WASHINGTON – There are many good, creative policy ideas floating around on the right, on everything from higher ed reform and entitlement reform to alternatives to Obamacare. Here, however, are six really bad ones that should be dumped:
A value-added tax (VAT)
Neither Sen. Ted Cruz, R-Texas, nor Sen. Rand Paul, R-Kentucky, will call it that, but both would adopt it without abandoning the income tax. Conservatives have long warned against going down this road. Ramesh Ponnuru explains:
“When Paul talks about his plan, he says that he would get rid of the payroll tax and that this would be a big tax cut for workers. He does not mention that much of this tax cut would be taken away by his VAT. A higher income-tax rate would make it harder for him to present his plan as favorably. (Similarly, Cruz would not be able to say that he exempts people making less than $36,000 from taxes if the VAT were visible.) But that strikes me as a bad thing: We should not hide the realities of a tax plan from voters.”
Add to that problems of regressivity and the negative impact on wages, and you have a bundle of reasons not to adopt a VAT. And, of course, you don’t “get rid of the IRS” with an income tax and a new VAT.
Returning to the gold standard
What problem are we trying to solve here? The dollar is at all-time highs against other currencies, and inflation is virtually nonexistent.
A balanced budget amendment
Until someone explains why a balanced budget with an expanding long-term debt is good policy, we should stop talking about it. Moreover, unless there is a credible plan for reducing spending or newfound willingness to raise taxes, a constitutional change won’t magically solve our problem. And, of course, getting an amendment passed is virtually impossible.
Auditing the Fed
What exactly would we be auditing for? What legislation do we suspect the Fed to be violating? Do we think it is stealing from the Treasury or fixing rates to benefit its friends?
“Audit the Fed” is an empty phrase that serves as a dog-whistle to the conspiracy-minded right. Moreover, if you want to make the Fed more political, then have congressional investigators snoop around and allow grandstanding hearings and micromanaging by 535 lawmakers.
Defeating the Trans-Pacific Partnership
Michael Boskin explains, “Expanded trade leads to higher growth in income, greater efficiency and lower costs and increased variety for consumers. In addition to eliminating many tariffs, the TPP will, if ratified and implemented by the parties with minimal slippage, reduce non-tariff barriers such as excessive red tape and protection of state-owned enterprises; harmonize policies and procedures; and include dispute settlement mechanisms.
“On balance, that should enable American firms and their workers to expand exports to these markets. California firms and workers, in particular, stand to benefit disproportionally, given the central role the state plays in trade with Asia, from goods and services we export to the flow of goods through our ports.”
As a geopolitical matter, it is essential for us to provide diplomatic and economic support to allies and to make China pay a price for its regional aggression.
Unless you want to join Donald Trump in rounding up millions of people or to just accept the current lack of enforcement of immigration laws, we will at some point have to regularize those people who are here illegally. The terms under which that would be done and the timing are open to debate, but physically uprooting people and shipping millions of consumers, workers and taxpayers out of the country is a recipe for social and economic disaster.
On this one, former Florida governor Jeb Bush and Ohio Gov. John Kasich had it right. It’s a fantasy to think mass deportation or self-deportation could be accomplished, and it is really bad policy and even worse politics to try.
Trudy Rubin writes the Right Turn blog for The Washington Post, offering reported opinion from a conservative perspective.