Dilbert solves our budget woes

Scott Adams, creator of Dilbert comic strip had an op-ed in the Wall Street Journal which gave some fantasy scenarios to solve the budget problems. I have one of my own, which is very similar to Adams’ ‘shared pain’. It’s called, cut the budget, raise taxes slightly, and make taxes flat. People don’t like the idea of a flat tax but wealthy people are able to hire tax accountants and lawyers to navigate their way through the tax code which means as a percentage of income, they pay far less than their nominal rate would imply. People who pay no taxes have no ‘ownership’ in paying taxes and don’t have any incentive in voting in ways to make the system more efficient. Take for example, Ford Motor. The Ford family owns approximately 3.5% of Ford stock and controls 40% of its voting power. They sit on the board. At its nadir, their ownership was about $170 million dollars. Today, it’s at least 10 times that amount, even with the stock falling back. If the people who sat on the board didn’t have their $$$ on the line like they did, Ford easily could have gone bankrupt like GM or Chrysler.

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