A Citizen's 2% Solution

How to Repeal Investment Income Taxes, Avoid a Value-Added Tax, and Still Balance the Budget

Let’s Abolish Spin

I’d like to start a crusade to return honesty to public discourse.  Is anyone interested in joining? 

Here’s my premise:  It is exceptionally rare for good decisions to arise from bad facts or shoddy reasoning.  So why don’t we try to stamp out “spin”.  Spin is, of course, simply a polite word for willfully distorting the facts: torturing logic to obscure sound interpretation and balanced assessment of circumstances, causes, effects and implications.   The ability to “spin” facts is also, much to our detriment, our most highly valued political talent.  How did that come to be? 

In a logical and rational world, one would expect obvious practitioners of spin to be shunned and despised.  In American political circles “spin doctors” are highly praised and compensated. 

H L Mencken claimed no one ever lost money, or public office, by underestimating the intelligence of the public.  But America is heading toward financial Armageddon, at least in part, because our leadership doesn’t trust or respect the intelligence of our citizenry.  Our leadership distorts reality, often using gross misrepresentations of the facts to shape public opinion, because they simply don’t trust the public.  In fairness, for some I’m sure it is the result of wishful thinking and self-delusion, not willful deception.   But the persistent manipulation and distortion of facts, and broad acceptance of the practice, has done enormous damage to the quality of our public discourse. 

The competition of allegations between politicians and pundits, telling people what they want to hear and building arguments in support of pre-determined dogmatic opinions, has become so prevalent that avoiding difficult judgments and choices has become a simple process.  All one has to do to justify an opinion is pick a different source from which to cite facts.  It is human nature to sort new facts into one’s existing view of the world.  But it is an abdication of responsibility when our political leadership and media stop applying intellectual rigor to the challenges that threaten our future. 

Today we are engaged in a critical debate over the fiscal profligacy and dysfunction of our tax and budget policies.  We allow that debate to be framed by the allegation that “nearly half the public pays no taxes”.  When crafted with care, specifically defining “income taxes”, that allegation is semantically accurate.  But in substance, it is demonstrably false.  Our federal government collects more employment taxes than income taxes.  Inclusive of employment taxes, the working middle class pays higher marginal tax rates than the most affluent and privileged among us.  Warren Buffett and his billionaire peers pay tax rates half as high as their office staff.  Our leadership pretends we have progressive tax policies and argues vociferously over relatively minor changes in the income tax rates.  But our progressive rates apply to less than 25% of the overall federal/state/local tax burden and unless we fundamentally change the structure we use to tax investment returns changing those personal income tax rates will not make a significant dent in the preferential treatment now extended to holders of accumulated wealth.  Yet a large portion of the population argues against their own principles of equal treatment and their personal self-interest, because we distort the facts upon which we conduct our debate.   

Nearly thirty years of experience in crisis management and business workouts suggests to me that when disputing parties don’t share a common knowledge and understanding of the facts, compromise is extraordinarily difficult and productive agreement is functionally impossible.  So why do we allow politics to be conducted in a fact free zone?  Why are we surprised that politicians can’t agree on a course of action when we know they habitually cite conflicting, irreconcilable “facts” – and we allow them to do so largely unchallenged.  

So join me in calling for the abolishment of “spin”.  Encourage our political class and media to stop deliberately twisting the facts to fit their theories; demand they test and reconcile their theories against objective reality.  Will we still have disagreements about the facts and implications of our circumstances?  Of course we will.  But if we start by honestly debating the facts, simple things like, “Who hands a higher proportion of their income and wealth over to the government each year?” and “Does deferring taxes on unrealized gains stimulate investment, or obstruct fluid capital reallocations to more productive uses?”, then maybe we could make some progress on the critical challenges that confront us. 

Our representative government is becoming increasingly dysfunctional; largely because we ignore or distort inconvenient facts.  Public debate, that examines the pros and cons of alternative positions and cooperatively works through the issues, is fundamental to the democratic process.  But surely, a commonsense minimum requirement of that process is to demand a more honest and objective discussion of the facts upon which those debates and decisions rely. 

Douglas Hopkins Author – A Citizen’s 2% Solution: How to Repeal Investment Income Taxes, Avoid a Value-Added Tax, and Still Balance the Budget. ISBN 978-0-9828328-0-6

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