Chump Index

We are one nation. If a particular region is doing well we expect that region to help the rest of the nation. If oil & gas revenues are flowing in a particular region then we as a nation (partially) share in that bounty. Later when the oil & gas runs dry the rest of the nation reciprocates.

That’s the share-the-wealth concept behind municipal grants.

I earlier proposed a confederated tax scheme where states collect Federal taxes on behalf of their residents using alternate taxes. Individuals calculate their Federal taxes using the Federal tax code and the state pays the tax on behalf of their residents using, for example, a tax on oil & gas revenues.

Begs the question as to the appropriate Federal tax code under a confederated tax scheme. How should we collect Federal taxes so as to more equitably share-the-wealth, promoting the ‘one nation’ ideal?

The data may surprise you.

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Bolivia

The revolutionary and controversial Popular Participation Law – LPP (1994) was the most successful part of the neo-liberal reform strategy of President Gonzalo Sánchez de Lozada in Bolivia.

It decentralized government in a radical way, in a sincere way. It was a sharp break from the past. It doubled transfers to 20% of national revenues from the central government to municipalities. But much more importantly the allocation mechanism across municipalities switched from a highly idiosyncratic method to simple per capita calculation. No strings attached.

So a small town with a thousand people got 155,000 bolivianos the first year. La Paz with a million people got 155,000,000 bolivianos, and that was that. And the transparency and simplicity of that transfer led to genuine political reform.

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2014 Legislative Agenda

I promised myself I would step back and survey all my legislative proposals once I passed the magic number ten.

What I see is a surprising concession on my part to rely more heavily on Big Government; the essential need for judicial reform; a bias toward building more ‘competition’ into government practices; and a recurring call for constitutional overhaul. I was also surprised to see my political principles remained intact even though they were written well before I decided which policy issues to tackle.

Every generation has its prophets of doom. Luckily they’ve been wrong. But history shows eventually one of them will get it right. The beauty of the U.S. democracy is we often overcome impossible hurdles to forestall that doom. We have been known at times to enact transformative change. Like those I propose below.

Let’s roll.

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The Vote

In the summer of 1864 before the elections for his second term, President Lincoln wrote a memorandum , folded it so the writing was on the inside, and obliged his cabinet members to blindly affirm their acceptance of its contents by signing it on the outside.

This morning, as for some days past, it seems exceedingly probable that this Administration will not be re-elected. Then it will be my duty to so cooperate with the Government President elect, as to save the Union between the Election and the inauguration…

Lincoln had already trampled on the U.S. Constitution as an expedient of war (e.g., his suspension of habeas corpus). He could just as easily have delayed the election. This memorandum affirmed Lincoln’s belief that the vote must go on and that he and his cabinet members would whole-heartedly support the next president. For Lincoln the vote was the ultimate guarantor of liberty, the best protection against tyranny.

Humanity has struggled for centuries and sacrificed many lives to achieve universal suffrage, to condition its leaders and the leaded to internalize this concept as a sacrosanct principle. And now look how we waste it!

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The Antonine Dynasty

Today’s federalist nations share the business of government differently between central and local levels (e.g., The U.S., Canada, Australia). Why not follow the template of the Antonine Dynasty of the Roman Empire (96–192)? In that very successful reign the central government was responsible for defense, common currency and foreign affairs. States were responsible for everything else. Religion, the arts, business, morals, infrastructure and all other government business were financed and administered at the state level. This is an historical simplification, obviously, but the reach of Roman central government was much reduced over what is common in all modern federalist nations.

What has changed in 2,000 years to justify the vast expansion of the central government’s share?

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