Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts

Tuesday, December 3, 2013

The Growth of the Administrative State



I had the good fortune and privilege of completing both the Constitution 101 and 102 courses, and the Federalist Papers through the Hillsdale College online course offerings. The professors, fellows and contributors to Hillsdale courses and publications are some of the very best historian and policy experts in our nation.

The following is an excerpt from the latest edition of Imprimis, a Hillsdale College publication. The article does a very good job of explaining where we are as a nation politically and how we arrived here with regard to our problem in the massive growth of the Federal Bureaucracy and centralization of power in Washington.


The article is detailed and lengthy – BUT completely worth the read. I highly recommend it!

Budget Battles and the Growth of the Administrative State

By John Marini

As seen in the recent government shutdown and the showdown over the debt limit—the latest in a long series of such crises in Washington—the federal budget stands at the heart of American politics. With few exceptions, the budget has formed the battleground between the political branches of the government—the executive and the legislative—in every administration since LBJ’s Great Society. That starting point is not a coincidence: The Great Society marked the beginning of an expansion of the federal government and a centralization of political and administrative power in Washington that had long been the domain of local and state governments. In addition to destroying the fabric of federalism, this centralization had the effect of undermining the separation of powers, making it difficult if not impossible for Congress, the president, and the bureaucracy to function amicably in pursuit of a national interest. What we have seen in subsequent decades is the steady expansion of a modern administrative state that is distinctively American in that it coexists with a limited government Constitution. (A coexistence that is becoming more and more dysfunctional).

In America, the administrative state traces its origins to the Progressive movement. Inspired by the theories of the German political philosopher Georg Wilhelm Friedrich Hegel, Progressives like Woodrow Wilson believed that the erection of the modern state marked an “end of History,” a point at which there is no longer any need for conflict over fundamental principles.

….  America’s Founders shared a radically different understanding, an understanding based not on history but on nature. James Madison wrote in The Federalist Papers that factionalism is “sown in the nature of man”; thus there will always be political conflict— which at its starkest is a conflict between justice, the highest human aspiration concerning politics, and its opposite, tyranny. This conflict between justice and tyranny occurs in every political order, the Founders believed, because it occurs in every human soul. It is human nature itself, therefore, that makes it necessary to place limits on the power of government.

Progressive leaders were openly hostile to the Constitution not only because it placed limits on government, but because it provided almost no role for the federal government in the area of administration. The separation of powers of government into three branches—the executive, the legislative, and the judicial—inhibited the creation of a unified will and made it impossible to establish a technical administrative apparatus to carry out that will. …

… Congress was initially reluctant to give presidents the authority to formulate budgets, partly because it infringed on Congress’s constitutional prerogative—but also because it was still understood at the time that the separation of powers stood as a barrier to tyranny and as a protection of individual freedom. Eventually, however, Congress’s resistance weakened.

… Thus the federal budget, understood as an instrument for fueling or defueling the growth of the administrative state, became the point of control over which the political parties and the political branches fell to fighting. In the 1980s, President Reagan showed that the budget process could be used to limit spending and reduce the burden of administrative regulations. But no one of either political party, including Reagan, has been able to achieve a consensus or a political realignment concerning the purposes and level of federal spending. For much of the last 50 years, an era in which divided government has become the norm, the federal budget process, with its taxing, spending, and regulatory authority, has become the focal point of the American administrative state—the place where political institutions and public bureaucracies accommodate the various interests and constituencies seeking a share of the national wealth. (Translation – special interests, lobbyist, corporate cronyism and corporate welfare).

… Over the last decade, Congress has not even been able to pass the 13 or so appropriations bills that constitute a budget. As a result, the ongoing use of Continuing Resolutions allows the bureaucracy to determine its own needs, free from detailed control by the legislative branch. In such circumstances, those supportive of the status quo—those in the bureaucracy, Congress, or the executive branch, who support the expansion of the administrative state—have become a faction on behalf of government itself.

… In an earlier time, there was widespread agreement that political institutions should tightly control government expenditures.  … This moral understanding of spending and debt receded with the growth of the administrative state, to the point where only the lack of resources seemed to call for any limit on public spending. And in the last few years, even that sense of limitation has fallen away, as supporters of the administrative state have found that printing or borrowing money, in the absence of political constraints, can fuel almost limitless demand for public resources on behalf of their constituencies. (i.e. – bring home some of that Federal Government pork).

… The political transformation of Congress that occurred in the decade following 1965 was the decisive event in this regard. That transformation has been so complete that it is difficult for us to remember today how Congress used to work, and what were the expectations concerning its role, prior to that period.

… In the course of this reorganization, individual congressional committees and members were empowered to oversee the various departments and agencies of the executive branch, making Congress—in the words of political scientist Morris Fiorina in 1977—the “keystone of the Washington establishment.” Under the Constitution, the separation of powers and the politics of federalism had inhibited Washington from achieving such centralization of power. Progressive intellectuals had criticized the Constitution and advanced the doctrine of the administrative state, and the New Deal had attempted to put Progressive theory into practice. But the administrative state was not institutionalized within the framework of American politics until Congress reorganized itself in the late 1960s and early ’70s, fundamentally altering the separation of powers and the federal system.

… Once the characteristic activity of the federal government became the regulation or administration of the details of the social, political, and economic life of the nation, organized special interests and their ties to the legislature and the bureaucracies were strengthened.

… The function of the judiciary was transformed as well: In the administrative state, the bureaucracy has no constitutional authority, but it is given enormous power by the political branches. Consequently, the courts have been required to enter the policymaking arena, as the final arbiters in the adjudication of cases arising in the administrative process.

… In summary, Congress has become a major player in the administrative state precisely by surrendering its constitutional purpose and ceasing to defend limited government. As a result, the administrative state has grown dramatically since 1965, and it only continues to defend and expand its turf. Political opposition occasionally arises in the White House or in Congress, but thus far with little effect.

… Despite its expansion under both parties, however, the administrative state has not attained legitimacy. The Constitution itself remains the source of authority for those in and out of government who oppose the administrative state, and a stumbling block to those who support it. Until either the administrative state or the Constitution is definitively delegitimized, the battle within both government and the electorate over the size and scope of the federal government— including government shutdowns and showdowns over the debt limit—will inevitably continue.


Ironic Quote regarding the Great Society!

"The purpose of the Economic Opportunity Act of 1964 is to offer opportunity, not an opiate. . . . We are not content to accept the endless growth of relief rolls or welfare rolls."--President Lyndon B. Johnson


Links, Sources & Resources




This book is an excellent intellectual guide to the remarkable things Lyndon Johnson did to change the institutional structure of American society. It explains the changing role of Congress in interfering in executive branch decisions. It explains the breakdown in respect for authority that led to mistrust of government as government was being entrusted with ever larger responsibilities. It provides new insights into the political and social thrust of Johnson's anti-poverty programs as they tried to reach around unresponsive state and local governments. And, especially, it explains - as others have never done - the depth of Lyndon Johnson's political, economic, social and cultural philosophies. A sometimes heavy work of intellectual study and inquiry, it is nevertheless well worth the effort for those who want to understand the political genius it takes to move American reform.

 

Tuesday, November 26, 2013

Progressives & Taxes - How much is enough? At what point will the government decide I've paid enough taxes?



A conversation on Taxes – Courtesy of my friend Mark Gott.

Okay, here is my question for progressives: How much is enough? At what point will the government decide I've paid enough taxes?







Currently, many of us already pay:

1) Income tax (13-28% depending on income).
2) Real estate taxes (generally thousands each year to support schools, police/fire which are all good things).
3) State income tax 8% in NC?? – (which I note will be reduced next year under McCrory & NC Legislature Tax Reform).
4) FICA 7.5% (which is a tax since there is no trust fund.
5) SALES tax in Mecklenburg County is near 10% if you add in State and County taxes together).
6) GAS tax of .37 per gallon.
7) Vehicle registrations and PERSONAL property taxes.
8) Capital Gains Tax (15% - 20%).
9) Landline Phone Tax.
10) Cell phone tax (some of the money goes to give free phones to others).
11) Cable TV Taxes (11% to 20% depending on locality).
12) Utility taxes on Gas, Electricity, and Water.
13) And NOW – Thanks to ObamaCare – taxes on a laundry list of over the counter drugs & Medical Devises.
14) – Introducing the All New & Improved Wealth Transfer Tax – AKA ObamaCare . That's right; the increases in Healthcare premiums from the ACA are certainly a tax; a FACT that the Obama Administration stated and argued in front of the Supreme Court in order to ensure the law would not be struck down as unconstitutional. They now  continue to lie to the American People by insisting it is not a tax.

Depending on what state you live in; the increase STRICTLY attributed to The Act ranges from 18% to 70% (the average nationwide will be 41%). SPECIAL NOTE – You will not receive anything more for that money. Your increased dollars will be diverted to pay for insurance for those who don’t have or earn enough money to get their own insurance.

A Subtext of TOTAL IRONY IS…
In 2012, younger voters overwhelmingly supported President Obama, while older voters backed Mitt Romney. Obamacare, in the average state, is a massive transfer of wealth from the young to the old.

So How Much do Americans Pay in Total Taxes? It's a bit of a moving target - but here is a solid real-life example.

Here is a pie-chart from an Online Tax Calculator. This is based on a married couple of 2 – with 2 children; living in Mecklenburg County, NC – total gross income of $92k and average utility bills, gas bills, cable TV, internet, gasoline purchases, medical expenses, groceries, monthly healthcare premiums of $1,200 (which is less than what my family pays by the way), etc.

Note – when you take into account an average mortgage in Mecklenburg County ($1,500) and their basic cost of living, including one car payment of $250 per month – there is less than 3% of their income left over each month to put in savings. There is no extra money for vacations or monthly entertainment expense.


In other words – the basic cost of living expenses combined with the taxes paid – leaves nothing left over for savings or family fun. $90k to $100k per year is now Lower-Middle Class.


In the meantime – we are running up National Debts we may never be able to pay back. Our current National Debt per person in the United States is - $54,296. That’s $ 54,296 for every man, woman and child currently living in the United States.

This doesn’t even begin to count the total unfunded Liabilities of the US that come in a whopping titanic $86.8 trillion liability from these programs? These are the currently and conservatively calculated future costs of all our Entitlement Programs.

Why haven't Americans heard about the titanic $86.8 trillion liability from these programs? One reason: The actual figures do not appear in black and white on any balance sheet. But it is possible to discover them. Included in the annual Medicare Trustees' report are separate actuarial estimates of the unfunded liability for Medicare Part A (the hospital portion), Part B (medical insurance) and Part D (prescription drug coverage).

As of the most recent Trustees' report in April, the net present value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion. (See Cox & Archer WSJ article linked below).

We are not edging toward a Socialist Economy – 
it is safe to say that we have already arrived there!


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