Wednesday, November 19, 2008

A modest proposal to our governors, from 18 years ago

Back when I was living in Albuquerque many moons ago, I sent this modest proposal letter around to the 50 governors then serving.

I got two responses. The first from the Governor of Colorado, just up the road. He put me in touch with his Secretary of Health & Human Services, if I recall correctly. And we had an interesting discussion.

The second was from the Governor of Delaware. He wrote me a short letter and pointed out that if this proposal were to be enacted, it would deprive the federal government of personal income tax revenues and would thus, in turn, jeopardize the federal revenue-sharing funds that flow back to the states from the Federal government.

What I had apparently not made clear enough was (and is) that the state would make up for this shortfall by increasing corporate licensing fees, transaction fees for investments, property taxes, and so on. But not on personal income--because there'd be hardly any to speak of.

In other words, one of the goals of this proposal is to essentially stop the flow of money out of the states and into the federal coffers, where neither states nor citizens have any effective control over how that money is spent.

Yes, there are the important entitlement programs, Medicare and Social Security. These will have to be dealt with. And so will our corporate welfare, or oligarchic corporate socialism, need to be addressed. However, when "every person is a corporation, too," (an ineluctable concomitant of the Supremes' holding in Untied Citizens vs. the Federal Elections Commission last year (2010), then everyone--no just the corporate CEOs and the rest of the 0.01% of our richest corporate socialists, but everyone--can feed at the corporate trough.

Yes, there are states (like Alaska, as we learned in the 2008 election), that receive far more in federal dollars than the businesses and citizens of the state pay into the federal government. About the time I was writing this letter, I think New Mexico got the highest "return" funds, something like $3 for every $1 sent Washingtonward. But most of that money was coming back to support Sandia National Labs, Los Alamos National Labs, the nuclear weapons storage facility, White Sands, the Large Array radio telescope, and so on. (Oooh, I shouldn't forget Area 51, should I?)

And the "federal revenue sharing" most certainly was not flowing into the hands of First Americans on their desolate reservations--the Comanche, Navajo, Zuni, Pueblo....(check out alll these....

Northeast Albuquerque
New Mexico 87111-4526
Sun, Mar 22, 1992
The «salutation» «1stName» «middleInitial» «lastName»«line»
«title» of the «fullStateName»
«city», «st» «zip»
Dear Governor «ln»:

You could think of this as a suggestion for a significant, lucrative Family Federal Aid Program for your «fullState» which requires only state legislative action, reversing the example of Federal entitlements programs which are enacted in Washington, but are paid for by your state.

Here’s what you do: In a suite of legislation that declares the business of the «fullState» to be raising, nurturing, training & supporting capable, creative, productive businesspeople (who then, and only then, set up or work in other productive businesses), set up a Family Corporations Law, either out of whole new cloth, or amend your current Domestic or Business Corporations Law to encompass this new “business purpose”.

Let the new or amended law declare and provide:

• That all families now and hereafter are Family Corporations in the «fullState».

• That marriage automatically creates the Family Corporation, but that any individual or group of individuals may also form a Family Corporation.

• That all “traditional” employers or institutions or entities paying sums of money to a member of such corporation must change their records to pay those sums to the Family Corporation, instead of to the individuals. This would end individual income tax & withholding on those sums.

As Family Corporations engaged in the business of raising and caring for businesspeople, all the necessary expenses of food, clothing, shelter, education, transportation, communication, etc. are, of course, business expenses. (The «fullState» could begin to charge for such services as are actually rendered.)

The Federal government would of course tax the profits of the Family Corporation (as could the «fullState»), which would amount to what families now put into savings. Your «fullState» would maintain its revenue stream by tinkering with such things as corporate franchise fees. Most of the personal income tax saved by your state’s new Family Corporations would be spent in your state, benefitting your economy. Treatment of all corporations, whether “Family Business” or those existing before the Family Corporations Act, could be uniform (property tax “incentives” for traditional businesses and aid to family corporations with dependent children would then uniformly be called “corporate welfare”).

There would effectively be a national flat tax, the corporate tax.

Your state legislation should be protected by the Tenth Amendment from Federal attack.
The further the success of such Family Corporations, you’d want to add mandatory curricula in the schools in Running a Family Corporation, Family Accounting, Family Education (older family members as teachers of the younger corporate members), as well as Family Health, etc.

You could also wrap the concept in as many reams of written (or spoken) rhetoric as you wished, stating that without healthy, happy, capable, creative businesspeople, no business (of any kind) or state can long survive, etc., particularly as so much has been made in the past two decades of the plight of the American Family and yet so little has been done to ameliorate it.

Bill Wilt