Cato Daily Dispatch for October 14, 2003
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Lieberman Proposes Tax Hikes for WealthyRumsfeld Eyes Base Closings
Saudi Arabia's Tiny Step Toward Democracy
Lieberman Proposes Tax Hikes for Wealthy
"Sen. Joseph I. Lieberman (D-Conn.) proposed raising taxes on wealthy Americans to pay for a reduction in income tax rates for millions of others as part of a broader shift in tone and tactics in his campaign for the Democratic presidential nomination," The Washington Post reports.
"Lieberman, who has positioned himself as the most conservative of the nine seeking the Democratic nod, called Monday for a 5 percent 'surtax' on married couples with adjusted gross incomes of about $250,000 or more."
In "Simplifying Federal Taxes: The Advantages of Consumption-Based Taxation", Chris Edwards, Cato's director of fiscal policy studies, suggests that taxing income is the worst way government can go about collecting revenue. He writes that "the tax system is caught in a spiral of continual change and nonstop growth in rules. Since the mid-1980s there have been 7,000 federal tax code changes and a 74 percent increase in the number of pages of tax rules. Complying with federal tax requirements wastes 6 billion hours each year as families and businesses fill out tax forms, keep records, and learn tax rules.
"The complexity and inefficiency of the individual and corporate income taxes have led to great interest in replacing them with a consumption-based tax. The leading consumption-based tax proposals, including the national retail sales tax... could dramatically simplify federal taxation. Those tax systems would eliminate many of the most complex aspects of federal taxation, including depreciation accounting and capital gains taxation.
Rumsfeld Eyes Base Closings
"Defense Secretary Donald Rumsfeld is planning to cut at least 100 of the nation's 425 military bases - more closures than in the four previous rounds of base closures combined - beginning in 2005, Pentagon insiders said Monday," The Los Angeles Times reports.
"Rumsfeld is expected to submit to the congressional Base Closure and Realignment Commission a plan to shutter as many as one-third of Army bases, one-quarter of Air Force bases and a smaller percentage of Marine Corps and Navy bases, a senior defense official said on the condition of anonymity."
In a Policy Analysis, "Empty Promises: Why the Bush administration's Half-Hearted Attempts at Defense Reform Have Failed", Cato adjunct scholar David Isenberg and former director of defense policy studies Ivan Eland urge the administration to drastically reform the military to prepare it for the challenges of the 21st century.
"The events of September 11 should have been a wake-up call for transforming U.S. defense planning," Isenberg and Eland write. "After September 11 and the war in Afghanistan, President Bush had the opportunity to use his prestige and high public approval ratings, as well as renewed public interest in national security issues, to resuscitate his defense reform agenda. Instead, the president took the easy way out, asking for the largest increase in defense spending since the military buildup during the Reagan administration.
"Merely throwing money at a bureaucracy whose efficiency even Secretary Rumsfeld compares to Soviet central planning effectively kills any chance of transforming the way the Pentagon will fight future wars," they write. Among other recommendations, the authors conclude that the forces of each service "must be trimmed and restructured" and that resulting savings "be reallocated to fund neglected areas and futuristic technologies."
Saudi Arabia's Tiny Step Toward Democracy
According to The Financial Times "Saudi Arabia yesterday made its first, limited concession towards representative democracy, announcing that half of the members of municipal councils will be appointed through elections.
"The Saudi Press Agency said the announcement was aimed at 'widening popular participation and confirming the country's progress towards political and administrative reform.'"
In "Gambling with History: Bringing Democracy to the Middle East", Patrick Basham, senior fellow at Cato's Center for Representative Democracy, writes that "a liberal democracy requires three things: a system of representative government; a framework of liberal political norms and values; and social and institutional pluralism. Hypothetical support for representative government, absent tangible support for liberal political norms and values, and without the foundation of a pluralistic civil society, provides neither sufficient stimulus nor staying power for democracy to take root.
"Today, the Middle East lacks the conditions, such as a democratic political history, high standards of living, and high literacy rates, which stimulated democratic change in, for example, central Europe and East Asia."
Christopher Kilmer, editor, ckilmer@cato.org
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