, the net result must be more money coming in than is going out. The budget proposed by President Trump in March of 2017 does not achieve this end! He and his Republican supporters need to go back to the drawing board and revise their budget proposal.

     “{F}our well-known, partisan and non-partisan tax research organizations . . . concluded that the tax plan proposed by the president and mostly endorsed by the Republican leadership would fail to pay for itself.
     “. . . the president's 2017 budget proposals, which slash spending across the board, would still contribute significantly to the nation's debt over the next 10 years, according to a recent analysis by the Congressional Budget Office.
     “More than two-thirds of the government's $3.8 trillion in spending goes towards the funding of Social Security, Medicare, Medicaid, veterans, and other federal health benefits. Without entitlement reform, the president's cost cutting proposals will have little impact. Let's also not forget that about 6 percent of the government's spending is for interest on its debt, a number that will no doubt increase over the next few years, as interest rates rise along with debt levels.
     “Some business owners fear that rising deficits and debt, fueled by the loss of government revenues as a result of tax reform, could put our country in the same economic predicament that recently challenged Greece, Spain, and other countries with excessive government debts.
     “. . . As other foreign markets (China, Europe, England, India) become more stable, they will become more attractive to investors than the U.S. Some think that as the risk of default here grows, the flight of capital away from U.S. markets could have disastrous impacts on our economy." (Ref. 19)

     Donald Trump and the Republican majority in Congress have two years until the next mid-term elections to start this process. They have less than two years to start convincing America that debt reduction is important enough to mean less money in our pockets and less government largesse. Weening America off of government handouts will not be an easy sell but that $2 trillion a year in federal mandates must be a major candidate for the budgetary axe.

CORPORATE TAX REFORM

     Reform of the U.S. corporate tax code has long been needed. The government’s corporate tax code has put American businesses at a major disadvantage relative to foreign competitors, encouraged the move of businesses to foreign shores, and created the need to spend enormous amounts of corporate funds on legal advice on how to navigate the byzantine regulations included in the tax code.

     Republicans and the Trump administration are attempting to once-and-for-all end the corporate tax code fiasco with something called the BAT. “The House Republican plan to overhaul the corporate tax code . . . would lower the corporate tax rate to 20%, from 35%, eliminate levies on all U.S. exports and impose a 20% tax on imports. It's a mix that is expected to raise an estimated $1 trillion in federal revenue over a decade, according to the Tax Foundation . . .
      - - -
     “. . . proponents of the plan . . . say it is bold and revolutionary at a time when the country is clamoring for big changes that would curtail corporate taxes and encourage more U.S. manufacturing. The BAT is not just a new tax rate, after all. It would burn down the current tax code and replace it with something entirely new. . . .
      - - -
     “The problem, in a nutshell, is that the 35% corporate tax rate is among the highest in the developed world. But because of loopholes, it produces less federal revenue, as a percentage of GDP, than most other countries'. The current system also creates an incentive for companies to perform feats of legal acrobatics, like relocating corporate headquarters and shuffling intellectual property to far-flung foreign locales, to shield their balance sheets from the IRS.
     “That's where the BAT comes in. In theory, this little tax will fix those big problems. Instead of taxing corporate profits, the BAT taxes corporate cash flow. That means it doesn't matter where a company's headquarters are located or where its intellectual property is housed. All that matters is where it sells its products. If it sells its products in America, it pays 20% on what it makes. If it sells its products abroad, it pays no U.S. corporate tax at all. (Foreign taxes would still apply.)
     “The BAT also simplifies the laundry list of deductions and carve-outs buried in the current tax code. Under the BAT, companies would be allowed to deduct from their taxable income U.S.-based labor costs and expense capital, like machinery, immediately upon purchase. But they would no longer be able to deduct net interest, asset depreciation or the cost of any imported goods.
      - - -
     “. . . Since the tax has the effect of essentially subsidizing exports and penalizing imports, textbook economic models predict it should have the effect of strengthening the value of the U.S. dollar by as much as 25%. . . .” (Ref. 20)

     Keep in mind the fact that the tax rate is irrelevant – it’s the tax revenue that’s critical. If the tax rate goes down, but sales increase enough, then tax revenue can go up. For example, if we have sales of $100 with a tax rate of 35%, then tax revenue is $35. But, if we reduce the tax rate to 25%, causing sales to rise to $160, then tax revenue will increase to $40.

     With a Republican president and a Republican congress, the chances for meaningful reform of the corporate tax code are greater than ever. It’s clearly time for such reforms to be enacted. The need for these reform is even recognized by many Democratic lawmakers. Let’s hope that the Washington infighting will be suspended long enough for these much-needed reforms to be implemented.

INCOME TAX REFORM

     The time has long since passed for a major overhaul of the individual income tax system. “We, as a nation, are wasting the time of taxpayers (that’s you and me), the resources that comprise the legal, accounting and other tax preparation organizations, and the need for the bureaucracy that we call the Internal Revenue Service (IRS) and other governmental organizations that are involved in tax collection (including preparing and updating the tax codes, investigations of tax fraud, and prosecution, etc.). This waste of resources shows up in the cost of goods and services produced (you and I pay these costs) and in the reduced competitive position of the goods and services we export because of their higher prices to cover the costs of lawyers, accountants, and government bureaucrats.
      - - -
     “{Back in 2005} According to an article on page 33 of the April 15th 2005 Boston Herald, it {took} Americans some 6.6 billion hours to do the paperwork for our tax returns. {It’s only gotten much worse since then.} According to the government’s budget office, tax work ‘towers over the entire paperwork burden for the rest of the federal government.’ The income tax code is an incomprehensible, multi-thousand page maze of inane regulations. Even the IRS can’t understand these regulations. As often as not, if you ask them for a ruling, they will give you an incorrect interpretation.” (Ref. 21)

     “Deroy Murdock, in an article tilted, Rationale for complex Tax Code falls flat on page 17 of the April 17, 2007 edition of the Boston Herald wrote: The Tax Code and its accompanying regulations and IRS rulings stretch longer than 71 Gideon Bibles stacked side by side.
     “A typical taxpayer needs nearly 40 hours to complete Form 1040.
     “The IRS estimates that a self-employed person needs more than 80 hours to prepare their return, the equivalent of a 2-week paid vacation.
     “The Tax Foundation estimates that IRS paperwork compliance cost over $265 billion in 2005.
     “Even worse - nobody knows what the tax code means! Recently, USA Today had 4 tax professionals prepare returns for an imaginary family. All 4 results were different!
     “In 1998, Money magazine asked 46 tax professionals to prepare returns for another hypothetical family. No 2 returns were the same! Calculated taxes owed varied from $34,240 to $68,912.
     “David Keating of the National Taxpayer Union has written that, ‘The Tax Code is so convoluted that no one inside or outside the IRS understands it.’ “ (Ref. 22)

     The time has come stop this madness! But, how? The current income tax code is beyond repair. It needs to be totally done away with and replaced with a new and much more efficient system of individual taxation. Donald Trump, Republicans, Conservatives, Liberals and even fair-minded Democrats need to finally get together to institute long overdue and meaningful income tax reforms! One such way of achieving this is to totally discard the current income tax system and replace it with “a consumption tax, such as a national sales tax or value added tax (VAT). Let’s face it. The wealthy buy more than the poor. Therefore, they’ll pay more with a consumption tax than the poor. The more a person makes, the more the person will spend and buy, and the more that person will pay in terms of taxes. You and I will stop wasting our time preparing income tax returns. The lawyers and accountants can turn their talents to more useful pursuits.
      - - -
     “As Malcolm Forbes noted in 1993. . .’Whatever the variant, a flat tax would trigger a volcano-like economic boom. The prodigious amount of brain power and time now spent on coping with our currently incomprehensible tax code would be released for productive uses. This redirection alone would hugely stimulate the economy. . . .’
      - - -
     “In a 1994 article, Steven Forbes wrote that the elimination of the income tax code, ‘would redirect an immeasurable amount of American brainpower from the numbing exercise of coping with the incomprehensible tax code to more productive purposes. There would be an enormous increase in efficiency.’ In the same article, Forbes estimated that the savings from eliminating the federal income tax would amount to ‘$100 billion now spent filling out tax forms and other forms of compliance and another $100 billion wasted from investments being made for tax (avoidance) rather than economic purposes.’ Eliminating the income tax, ‘would get rid of a profoundly corrupting influence on our political life: the countless millions of dollars now showered on politicians and bureaucrats to influence tax-related rules and legislation.’
      - - -
     “The time has come to get rid of the tax man as we know him. Let’s get rid of the income tax and replace it with a spending tax. At the same time, let’s get rid of the thousands of pages in the current tax code and let’s replace it with a streamlined and simplified set of rules that everyone, including the tax bureaucrats, can understand and follow.” (Ref. 21)

     The American income tax system is not only a mess, but an extraordinarily complex mess, for individuals, for corporate entities, businesses and for the Internal Revenue Service (IRS) itself. Call them with a question about your income taxes and there is no guarantee that you will receive a correct reply. Today’s federal tax code is not only long, It’s very long! - and it keeps getting longer. For example, in 2010, there were something like 579 changes. That’s more than a change every day.[23]

     In 2011, it was estimated that, “U.S. taxpayers {would} spend $431 billion just complying with the tax code . . . That . . . represent{ed} just the value of the time taxpayers {would} spend keeping records and filling out tax forms, and the cost of paying professional tax preparers to do it for them, plus the cost of the bureaucracy needed to administer the tax code. That $431 billion amount{ed} to 30 percent of the total of income taxes collected.” (Ref. 23)

REGULATORY REFORM

     “Manufacturers rely on a stable and balanced regulatory environment to create jobs and fuel economic growth. Federal regulation is estimated to cost more than $2 trillion annually. [Emphasis mine] The burden of regulation falls disproportionately on small businesses and manufacturers. Dollars spent by manufacturers on regulatory compliance for cumbersome or duplicative regulations are dollars not spent on capital investment or hiring new employees.” (Ref. 24)

     What is required is a thorough review of all regulatory agencies and all federal regulations to determine their current need, their cost effectiveness, and duplication. All regulations and regulatory agencies should have sunset provisions, i.e., each should be periodically reviewed to determine if they are still needed, need to be updated, or should be terminated.

     A few of the regulations that stand out as urgently needing major reform or outright termination are Sarbanes-Oxley and Dodd-Frank.

     The Sarbanes–Oxley Actof 2002, is also known as SOX. It sets new or enhanced standards for all U.S. public company boards, management and public accounting firms. The bill was enacted as a reaction to a number of major corporate and accounting scandals. Since its enactment, opponents of the bill have vociferously claimed that it has reduced America's international competitive edge against foreign financial service providers and has introduced an overly complex regulatory environment into U.S. financial markets.
     These opponents say SOX was an unnecessary and costly government intrusion into corporate management that places U.S. corporations at a competitive disadvantage with foreign firms, driving businesses out of the United States. In addition, these regulations are damaging American capital markets by providing an incentive for small US firms and foreign firms to deregister from US stock exchanges. According to a study by a researcher at the Wharton Business School, the number of American companies deregistering from public stock exchanges nearly tripled during the year after Sarbanes–Oxley became law. Small businesses and foreign firms are reluctant to register on American stock exchanges because of the costs Sarbanes–Oxley imposes on them. According to a survey by Korn/Ferry International, Sarbanes–Oxley cost Fortune 500 companies an average of $5.1 million in compliance expenses in 2004, while a study by the law firm of Foley and Lardner found the Act increased costs associated with being a publicly held company by 130 percent.
     A December 21, 2008 Wall St. Journal editorial stated, "The new laws and regulations have neither prevented frauds nor instituted fairness. But they have managed to kill the creation of new public companies in the U.S., cripple the venture capital business, and damage entrepreneurship. According to the National Venture Capital Association, in all of 2008 there have been just six companies that have gone public. Compare that with 269 IPOs in 1999, 272 in 1996, and 365 in 1986."
     The editorial went on to say that Sarbanes–Oxley had essentially “killed the creation of new public companies in America, hamstrung the NYSE and Nasdaq (while making the London Stock Exchange rich), and cost U.S. industry more than $200 billion by some estimates."[25]

     “… of 80 international companies that went public {from 2001 to 2006} on the London Stock Exchange, 90% decided Sarbanes-Oxley made London more attractive relative to U.S. exchanges.
     “More damningly …, {by} 2000 nine out of every ten dollars raised by foreign companies through new stock offerings was done in New York. {in 2006}, nine out of every ten dollars raised {was} in London or Luxembourg.
     “{By 2006, only 4 years after its enactment,} … Sarbanes-Oxley {was reported to have} cost public company shareholders $1.4 trillion, not to mention the billions of dollars spent on compliance. These numbers are once again the ‘seen.’ What we don’t know is what investors lost when private companies stayed private in order to avoid the law’s draconian rules. We also will never know what opportunities and risks public companies avoided ith Sarbanes-Oxley in mind. …. How many … entrepreneurs have folded up their tents or kept their companies private out of fear of Sarbanes-Oxley liabilities?” (Ref. 26) While the cost to American business was unquestioned, the effectiveness of Sarbanes-Oxley in preventing corporate malfeasance was seriously in question.

     Another onerous regulation is the Dodd–Frank Wall Street Reform and Consumer Protection Act The Act was an attempt “to promote the financial stability of the United States by improving accountability and transparency bailouts, to protect consumers from abusive financial services practices, and for other purposes.”

     The Act contains over 2,300 pages and “is categorized into sixteen titles and by one law firm's count, it requires that regulators create 243 rules, conduct 67 studies, and issue 22 periodic reports.” (Ref. 27)      Once again, the government’s response to a problem was to generate a flood of new regulations, to require reams of paperwork from American businesses and to create still more regulatory bureaucracies staffed with thousands of government workers.

     Both Sarbanes-Oxley and Frank-Dodd are glaring examples of overly burdensome government rules and regulations that strangle U.S. businesses under mountains of red tape and unnecessary paperwork. The result has been burdensome government rules and regulations that impede private-sector job creation, discourage innovation and entrepreneurial activity, and hurt economic growth and investment by needlessly raising prices. These regulations force businesses to spend time and energy doing paperwork to satisfy the demands of bureaucrats while increasing the cost of doing business and destroying jobs.

INFRASTRUCTURE

     America is burdened with an aging and inadequate infrastructure. “WHEN PRESIDENT TRUMP DECLARED, in his first speech to Congress, ‘The time has come for a new program of national rebuilding,’ the applause was long and loud. This pledge to spend what it takes to fix roads and bridges, rails and broadband, dams and airports – a staple of his campaign speeches – struck a chord with popular opinion. The legacy of past generations that sustained the world’s largest economy is aging and needs repair. . . . a recent poll for CNN found that 79% of Americans want the President to increase spending on infrastructure, including 72% of people who say they don’t support Donald Trump.” (Ref. 28)

     The time for delivering on the promise of repairing and modernizing America’s infrastructure is now. Supporters and opponents of Donald Trump uncharacteristically both agree on this. So, if not now, when? President Trump and the American Congress have the opportunity to agree on something and to move out fairly quickly. The question remains: Can Washington get its act together and do something that nearly everyone agrees needs to be done?

CONCLUSION

     President Donald Trump, along with the Republican majority in Congress have so far proven to be ineffective in instituting a few of their promised initiatives. The American people deserve better. The American people deserve to see a number of long-overdue, but well thought out, reforms enacted into law to replace badly misguided and detrimental laws and regulations that have cost this country trillions of dollars. The American people deserve to see a federal budget that is brought under control and a federal debt that begins to decline. Democrats can either get on board the reform train or get out of the way before it runs them over. But , the process of instituting the right reforms must get started now by President Trump and the Republican members of Congress. America does not want to see further delays nor any more false starts. The clock is ticking.

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