Economist Colors 2012 Purple with Third-Party White House Bid
“It’s the economy, stupid,” rang the famous words of Democratic strategist James Carville in the 1992 presidential election, a phrase often echoed through these past years of recession.
Then, argues one third-party presidential hopeful, why not elect an economist to the Oval Office?
Laurence Kotlikoff, a professor at Boston University and a onetime senior economist on President Reagan’s Council of Economic Advisors, is angling for the nomination of the Americans Elect party. To get there, he first needs 50,000 support clicks at the new party’s website to qualify for the online primary.
Kotlikoff said that will be a “hurdle,” but “I think I’m the only who is really serious in terms of having plans to fix the country.”
And in an ode to his mantra that he’s not about party affiliation, he’s offering the Purple Plans to get the economy back on track.
“They’re all simple plans,” Kotlikoff said. “Some of them have been endorsed by large numbers of very prominent people.” They’ve also been in the making long before he threw his hat into the 2012 ring, involving “decades” of thought, number-crunching, and discussions with other economists, he added.
For example, his Purple Tax Plan replaces the federal personal and corporate income taxes as well as the estate and gift tax with a broad-based, low-rate, progressive consumption tax and a low-rate, progressive inheritance tax. It nixes annual tax returns and includes a monthly payment, based on household size, to ensure that those living at or below the poverty line pay no tax, on net, on their consumption. The sales tax rate would be 17.5 percent, with 15 cents of every dollar going toward taxes and 85 cents for consumption.
In a “Win the Future,” “America Built to Last” campaign season, Kotlikoff said his slogan — and the basis of his platform — is “Our Kids are Us.”
“The country’s essentially bankrupt at this point,” he said. “The most important thing to the public is their kids.”
His Purple Plans extend to the financial sector, Social Security, energy, “generational balance,” and health care — providing universal coverage and turning Medicare into a voucher-based system.
“Politicians have left our kids with a terrible fiscal problem,” Kotlikoff said. “They don’t seem to understand how to fix things. They seem to know how to make things worse.”
Even worse than EU bailout icon Greece, he argued, when you take into account future obligations such as entitlements and defense spending as total debt.
Kotlikoff faces a challenge from former Louisiana Gov. Buddy Roemer, a campaign-finance reform advocate who abandoned his quest for the Republican Party nomination last week and turned his hopes to an Americans Elect ticket.
“That’s great,” Kotlikoff said, noting that Roemer’s entrenched social-media effort will help drive people to the Americans Elect site. “I’ll be happy to debate him.”
While calling his economic background “a plus” in today’s climate, Kotlikoff said, “unlike Buddy Roemer, I’m not a one-issue candidate; I can focus on more than one thing at once.”
He plans on beefing up his ticket with an as-yet unnamed “former top-ranking member of the military” as vice president, something he hopes to line up by next week.
“If that happens, I think we’ll have a really strong domestic and foreign policy team,” he said.
Not that Kotlikoff comes without his own foreign policy views. He pans “nation-building” efforts such as in Iraq and Afghanistan as “not to our advantage” — “I wouldn’t get us involved in a ground war,” he said — and thinks “all the China-bashing that’s going on” will only be counterproductive in economic relations.
On Iran, he said the global community needs to act quickly if the Islamic Republic is on track to build a nuclear weapon within a year — not enough time, he believes, for economic sanctions to work.
“If this is a country that’s being run by fanatics, which it seems to be, then we have no alternative” other than military action, he said.
“I think it’s a big mistake when an American president says they’re going to do something and prevent something and they don’t do it,” Kotlikoff said of the Obama administration’s stance on Iran.
On climate change, he pans Solyndra-style endeavors but said there is “enough evidence to suggest” that we can’t take a risk and ignore global warming.
“If there’s a decent-size chance that it is happening, risking terrible outcomes, we have to pay serious attention and deal with it” by means including a carbon tax, the economist said.
He would also stock his cabinet with people from a wide range of experience and wide range of political viewpoints.
“The point of this campaign is to bring people together, so I would have people in my cabinet from both parties,” he said.
Some examples of Kotlikoff’s dream team: “brilliant economist” Jeffrey Sachs as either U.S. ambassador to the United Nations or secretary of State, Dennis Ross, Rep. Paul Ryan (R-Wisc.) as budget director (“someone I greatly respect”), or Mervyn King, governor of the Bank of England, as Treasury secretary.
“I wouldn’t hesitate [on possibly] hiring people from abroad,” he said. “They would have to be on board with the policy proposals.”
People working for Obama, he said, “seem to have some old-time Keynesian views.”
Kotlikoff’s Supreme Court picks would have to have no political background or ties, he stressed. “Politics and justice have very little connection,” he added.
While eyeing apolitical means to try to fix the country’s problems, Kotlikoff also doesn’t place himself in a political corner.
“Part of me is very libertarian, part of me is very liberal,” he said. “They come together on certain issues.”
Instead of rallying against government, he advocates “efficient government.”
“The other aspect of where I’m coming from is as an economist,” he said. “I understand that we need government to run certain things. Getting rid of government involvement in health care, for example, is not the answer. Ignoring our energy problem is not the answer.”
The answer, he contends, is a presidential candidate who’s not necessarily the best at soundbites or is a great debater, but can offer “bold new leadership to fix America.”
“[Voters] need to consider someone who’s a grown-up to start with,” Kotlikoff said. “We don’t have any clear grown-ups on either side.”
PJ Media Disclosure: Laurence J. Kotlikoff has provided consulting services to PJ Media, LLC in the areas of economics and personal financial planning. PJ Media also markets selected personal financial planning applications that have been created by a company, Economics Security Planning, Inc., of which Laurence Kotlikoff is the president.
Sounds like a VAT to me. Ugh.
Indeed it does. And his knee-jerk opinion on AGW means Mr. Kotlikoff – or is it Dr. – has not been following the latest developments in the science. Why on Earth do academics think they are qualified to run for President? Oh, narcissism!
I’d be cool with a VAT or other consumption tax, but ONLY if the repeal of the 16th Amendment is part of the deal. If we add a consumption tax without driving a stake through the heart of the income tax, then it’s just a game to raise the overall rate of taxation to unacceptable levels (like the AMT).
No it is not a VAT.
A VAT is a tax levied against producers of products. It is applied all along the production process and involves a lot of accounting effort. It is paid by producers who then pass it along to the final consumer. The consumer has no idea what the total tax is.
This is a sales tax and you will know what your tax bill is when you pay it.
It’s Not the Tax that is OUR problem – It is THEIR* spending.
*You know the elected people/citizens/politicians/liberal/conservative/and to be fair – conservative/liberal – ETC./ETC.
A Ron Paul surrogate for adherents of the Church of Climatology. Their political esotericism is a grave part of the problem.
Lots more akin to Newt than Paul.
squish
Any time I hear a political aspirant say he wants to “bring people together,” I put one hand on my wallet and the other on my gun.
In short, he wants to run the U.S. economy sort of the way the Labourites and Tories run the UK economy.
The only problem with that is, as the UK’s finance minister pointed out just the other day, that the UK is broke.
In fact, his ideas are a reversion to some of FDR & Co.’s worst ones. All that’s missing is the National Recovery Act and massive public works programs.
Never mind his Reagan-era credentials. What we have here is an economist who is a believer in the interventionist school of “good government” in economics. That is, the school that consistently flunks the final exam- the one outside the academy.
Nostalgia for failed top-down government models doesn’t make them any more effective than they were the last time they were attempted.
What will he do for an encore, reintroduce the Technocracy movement?
clear ether
eon
“his Purple Tax Plan replaces the federal personal and corporate income taxes as well as the estate and gift tax with a broad-based, low-rate, progressive consumption tax and a low-rate, progressive inheritance tax.”
It’s a VAT tax. And the sad thing about VAT taxes is that they only go up, never down. And to keep paying for our big, bloated, and ever growing Federal Government, you may need an income tax AND a VAT tax, which would really turn us into a European-style socialist welfare state. And they don’t seem to be doing so well now, especially in Greece. So this is his big plan?
“The country’s essentially bankrupt at this point”
This does not matter, until the US dollar loses reserve currency status (which is ongoing as we speak), then it will matter, ALOT.
We spend over 40% MORE than we earn, unless the proposals include putting at least 2 Federal Departments through the woodchipper (Homeland and Education/Energy/Housing) then we are just pissing in the wind.
As for economists, there track record predicting events does not inspire me with confidence.
“(Homeland and Education/Energy/Housing)” That’s a good start. I’d add the EPA, welfare, farm subsidies, congressional pork of any kind, and ween the government out of, and away from, any form of nation building abroad. First and foremost would be getting the UN off our payroll and discontinuing support of all non-friendlies. Pakistan comes immediately to mind.
Government needs to do only three things, 1) defend our borders, 2) enforce the Constitution, and: 3) deliver the mail on time, so far it’s failed in every task.
Only three things? I’ll think about that the next time I drive on a paved road, buy food I am reasonably sure is safe, or talk to my child’s teacher. The first thing that needs fixing in America is our fascination with sound bite solutions for complex problems. The professor may not have everything right, but at least he’s was thinking carefully. He loses me when he wants an apolitical solution. Let’s be realistic here, America needs a forceful leader who can control his own party and hog-tie the opposition. That was the beauty of Reagan and it is the major failing of Obama.
Perhaps he should have said FEDERAL government. All the things you list should be in the purview of state and/or local governments, not the feds.
I agree with your distaste for soundbite solution, like “shovel ready jobs” that cost us 800 billion dollars,and how many pot holes got filled?
FLAT TAX!! Remove the politicians ability to raise taxes or adjust the code in any way to a 2/3 vote.
Then get out the wood chipper!!
Is that a statist I see there before me?
If an economist can’t sell his ideas to either the Dem or GOP parties, then he and his ideas are irrelevant to the future of the nation.
He can give nice talks televised on C-SPAN, and nice interviews for major newspapers. And that’s all.
Blame the spineless, self-satisfied Country Club Repubs.
Not one of them ever offers simple solutions such as:
Eliminate the miniumum wage.
Outlaw collective bargaining by Civil Services.
Abolish whole departments, fire the beaurorats and sunset their regulations.
Start to throw out the tax code piecemeal, dumping all the gimmies.
Eliminate loans to individuals (e.g., students) and grants to anybody.
Put foreign aid on a profitability test.
I read with considerable interest right up to the point where Kotlikoff endorsed a carbon taxing scheme.
Have a nice day and thank you for coming out today Mr. Kotlikoff.
Next!
He is the US version of a European technocrat.
We have seen how one professor has run the US for three years now. We don’t need another teaching moment, to apply some pie in the sky hypothesis.
Universal health care, carbon tax, progressive inheritance tax, consumption tax, blah, blah, blah. All of this administered by a panel of masterminds. Is that about right? What a way to start this Monday morning. Massachusetts will probably furnish this clown the needed 50,000 signatures. Run there for governor, sir.…….and stay the hell away from the rest of us!
BS!
“For example, his Purple Tax Plan replaces the federal personal and corporate income taxes as well as the estate and gift tax with a broad-based, low-rate, progressive consumption tax and a low-rate, progressive inheritance tax. It nixes annual tax returns and includes a monthly payment, based on household size, to ensure that those living at or below the poverty line pay no tax, on net, on their consumption. The sales tax rate would be 17.5 percent, with 15 cents of every dollar going toward taxes and 85 cents for consumption.”
This is the kind of BS only technocrats/economist -but devoid of any ethics, can come up with.
This is the Fair Tax modified by adding an inheritance tax and using the proceeds to lower the rate.
This is no time to have anyone talking about third-party plans. It is of the essence that Obama be voted out this fall; the presence of a third-party candidate will assure him a second term. Not a good thing, to say the very least.
Nominating ANYone but Ron Paul ensures that Obama gets a second term. The other three “peas in a pod” candidates are big-spending, big-taxing war-hawks abroad and welfare-hawks at home; we’ve had enough status quo to last for a lifetime, let’s vote for real change.
With all due respect to Professor Kotlikoff, the very last thing we need is yet another big university economics PhD lecturing us on what’s wrong and how to fix it. Advice and decisions made by economists have been instrumental in creating our current mess in the first place.
Further: I know BU very well indeed (I am about 1/2 a mile away at the moment, and went to school there years ago) – they are, in their own way, just as “elitist arrogant” as any Harvard Prof., and mostly all sway very far to the Left indeed.
I like the 17.5% VAT, particularly when you add the 10% local sales tax rate to get a 27.5% VAT for purchases.
The big advantage is that it’s not a hidden tax. You see it every time you shop. And you can ask yourself every time you shop “Am I getting 27.5% value added from this tax?”. The answer for 99.5% of the people will be “NO!”.
Then you can mosey over to “How much tax do we really pay?” (http://nowandfutures.com/taxes.html) and find that the effective tax rate is 65% (remembering that you pay the employer share of payroll taxes) and ask yourself “Why does the government get a lot more of my paycheck than I do?” and “Can the economy recover if I don’t have any money to spend?”.
Government is getting bigger and bigger, your share of your take home pay is getting smaller and smaller, and you realize Obama was right about something… “WTF”.
I read somewhere, don’t know if this is true, that if the federal budget were to cut spending 1% per year for the next eight years it would be back in balance, that is to say revenues would equal expenses. 1%. Now ask yourself, if I were in terrible economic trouble, essentially bankrupt, and knew that cutting my spending 1% a year for the next years would solve the problem, would I do it? Could I do it? 1%. The answer is patently obvious, yes and yes. Our rulers don’t want to stop the party. Even if it kills us.
Unless you planned to have a kid or two every year for the next 8 years. Then it would be tough to limit yourself to 99% of current expenditures. The government plans to have lots of additional “kids”, er rather, bureaucrats, entitlement recipients and union workers.
Jump into the pond scum & breath. Socialists are not wanted in America; get out & leave. You have your choice of North Korea, Cuba, Venezuela, & Red China.
You’re a VAT tax queen. You’re not even 17, oh yeah.
Tell Kim Jong Un hello when you kiss his ass.
I always suspect that all third party talk is just the Democrats trying to split our vote and make sure Dear Leader gets reelected. They really don’t want third way consensus driven politics, to them consensus is the GOP shutting up and going along with the great march forward into the glorious Stalinist future they have planned.
Each time I see a college prof run for public office, I laugh. I have yet to see a college prof do well in an election. Many, if not most, get their liberal heads handed to them.
They [the Purple Plans] have also been in the making long before he threw his hat into the 2012 ring, involving “decades” of thought, number-crunching, and discussions with other economists, he added.”
Anytime two or more economists agree, especially after ‘decades of thought’, you’d better run for your life!
If you laid all the world’s economists end to end they still couldn’t reach a conclusion.
Old joke.
A Mathematician, a CPA, and an economist interview for a job for which the only question is, “What is 2+2″? The mathematician answers 4, absolutely. The CPA answers 4, but admits there could be a a penny, give or take, of rounding error. The economist closes the blinds and leans over the desk, glancing over his shoulder before whispering in the interviewer’s ear, “What would you like it to be?”
And that’s why politicians hate mathematicians, are ambivalent about CPAs, but absolutely love economists.
Nobody ever got on a politician’s bad side by telling him that reality was whatever he conceived it to be. After all, most politicians are lawyers; the only profession on Earth where lying is considered a necessary professional skill.
clear ether
eon
I don’t know how long this laid around or timing or purpose, “Americans Elect” already has a candidate and VP as well, over a week ago. So why is this prtrayed as an interested nominee, in spite of his adsurd ideas. Somebody trying to get printed, quoted, is this how they make a check??
“The country’s essentially bankrupt at this point,” he said. “The most important thing to the public is their kids.”
Well the rest of his platform may be moonshine but it’s nice to see someone publicly expressing this view. The GOP has given up on trying to call our attention to impending fiscal collapse (they seem to believe that it’s in bad taste) and the Democrats tell us that things will be just dandy if we guillotine the “1%” (excluding approved celebrities of course.)
We are rushing toward fiscal Armageddon and the Republicans are focused on whether the place setting for our impending last supper have the salad fork in the right place while the Democrats are fine with it as long as someone else gets blamed.
He’s spouting just enough economic things to entice the normal Repub. and Indy voters to fall for the ploy. He’s an updated Ross Perot. For the Dems motto, is: by any means necessary. So a vote for any third party, might as well be a vote for Obama. The real reason for this party is to syphon enough voters to enable Obama to get elected. Et tu Soros?
I could go along with a national 18% sales tax as long as it was part of a Constitutional Amendment with the rate set in the amendment, and substituting it for all other Federal taxes,(Meaning we outlaw income, corporate, excise, and inheritance taxes in the Constitution.), was the same for every product and could not be hidden in the cost of the product. That would get rid of most of the government’s interference in the market, and the need for a good chunk of their employees, and obviate the rational for the A & T parts of the BATF. Gun licenses could be administered by the States removing the need for the F part. The FBI is perfectly capable of dealing with interstate and international gun running.
Close down the Departments of Energy, EPA, Education, Housing & Urban Development, and Homeland Security and we’d be well on the way to balancing the books.
I think this would free up the economy and return us to prosperity.
Your first sentence is absolutely correct because otherwise we’d have the European’s dumb model of both steeply progressive income taxes and VAT. Also a general sales tax, NO exemptions, e.g Granny’s heating oil shouldn’t taxed or she’ll freeze to death!
PS: Third parties are dumb: Ross Perot cost Bush I reelection and Ralph Nader kept the awful Gore out (hooray!) Any 3rd party that takes votes from the GOP guarantees OBambi wins – even if some come from him.
I often wonder if we had ended up with President Gore for a term we might have vomitted out this socialist poison 8 years ago. Instead we ended with a dim bulb compassionate conservative (oxymoron) president who paved the way for Obama’s fascist destruction of our country, economy and constitution. I don’t think Gore would have come close to causing this much destruction, although he might have wanted to. Even so America would already be long over the current stylish fascination with Euro-socialism even as we witness Europe taking their morning after pills now.
George H.W. Bush cost George H.W. Bush the election. Perot just gave voters something to do besides sit at home. And what was the result of Perot that you’re not seeing… the Republican takeover of the House for the first time in 40 years.
Granny’s heating oil is taxed now. In addition to fuel tax, corporate income taxes are paid by every company that handles the oil from the well to her tank, income taxes on all the employees, and everything they buy to do business has a fair amount of tax built into the price. The price of heating oil is about half tax to begin with.
We can always have relief for the actual poor. While it needs reform, I doubt we will ever get rid of it 100%, and in a robust economy, private charity gets more donations. There are few starving, freezing people in the US now other than the ones in Democrat campaign speeches. The richest person I know is my mother in law who is in her 90s, and most older people in the US are not poor, unless they were poor all their lives.
And realize, there would be a sales tax to pay, but your check would be larger by the amount of Federal Income Tax you currently pay. And everyone could dodge taxes by investing and saving for the future.
And I agree 100% that without outlawing personal and corporate income and inheritance tax and excise tax, a sales tax is a non-starter.
Of course fuel is highly taxed – my only point is that the broader the base, the lower the tax rate. Cheers
“…that have been endorsed by many prominent people…” is not a high recommendation for his “Purple Plan”; indeed, it is a strike against it, for it is all of those ‘prominent people’ whose machinations, chicanery and lies have produced our present state of economic doldrums and political impotence.
Well, I agreed that all the way up to America is broke.
The administrative costs of this man’s proposals alone would be a bureaucratic nightmare and a big spending politician’s dream. More gibberish, more hiding and stealing, more bad ideas for the sake of sounding brilliant.
There’s a false premise to everyone of these arguments, some of the premise tacit. That is, the size of our federal government is optimal, and all we have to do is to figure out how to fund it. Baloney – start cutting until our goal of 1/2 the size is reached.
The only way to bring fiscal sanity to the federal government is to start slicing. How about we eliminate large parts of HUD, Dept. of Transportation, Dept. of Energy, Homeland Security, and all of the Dept. of Education just for starters? And eliminate earmarks? Every billion now counts.
How about we get rid of every loophole, every subsidy including ethanol and any other alternative energy pipe dream than isn’t willing to fund itself with its own dime for research, and charge every American company an 18% corporate tax rate period? How about we can the idea of a carbon tax because even if AGW were true (and it’s almost assuredly B.S.), China and India, over a 1/3 of the world’s population, will give us the collective finger while they burn the smokestacks and crank the AC while we are stupid enough to add to the coffer and penalize ourselves?
How about we begin a phase out of mortgage deductions over a 15 year period so people aren’t immediately screwed who just bought a home, giving people time to adjust?
How about we have a third party company, completely removed from the auspices of federal gov’t, audit the entire Washington bureaucratic mess, and find out the real redundancies that Tom Coburn hinted could amount to $250 billion waste a year, then force our government to implement those ideas?
How about we start a new Man on the Moon proposal by the end of this decade, focusing on coming as close as we can come to real energy independence within the logistics of the North American continent, with specifics focused on nuclear, NGL, offshore drilling, pipelines, new and improved refineries, an elimination of reformulated gasolines, and a push for real conservation?
And finally, and this is most important. Every rule, every regulation, every law passed by Congress is first applicable to Congress. They are going to suffer with us. That includes health care, Medicare, SS. And speaking of SS, at least privatize a portion of it for anybody younger than 50, with the responsibility to manage it falling to the individual. SS is a Ponzi scheme.
Though our problems large and the pain real, I could list a hundred more ideas that would cut government without the sky falling, and only require large enough balls to implement without worrying about pandering and reelection strategy.
Now all he needs to do is find a congress that will vote for it.
He needs to read up on Thomas Jefferson.
If you itemize (see if your iteimzed deductions on 1040, Schedule A exceed your standard deduction, which is $10,700 for married filing joint, $7850 for head of household, $5350 for single or married filing separate in ’07), you may deduct EITHER state and local income taxes OR your state and local general sales taxes. You cannot deduct both. You make your election on line 5 of Schedule A by checking box a for income taxes or box b for general sales taxes. The option to claim sales taxes instead of income taxes will not be allowed following 2007 unless Congress extends the law permitting this option.