print this pageGrowing up in America in the 1950s and 1960s, I was blessed with all the opportunities that I could handle to lead the life of my choice. Looking back, I have worked hard, reaped the rewards of living in the U.S., and earned the life of my choosing. I want today’s children and future generations to receive the same golden opportunities that helped me attain the knowledge and skills to succeed in college, in the military, in law school, and in a career that has lasted more than 50 years.
Capitalism has been good to me. I have enjoyed a successful legal career as an attorney with the Internal Revenue Service, then with the U.S. Securities and Exchange Commission, and then as a public finance attorney in private practice. However, my firsthand experience has also revealed how brutal and ruthless capitalism can be. To be ethical, it must be practiced with integrity, and without lying and manipulation.
I still believe that capitalism is the best hope for humanity, but it is high maintenance. Only pure, uncorrupted capitalism assures opportunity for those who work hard and play by the rules. Without persistent vigilance to protect against ever-present creeping corruption, like antitrust violations and markets perverted by fraud, capitalism degenerates into economic thuggery in which the honest and diligent are devoured by the dishonest and ruthless.
In the last forty years, the world has spun in a way that is incomprehensible to many. Rising education costs, slow growth in both the global and domestic economies, the public’s loathing of taxes, and other factors make it far more difficult for young people to pay for the higher education they need in order to make it in a competitive world. Globalization and technology, two inexorable and irreversible forces, pose grave threats to the American Dream. Globalization represents free and full international commerce among the world’s nations. Technological innovation represents the replacement of human effort and skill in the delivery of goods and services with intellect, in the form of software, computers, and robots. In this world, capital knows no national home, and only workers with scarce and superior skills will command premium wages.
In the world that is emerging, capital seeks its highest return wherever in the world it may be found. American workers must compete with workers internationally for opportunities, and everyone will also have to compete for whatever wages capital is willing to pay. For workers with competitive skills, the world will never have been better, but for those workers with less than superior skills, the future looks bleak.
Unless the U.S. economy grows and all Americans who are willing to work have hope, the American Dream will fade, and with it, so will its status as a superpower. If this country hopes to sustain its greatness, every hard-working person of merit must be able to access the education needed to be upwardly mobile. Our country cannot afford to waste talent. In the interest of keeping America’s economy strong, all those with talent, especially those who also have ambition and drive, must be provided with the resources necessary to fully develop their potential. Lack of money should not stand in the way of any American of ability getting the education they need to become all they can become.
Opportunity does not imply equal opportunity for all, but it does mean adequate opportunity for all who are willing to work. Some will have higher hills to scale than others. There will always be those who struggle to work their way through local community colleges while others get into universities on legacy admissions without a financial care in the world. However, preparing as many young people as possible to enter the middle class will ensure that America’s economic engine does not run out of gas, and everyone will be the better for it.
Two generations ago, I could make it mostly on my own, with only a bit of government help. In those days, hard work, ordinary skill, and a little luck were still a ticket to the American Dream. From the end of World War II into the 1980s, most Americans could support their families by working as a retail salesperson, a bank teller, a barber or hairdresser, a car salesman, a gas station attendant, a milkman, an auto mechanic, an assembly line worker, a carpenter, a plumber, an electrician, a policeman, a fireman, a bus driver, a grocery store checkout clerk, or a secretary.
Today, many of these jobs that used to sustain us are gone, and the jobs that are replacing them are very different. Most middle and low-income Americans will need a boost if they want to pursue the education necessary to compete in our 21st-century job market. And for America to compete in a global economy, where neither capital nor skilled labor respects national boundaries, the lack of highly skilled labor could doom us to second-rate status or worse. To achieve the goal of creating a workforce second to none, one that will help America stay competitive in the global economy, calls for plunging into the political world of taxing and spending, a world that few voters understand.
Embracing wide-ranging tax reform to help pay for the education necessary to revitalize the middle class—a cornerstone of social and political stability, a wellspring of innovation, and our engine for economic growth—is the task ahead. Where the middle class goes, so goes America.
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I wrote this book because we need a new narrative about taxes. The dialogue in the media is a confusing morass of sound bites and debate, but most citizens still lack a foundational understanding of our tax system. Before voters can make informed decisions regarding tax policy, they need to understand how the system works as well as the barriers to better tax policy. In this tax-policy primer, I also include some proposals that I believe will help Americans remain competitive.
My personal experience with taxes comes not from the top down as an academic, but from the inside out as a deal-maker. In more than 30 years of law practice, I did hundreds of tax-driven deals that exploited an endless number of tax loopholes. Sweet deals were made sweeter and marginal deals were made possible by tax preferences of all kinds. Experience has taught me that the deals I did benefited the consultants and the businesses that engineered them more than the taxpayers who paid for the benefits. None of the benefits that arose from these deals were worth the cost to the taxpayers. As my penance for 35 years of doing tax-driven deals, I have written this book to point out a better way.
No one enjoys being taxed. Few besides the billionaire investor Warren Buffett will admit to it. But as things stand, only the very few are winning in the tax game; the overwhelming majority of Americans are losing. I would like to see more of us do better, and this book explains how. With the benefit of hindsight, I believe that the clear majority (as many as 98% of all Americans) would be better off if we ended the tax gamesmanship that goes on every year in our political system.
It may be hard to believe, especially to those who hate taxes like the plague, but over the decades, many conservative lawmakers and tax policy experts have proposed tax reform proposals similar to the ones outlined in this book. For the most part, these earlier reform proposals fell short because of political timidity, partisan bickering, and private greed. For most of my life, I have agreed and disagreed with Republican and Democratic lawmakers and presidents alike. So, I write this not as a partisan political advocate, but as a partisan American.
The “Ameri-Share Tax Plan” that I offer envisions an economy in which (1) those with superior skills can realize their full potential, (2) those with less-than-superior skills (but who are willing to work) will have a decent standard of living and their children will have a fair shot at getting the post-secondary education they need to realize their potential, (3) the American economy will grow as rapidly as possible, (4) the tax burden will be distributed based on the ability-to-pay principle, (5) the tax laws will be much, much simpler, (6) taxpayers earning the same income will pay the same taxes, and (7) America will pay down its national debt to manageable levels. Each element of my Ameri-Share Tax Plan is borne of a one-time conservative proposal. Now, these same proposals are presented in a single coherent plan at the end of this book.
I have done well in my life. I am retired and in my eighth decade and, depending on market fluctuations, I am in the top one, two, or three percent in terms of income and wealth. If America has been that good to me, then I see it as my duty to help others get a shot at success also. America cannot remain a great nation unless we create and educate a superior workforce, expand the middle class, and reduce our national debt. The only way for our country to stay number one is to invest in itself. This book will show readers how to safeguard the American Dream and equip them with the knowledge to help drive the public investment necessary for sustaining our country’s standing well into the future.