We need the OWS movement to grow immensely in order to effect genuine reform that will fix our democracy. And to get the OWS movement to grow immensely, we need to be able to inspire people.
One way to inspire is through a vision of what the world would be like if OWS fully succeeds. It needs to be a vision that nearly everyone would be thrilled with and that seems realistic at the same time.
In this diary, I have created a brief example of an inspiring vision, which could realistically be the outcome of a successful movement to reform our democracy.
This inspiring vision consists of two parts:
1) reforms that would create a representative government reflecting the people's will
2) positive change that would occur as a result of a representative government
Reforms of Our Democratic System of Governance
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Here is one example of a reform that would help:
* Give each taxpayer a $50 tax rebate, with which they would use to donate to the campaign of their choice.
To explain this idea, the following are some quotes from a recent interview on the Charlie Rose show:
Lawrence Lessig interviewed by Charlie Rose on Nov 14, 2011
Lawrence Lessig: I describe a version in my book [Republic, Lost], which is a little bit different from the ones that have been proposed. It basically says, "look, all the voters pay at least $50 in taxes. So, let's take the first $50 you pay and rebate it to you in the form of a democracy voucher. And then you can use that voucher to give to any Congressional candidate, as long as that candidate agrees to fund his or her campaign with those vouchers only and contributions of up to $100 from any citizen. The $50 voter is 6 billion dollars in any election cycle. That's 2.5 times what was spent in the 2010 election cycle. So, it's real money. And if it were a system where the majority or 70% of candidates opted into that way of funding their elections, then nobody could believe that when Congress did something stupid that it was because of the money. It may have been because there were too many Democrats or too many Republicans, whatever, but it wouldn't have been the money, because we removed this fundamental source of cynicism, because Congress would be raising money in chunks that nobody would believe are biasing them.
Charlie Rose: What chance does this have?
Lawrence Lessig: Under this Congress, exactly zero. I looked it up on Google. It's exactly zero. So, what we need is a movement outside of Congress to force the institution into adopting the kind of funding system that we can trust again. Because they got elected under the old system, they don't want to change it. Many of them see their life under the old system as a stepping stone to becoming lobbyists, as a kind of farm league for K Street, as Jim Cooper from Tennessee describes it. And so they don't want to change the system where lobbyists won't be as valuable.
Charlie Rose: So, whatever happened to McCain-Feingold?
Lawrence Lessig: So, it's effectively dead. There are some parts that still survive. But its strategy was different. Its strategy was to say "Oh, there are some forms of money we don't like. Let's try to dampen it down." And that's been the strategy of reform for the past 30 years. And my view is that's just never going to be enough. You're never going to succeed by silencing some kinds of speech in the system. They will always find a way to get their influence back in. Instead, we have to find a solution to add more speech into the system, more money into the system, but money that isn't distorted in the way that we think big money is.
Charlie Rose: So you're "democracy voucher"?
Lawrence Lessig: The "democracy voucher" is one way.
These "$50 democracy vouchers" would help to fix our democracy, because ...
1) It amounts to more than 6 billion dollars worth of small-donor funding, which would dwarf the 2 billion dollars worth of big-donor funding that was spent in the 2010 election cycle. This is explained by Lawrence Lessig in the above quotes.
2) There are diminishing returns to campaign financing. In other words, if several candidates are well-financed, then the candidate with the most money will not have that much of an edge. So, this means, that even though the wealthiest 1% may be willing to overwhelm the 6 billion dollars in public financing, it is not going to provide much extra help for their favored candidates. This is explained in the quotes that follow:
Does Money Buy Elections? The Impact of Spending on U.S. Congressional Campaigns - www.CampaignFreedom.org
... once a million has been spent, in all but the costliest of districts, additional spending by incumbents and challengers alike means almost nothing at all.
... So long as otherwise qualified candidates obtain sufficient resources for the voters to learn who they are, additional spending by themselves or their opponents does not measurably impact the chances of their success.
... Even so, it is the rare exception to the rule when non-incumbent candidates obtain the level of resources needed to mount a credible campaign. The findings have important implications for campaign finance reform.
... the resources of qualified candidates should be adequate—but they need not
be equal—to provide a vigorous campaign that is not defined by money. Although parity in candidate funding is a common objective in public financing reforms, there is little evidence that candidates who outspend a competitively-funded opponent are more likely to win.
Bloomberg Meets the Law of Diminishing Returns.
As for diminishing returns, it's easy to see why more money doesn't matter -- there's only so much you can do. Once people have seen your TV ads or heard your radio ads a dozen times, another two dozen are only going to annoy them.
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Positive Change that Would Happen After Democratic Reforms
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In the first part of the diary, I described a vision of a reform that would make the government dramatically more responsive to the people's interests and values. In the second half of the diary, I am going to describe one example of the good that government could do, once we have a government that is much more responsive to the people.
Here is one example of a positive change:
* Eliminate tax breaks that stimulate the offshoring of jobs.
This is an idea that I'm sure that 90% of the American people would support. Also, it would be very easy to create legislation that would eliminate these tax breaks. But under our current system, this legislation will never pass, because big business likes these tax breaks and Congress works for big business.
Here is an interview with former Democratic Senator Byron Dorgon, who unsuccessfully tried more than 3 times to remove these tax breaks:
Lou Dobbs transcript - Mar 17, 2005
PILGRIM: American companies that export manufacturing jobs to cheap overseas labor markets are actually rewarded with tax breaks under our laws.
Well, Senator Byron Dorgan of North Dakota introduced an amendment today that would repeal those tax breaks. The Senate defeated that amendment, 59 to 40. And Senator Byron Dorgan joins me tonight from Capitol Hill. Thanks for being here, sir.
....
DORGAN: Well, I'll have another shot at this. But it's really shocking when you think about it. We have this really bizarre tax code that says if you shut your American plant, fire your workers, move the jobs overseas, manufacturing the product and ship it back to the United States, we'll give you a tax cut for doing it. I mean, that's unbelievable to me. And it's also unbelievable that 59 members of the United States Senate think that should continue.
Also, this is not a divisive issue, because this positive change (i.e., removing tax breaks for overseas profits) is supported by people of all political persuasions.
For example, here are some quotes from a libertarian blog:
Mish Mailbag: IBM Abandons U.S. Workers - Apr 13, 2010
US Tax policy is another reason for outsourcing, and that can easily be addressed, at least in theory.
US corporate tax policy allows deferment of profits overseas, but profits in the US have a tax rate of 35%. This policy literally begs corporations to move profits and jobs, overseas.
... it would be far better from a jobs standpoint to defer taxes in the US than overseas.
Mish's 8-Point Alternative Plan - Jul 5, 2011
Every few years one or both parties proposes a corporate tax holiday to repatriate profits held by corporations overseas. Such actions must stop. All repatriation holidays do is encourage more outsourcing of jobs and capital, while corporations bide their time, waiting for the next tax holiday.
US companies that only do business inside the US are at a huge disadvantage to large corporations who can shift profits overseas.
These articles state that the tax law incentivizes the offshoring of jobs.
Could Tax Reform Boost Business Investment and Job Creation? - Nov 17, 2011
Our current deferral system provides tax incentives for overseas investments. In fact, it encourages U.S. companies to make job-creating investments offshore even if similar investments in the United States (absent tax considerations) would be more profitable.
Does tax code send U.S. jobs offshore? - Mar 21, 2008
"The U.S. tax system does provide an incentive to locate production offshore," says Martin Sullivan, a contributing editor to Tax Notes, a non-profit publication that tracks tax issues.
The following articles describe how this tax law is used to not only facilitate offshoring, but also to eliminate taxes for large companies.
Obama Seeks End of Corporate Tax Break to Raise $190 Billion - May 4, 2009
In 2004, U.S.-based multinational corporations paid about $16 billion in U.S. taxes while earning about $700 billion offshore, an effective tax rate of about 2.3 percent, according to the administration statement.
... The rules were originally designed to reduce paperwork for companies and the IRS by allowing companies to classify entities within their corporate structure in the most tax-efficient manner without inviting a tax challenge.
... Clinton administration officials realized they also had made it easy for multinationals to create entities whose only purpose was to shift profits into low-tax countries and out of reach of the tax authorities ...
... The nonpartisan congressional Joint Committee on Taxation recommended in 2005 that the rules be repealed.
What The Top U.S. Companies Pay In Taxes - Apr 1, 2010
The most egregious example is General Electric (GE). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.
Amazingly, this tax law has been around since the 1960s, despite many calls for reform over the years.
Does tax code send U.S. jobs offshore? - Mar 21, 2008
The deferral clause has been in the tax code for more than half a century and has outlasted numerous reform efforts. In April 1961, even as U.S.-backed rebels were dying at Cuba's Bay of Pigs, President Kennedy asked Congress to rewrite tax provisions that "consistently favor United States private investment abroad compared with investment in our own economy."
By accident, in 1996, the Treasury Department created a new regulation that made it easy for multinational companies to exploit the tax law.
Corporations Couldn’t Wait to ‘Check the Box’ on Huge Tax Break - Sep 26, 2011
The original idea was innocent enough—to cut red tape by making it easier for companies to decide how to categorize their subsidiaries.
In the mid-1990s, U.S. companies were creating a growing number of domestic entities. The new rule said that, by simply checking a box on IRS Form 8832, businesses could declare them as corporations or partnerships.
But within days of its announcement in 1996, tax lawyers were on the phone saying the Treasury Department had overlooked the international ramifications. Inadvertently, the government had provided a way for companies to move profits from subsidiaries in high-tax countries ... to ... other jurisdictions with lower or no taxes on certain kinds of income.
The tax laws and regulations still exists today, as a result of strong business lobbying.
Corporations Couldn’t Wait to ‘Check the Box’ on Huge Tax Break - Sep 26, 2011
By early 1998, the U.S. said check-the-box was being used to “circumvent” anti-abuse rules.
Treasury proposed new regulations—and corporate America erupted.
General Electric, PepsiCo, Morgan Stanley, Merrill Lynch, Monsanto and other major companies urged Congress to resist the change.
... It thrives thanks to determined business support, including a campaign two years ago that forced the Obama administration to retreat from altering it and tax professionals worldwide who exploit its benefits.
... “They knew the business community was going to push back. What they were really surprised by was how vehemently the business community reacted to it,” said Catherine Schultz, vice president of tax policy for the National Foreign Trade Council.
In summary, the tax laws/regulations exist, because ...
1) It helps big business to finance their initiatives to offshore American jobs to cheap labor markets with low environmental protections.
2) It helps big business to avoid paying taxes.
Yet, it is against the interests of Americans, because ...
1) It increases unemployment.
2) It shifts more of the tax burden onto the people and small businesses.
It is important to realize that these tax laws/regulations would be repealed in one day, if we had a functioning democracy.
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Summary
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We are suffering from a catch-22, which is that we need an energetic, widespread movement to restore our democracy, but in order to get a large % of the people involved in such a movement, people need to see the benefits of having a functioning democracy. Yet, most Americans alive today have never experienced such a democracy nor have they seen all the blessings that come with.
In addition, we have seen many failed attempts at democratic reforms, which leads many people to doubt that reform can be accomplished. Little do these people know that these reforms were failures because the incumbents in Congress have no real incentive to reform the system in a way that would reduce the money in politics and increase the competitiveness of Congressional races.
Thus, we need to address this failure of the national imagination by creating a palpable, inspiring vision of genuine democracy and effective government.
For examples of elements that could be part of an inspiring vision, I have described the $50 election voucher and the repeal of corporate tax loopholes that encourage the offshoring of jobs.
We need to fill in this vision with more examples, so that people can see that ...
1) Government will represent the 99%, when effective reforms are implemented.
2) Government will solve national problems, when it represents the 99%.
The first national problem we need to solve is our lack of democracy, because we cannot solve any of our other problems until we fix this first problem. And to fix this problem, we need to grow an outside-the-beltway movement (e.g., OWS) to be of sufficient size and passion to exert tremendous pressure on Congress to make the required changes to restore democracy. And to grow this movement, we need to inspire people by developing and communicating a vision of government that is responsive to the people and effective at bettering our civilization.
With all of this in mind, let us get to work at developing and communicating a vision of good government. Please share any ideas you have or that you have learned about from others, which would help with this project. And while we engage in this project to inspire, we can inspire ourselves by recalling that all great success begins with dreaming a great dream.
(Also, see my previous diary "OWS: what next?" for an inspiring map for the OWS movement, which will help us to reach the inspiring destination described by this diary.)