By ERNEST F. HOLLINGS, former U. S. senator
2011 -- Announcing for President, Governor Rick Perry promised: "I'll
work every day to make Washington as inconsequential in your life as I
can." He'll have a hard time making Washington more inconsequential.
does nothing but campaign for contributions for reelection. With breaks
every month to hit the trail for money, the Senate loves filibusters.
One Senator on either side of the aisle holds the floor while the rest
of the Senators go to California or New York to raise money. Surrounded
by lobbyists, there are fundraisers morning, noon and night in Washington.
In fact, the leaders no longer control -- the lobbyists control. Lobbyists
can tell you when the Senate will have a vote and usually the outcome
before the vote. Lobbyists like Grover Norquist constantly counsel against
votes that will hurt your reelection. As a result, the Senate has had
less votes this year than ever. Nothing gets done.
is nothing more than a war for the economy, with production looking for
a country cheaper to produce. Each country competes vigorously in this
war for innovation, research, technology, development, production and
jobs, each building its economy - except the United States. President
Obama stays bogged down in the hot wars, totally ignoring the cold or
economy war. The President could easily recover by transferring the subsidy
the U. S. gives to off-shore jobs and giving it to on-shore jobs: cancel
the corporate income tax and replace it with a 6% value added tax. The
VAT is easily implemented and administered with computers. 140 countries
compete in globalization with a VAT and don't find it regressive or "a
money machine." The VAT is rebated on exports, but the income tax
is not rebated. With a VAT, the more you consume, the more you pay; the
less you consume, the less you pay. The poor that must consume for food,
health and housing, are given exemptions from the VAT. Last year, the
corporate tax produced $194.1 billion in revenues. A 2010 VAT would have
produced $700 billion. $70 billion exemptions for the poor, still leaves
$630 billion to pay down the debt. Spending cuts can produce more to pay
down the debt. The VAT promotes exports, creating jobs. With the corporate
tax cancelled, Corporate America can invest its $1.2 trillion in off-shore
profits to create millions of jobs in the United States. Since there are
no loopholes in a VAT, we have instant tax reform. Since the VAT is self-enforcing,
we can eliminate much of the Internal Revenue Service or cut the size
of government. Since the average corporate tax is 23%, replacing it with
a 6% VAT cuts taxes. So this tax cut stops the hemorrhaging of our economy
off-shore, provides billions to pay down the debt, creates millions of
jobs, and cuts the size of government.
Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of the recently published book, Making Government Work (University of South Carolina Press, 2008).
© 2011, Ernest F. Hollings. All rights reserved. Contact us for republication permission.
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