Welcome to the May Housing/Real Estate issue of NorthBay biz magazine. One cover theme you’re sure to see again next year is Housing and Real Estate. The reason is straightforward—housing is inextricably linked to jobs, and both are critical to the vitality of our region.
Inside, in addition to all the stories, there’s also a Special Report on education, plus more than a dozen local columns and special features—information about local business that’s unavailable anywhere else. We welcome your comments and ideas on how NorthBay biz, the area’s only glossy, locally owned business publication, can best serve the needs of the North Bay’s business community.
The March unemployment report came out today and the headlines trumpeted, “National unemployment rate drops to 7.6 percent.” Wow, I thought, what great news. Then I made the mistake of reading past the headline and discovered—buried near the end of the story—the rest of the story: 630,000 people dropped out of the workforce last month—stopped looking for a job. New jobs created in March: 88,000 (about one-third the number expected). Once the government determines you’ve stopped looking for work, you’re no longer counted in calculating the unemployment rate. Neat trick, isn’t it? Currently, there are now almost 90 million Americans without work. At some point, isn’t it reasonable to expect the media to begin connecting the dots? Instead of hiding the truth behind misleading headlines, how about suggesting the destruction of the workforce is the result of policies that promote government dependence? Maybe there’s a secret plan with historical overtones. Maybe the goal is to become the first country to record a 0 percent unemployment rate.
Facilitating these policies is increasing taxes and monumental debt. What government can’t pry out of your pocket it simply makes up for by printing more money. Liquidity created out of thin air—devaluing the currency and thereby reducing everyone’s wealth. All this being done to fund an ideology that, stated in its simplest terms, is government knows best and therefore bigger government is omnipotent. It seems you can’t be trusted to know what’s best for you and your family. Only our wise, benevolent superiors are capable of understanding all the complexities of modern life. So we’re told to ignore the billions/trillions being wasted on wishful green energy projects, incredibly abused and duplicative welfare, feel-good programs and giveaways to every conceivable special interest group that grows fat at the public trough. These policies are in our best interest. It has nothing to do with government grabbing more power. As these policies have gathered steam and grown over the past several years, the private sector, the authentic engine of growth and prosperity, has grown smaller. As government grows—regulating, taxing and spending more—the people of the country are diminished. Debt reduction and spending cuts are always promised in the “out years” and never really materialize, while tax increases are effective immediately or, in some cases, like here in California, retroactive. It’s time for a smaller government and bigger people.
The country’s malaise is dangerous. How long can we continue to teeter on the cliff without falling over? We keep applying the same solutions to all the same problems and expecting a different result. Spending more money you don’t have isn’t going to change anything, except make the hole bigger. You know the drill. We’ve lived through it—bursting bubbles, unprecedented bailouts, government takeovers of entire private sector industries, debilitating unemployment, higher taxes, more takers and less makers of a shrinking pie.
We need a new strategy to break us out of this cycle. What we need is a game changing idea—an idea so significant it would necessarily impact everyone’s personal and business life.
How about a plan that lets every working American take home 100 percent of his or her paycheck every payday? What about a proposal that guarantees every family pays nothing to the government until its basic needs are paid for? What do you think would happen to the economy if capital and labor weren’t taxed at any level? And what if I told you this plan accomplishes all this and much more without raising the price of consumer goods or cutting government spending? This plan is called The FairTax. (I love the name, as the phrase “it’s only fair” has been used so often to justify redistributing wealth and so on that it’s “only fair” that this time it’s the name of a tax plan that truly lives up to its name.) The FairTax plan was developed over several years by economists, accountants, business people and tax experts using $22 million in donated funds to turn it into the most researched piece of legislation ever put before Congress.
The easiest way to define the distinction between our current tax system and the FairTax is to say instead of taxing what you earn you only pay tax on what you spend. No deduction for federal income tax, Social Security or Medicare. Instead, the government and the entitlements are financed by a 23 percent national sales tax. And The FairTax is a revenue-neutral proposal. Adoption of this plan would provide a massive dose of adrenaline to our economy. It would be the largest business and jobs magnet in the world. Manufacturing, which has been in a swoon for more than 30 years, would blossom as corporations from around the world would rush to relocate here and as American companies that have moved operations offshore would be repatriated. One expert forecast that, if the FairTax was made law, the economy would grow by 10.5 percent, exports would increase 26 percent and capital spending would grow by 70 percent. And that’s in the first year.
The best benefit of this new tax system is that it’ll make government smaller as it transfers power back to the people where it belongs. More next month on the FairTax.
That’s it for now. Enjoy this month’s magazine.
